4% mortgage program launched

Marylanders must buy in `transition' areas

October 24, 2001|By Robert Nusgart | Robert Nusgart,SUN STAFF

The state announced yesterday a $40 million program to offer qualifying families 4 percent mortgages if they purchase homes in neighborhoods that have applied to the Community Legacy Program.

Gov. Parris N. Glendening outlined the initiative - called "40 at 4" - in addition to announcing that the Live Near Your Work program, which provides $3,000 toward down payment and settlement costs, is being expanded to include state employees.

The governor also announced the creation of a task force to develop Smart Growth strategies to aid working families in purchasing homes.

The Community Legacy Program, which was passed by the General Assembly last year, is geared toward helping neighborhoods and suburban communities that "are in transition," according to Harry Sewell, assistant secretary for the Department of Housing and Community Development.

"We want to help communities that are struggling before they get to the bottom of the barrel," Sewell said.

Sewell reported that 91 communities statewide have applied to be included in the program, and all will be eligible for mortgage money, which will be funded through mortgage revenue bonds and not through the general fund. Sewell said he expects the program to assist approximately 400 families.

The program, aimed at low- and moderate-income families, carries the same income and home-purchase price limits as the Maryland Mortgage Program.

To be eligible in Baltimore, for example, a family of three or more can have a household income of no more than $97,160 and must purchase an existing home that doesn't exceed $171,886.

Currently, the Maryland Mortgage Program, which originates approximately $240 million a year in loans, offers a below-market, 30-year, fixed-rate mortgage at 5.75 percent.

At 4 percent, the principal and interest on a $160,000 loan total $763 a month, $170 less than at 5.75 percent.

"It will help those communities and keep home sales strong in the state," Sewell said.

The Live Near Your Work program combines $1,000 each from the state, local jurisdiction and the employer to assist buyers with the expenses of purchasing a home.

Tracy Gosson, director of the Live Baltimore Marketing Center, which promotes city homeownership, said the state is committed to helping 95 of its employees purchase in designated areas of the city by contributing $190,000.

"We are very excited about Baltimore because there are a lot of state employees who have been asking us about the program," Gosson said.

"We have over 65 companies participating," she said, "and we have a reach of over 65,000 employees, not including the state, with a corporate financial commitment of $440,000. Throw another 95 on top of that and that's awesome."

Among the requirements for eligibility, state employees must be permanent full time; occupy the property as their primary residence; and the property being purchased must be within a five-mile radius of the employee's place of work.

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