Seventy-five of the 82 apartments in Julius Hobson Plaza, a condominium complex at First Street and New York Avenue NW earmarked for moderate-income families, have been sold for an average of $31,500 and a dozen owners may move in shortly, the developer reports.
A formal dedication ceremony will be held at noon Aug. 6, with addresses by D.C. Mayor Marion Barry and Tina Hobson, director of consumer affairs at the U.S. Department of Energy and widow of the late City Council member Julius Hobson Sr.
The four vacant and dilapidated buildings were given by the District to the D.C. Housing Industry Corp., a non-profit organization of builders, lenders and real estate firms.
Five Washington banks loaned the construction money, at a rate just above that given prime customers, and nine local S&Ls committed permanent financing at 14 percent, which was then below the prevailing rate. At closings this week the mortgages were made at 12 percent.
In addition, as renovating costs escalated, the District, in keeping with its pledge to bring the units to market at an average price of $31,500, added a subsidy of $8,500 per unit. The city government will take back non-interest-bearing second trusts to ovr these liens, which do not become due unitl the first owners sell their units.
The Federal Home Loan Mortgage Corp. is the secondary lender for the project, and is waiving its normal 5 percent down payment requirement for all the units sold subject to Home Purchase Assistance Program loans -- in this case about 30 of 82.
A mortgage corporation spokesman said there was some concern within the agency over the precedent-setting nature of the loan terms -- and he said the concern was valid.
"None of our (lending) requirements should be abandoned gratuitously," he said, "but in the case of Julius Hobson, the cash requirement is replaced by the substantial contribution of the city, and more importantly, the availability of counseling. If this project proves a viable and prudent undertaking, a decision to allow purchases of similar loans in the future could be conditional on the presence of (these) factors."
Alvin Nichols, executive of the D.C. Housing Industry Corp., said buyers will attend a series of counseling sessions on budgeting and financial matters, the condominium ownership concept and orientation about the units.