Capital-Gazette

Capital-Gazette
September 2, 2008

Nonprofit group shifts strategies to provide affordable housing

Homes for America putting choice in owners' hands

By RYAN JUSTIN FOX Staff Writer

The richer Annapolis becomes, the more middle-class home ownership in the city plummets, a local affordable-housing advocate said.

And now local government and nonprofit housing officials are trying to adapt with versatile housing-assistance strategies. Local nonprofit group Homes for America is shifting its resources to help moderate-income, working residents.

Homes for America, an Annapolis-based affordable-housing provider, is rolling out its new Homeownership Assistance Program that allows potential homebuyers the freedom to scan the local housing market for the home of their choosing instead of waiting for a local organization to rebuild a property in a specific location.

"This has always been about choice," said Trudy McFall, founder of Homes for America. "We thought it might be more helpful if we found the grants if they found the house."

Eligible applicants must earn between $43,000 and $66,400 or no more than 80 percent of the median income for the area. The program provides no-interest loans up to $40,000 per household to reduce the cost of the mortgage.

The city Community Development Department also kicks in money from its community development block grant revenue to help out with down payments. Qualified applicants can receive up to $5,000 from the city.

Potential applicants find a home appraised at less than $362,790, the maximum value allowed. Generally, program participants can use the money to purchase a home valued at about $200,000, Ms. McFall said.

Most affordable housing touted by housing advocates are limited to the development or homes mandated by the assistance program. With the Homeownership Assistance Program, the potential homeowner gets to decide the house and location of their choice, Ms. McFall said.

So far, interest in the program has been modest. Homes for America has only been able to help place one family into a home in Eastport. Close to two dozen more families have inquired about the program but, so far, Homes for America has not been able to assistant any other qualified applicant, Ms. McFall said.

Using their partnership with the city, advertisements were sent out to city employees in their paychecks several weeks ago, said Theresa Wellman, director of the city Community Development Department. But she said city employees are generally not in the market for a new home.

A study conducted by Citizens for a Better Annapolis, a local think tank also founded by Ms. McFall, found that there are less middle-class residents - those households with incomes between $50,000 and $100,000 - living in the city than nearly two decades ago. The study also showed a third of Annapolis residents spend more than 30 percent of their income on housing costs.

As a result, the study said the homeownership rate for Annapolis, at 52 percent, is lower than the rate in the county, 76 percent; state, 68 percent; and nation, 67 percent.

Part of the skepticism toward the program is born out of a perception that there are few affordable houses available in Annapolis, Ms. McFall said.

"There's a stereotype that there's not housing under $100,000 in Annapolis," Ms. McFall said.

Homes for America provides potential home buyers a packet of about 100 homes for sale in the city for under $250,000. She said the city's moderately priced dwelling-unit ordinance that mandates housing developers build affordable housing the same time it builds market-price units will help cash-strapped families in the future.

Almost half of the public housing communities in Annapolis are to be demolished over the next few years and renovated over the next few into privately owned units, which may also provide relief for some residents, Ms. McFall said.

Homes for America also allows recipients to combine other assistance or grants recipients might receive from other programs. Many other programs don't allow that, she said.