Prince George's increases down payment help for low income
Wednesday, January 20, 2010
The Prince George's County Council passed a bill Tuesday that will triple the amount of money low-income residents can receive to help them make down payments on vacant homes.
The funds come from more than $12 million received by the county through the federal Neighborhood Stabilization Program, part of a 2008 housing measure to battle the foreclosure crisis.
Under part of the program in Prince George's, first-time home buyers can receive up to $20,000 through a no-interest deferred-payment loan to help purchase a vacant foreclosed property in the county. If the buyer stays in the home for 10 years, the loan is forgiven. If he or she moves out before then, part of the money must be repaid.
The County Council voted Tuesday to raise the down payment cap to $60,000 for lower-income residents. Many can't afford to buy a house in Prince George's with $20,000 in assistance, said Rosalyn B. Clemens, who manages the county's stabilization program.
"People at this income level, without a deeper subsidy, just will not be able to afford to buy homes," Clemens told the council.
Under federal rules, the county must set aside about $1.9 million of program money for residents whose household income is at or below 50 percent of the area median. Clemens said that only 3 percent of that $1.9 million has been spent and that if it is not disbursed by a federal deadline in September, it will be reclaimed by the federal government.
Assisting residents outside the low-income group with down payments has not been a problem: Of about $5 million set aside for them, about 90 percent has been spent, Clemens said.
The council vote comes about a week after the U.S. Department of Housing and Urban Development sent letters to county officials saying that more than $2 million in affordable housing grants would be reclaimed because the county failed to meet a five-year spending deadline. Those funds came from the HOME Investment Partnerships Program.