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Need cash to buy a house? State and local programs offer incentives

Even with home prices in the dumps, saving to buy a home may be out of reach for many. But if you work at Johns Hopkins and find a rowhouse in a downtrodden neighborhood nearby, you could qualify for as much as $29,500 to help with the down payment and closing costs.

That's money available through city, state and employer programs designed to boost home ownership. And if you don't quite fit that description, you still may be eligible for thousands of dollars to help buy a principal residence.

Such financial assistance could take on added significance since the end of the federal homebuyer tax credit, which was worth thousands of dollars and provided such a huge stimulus that it briefly turned around the sluggish housing market.

Of course, strings are attached with the various financial assistance programs. You generally have to go through homeownership counseling. You might have to buy a house in select neighborhoods or contribute a certain amount of your own money toward the purchase up front. And the assistance often comes in the form of a loan, although in many cases it's forgiven after several years.

If you meet the criteria for one program, you may qualify for another, so the incentives add up.

Irene Irby, a security nursing attendant for Clifton T. Perkins Hospital Center, says she might still be renting if not for such programs. She purchased a four-bedroom rancher with a pool in Randallstown in July. Her employer contributed $2,500 toward closing costs and down payment. The state also matched that and provided a $3,500 no-interest loan.

"It's a lot of help," says the 56-year-old. "At the closing table, I didn't have to put up thousands and thousands of dollars."

In fact, her out-of-pocket costs at closing totaled about $400. She was then able to use her other savings to replace windows at the new house and buy furniture.

While the federal homebuyer credit paid cash only after a house was purchased and the buyer filed a tax return, these other programs are designed to help with steep closing costs and down payments that can prevent people from becoming homeowners.

"It's the biggest barrier we found. Some people have stable employment, even today, but they don't have a lot of money saved," says Tonna Phelps, director of single-family housing for the Maryland Department of Housing and Community Development.

Programs generally require that you first get a certificate for completing homeownership counseling before you can apply. Baltimore residents can find a list online of authorized counselors at or by calling city officials at 410-396-3124.

The programs listed here are either from the state or for Baltimore City residents. Homebuyers in other areas should check their local governments or employers for similar incentives. Howard and Baltimore counties, for example, offer assistance with settlement costs and down payments for residents who meet certain income requirements. The funding for these county programs has run out, but more is expected by late fall.

Among the programs:

Buy Into Baltimore You can receive $4,000 for buying a house on Baltimore's east or west side. The money is a five-year forgivable loan, so that each year that you live in the house, $800 of the principal is wiped out.

One catch: You will have to repay any remaining loan balance if you sell the house before the five years are up, or if you refinance to take money out of the house to pay off debt, buy a car or for other personal uses, says Michael Guye, director of the city's Office of Home Ownership. You won't have to repay the loan if you refinance to get a lower interest rate or to tap the equity to make home repairs, he says.

This program comes with some unique obligations before you buy. The city and Live Baltimore, a nonprofit that promotes city living, conduct a trolley tour twice a year of 16 homes in target areas. You don't have to buy one of those houses, but you must stop by at least four and get a ticket validated at each to prove you made the visits. This month, the trolley rumbled through East Baltimore. In May, it heads to the west side.

Prospective buyers must present a validated ticket, counseling certificate and a contract on a house to the city's home ownership office within 90 days of the tour to qualify for the money, Guye says. And even then, only the first 50 applicants get the $4,000 for closing costs.

Baltimore City Employee Homeownership Program Employees who have worked full time for at least six months for the city are entitled to $3,000 toward buying a house in town. This, too, is a five-year loan that's forgiven in $600 increments each year you occupy the house. Until the loan balance is zero, if you quit your job, sell or refinance to pull money out of the house for purposes other than improving the house, you will have to repay the balance, Guye says.

City workers may qualify for an extra $750 if their new home is in one of 35 so-called Healthy Neighborhoods, where home ownership is strong and the city is trying to keep it that way, says Anna Custer, executive director of Live Baltimore. These include Mondawmin, Patterson Park, Lauraville, Reservoir Hill and Mount Vernon.

Live Near Your Work Dozens of employers in Baltimore offer cash incentives worth at least $1,000 to employees who buy a primary residence near their workplace. These are often grants that don't have to be repaid. On top of that, Baltimore City kicks in a $1,000 grant.

You must contribute at least $1,000 toward the purchase. And your employer may have additional restrictions. Some, for instance, require the money to be repaid if you move within a certain time; others don't.

Large and small employers participate, including Under Armour, the Wine Source, U.S. Lacrosse and Loyola University Maryland. Check with your human resources department to see if your employer is one of them.

No employer, though, is as generous as Johns Hopkins. Full-time workers can receive $1,500, $5,000, $9,000 or $16,000, depending on where the house is located in the city. Top-dollar awards go to workers buying in transitional neighborhoods, such as Barclay, Harwood, Middle East and Greenmount West. Generally, employees won't have to repay this money if they stay in the house for five years — even if they leave Hopkins in that time.

A Hopkins employee could get as much as $29,500 by taking advantage of the employer incentive and city match, plus the Buy Into Baltimore program and three state programs, Custer says.

Park Heights Renaissance Home Ownership Promotion Program Park Heights Renaissance Inc. offers a $3,000 five-year forgivable loan to help with closings costs for those buying a house in the Northwest Baltimore neighborhood.

Downpayment and Settlement Expense Loan Program Maryland offers a variety of small loan programs to get people into a home. The loans don't accrue interest, but you must repay them when you sell, refinance or transfer ownership.

Under this program, you can borrow $5,000. You must have a mortgage through the Maryland Mortgage Program, which offers low-rate, 30-year fixed loans through private lenders. A list of participating lenders can be found online at The mortgages are for first-time homebuyers and those buying a house in targeted areas, including Baltimore.

House Keys 4 Employees If your employer offers assistance with closing costs and the down payment, the state will match that up to $2,500, or up to $3,500 if the newly purchased home is within 10 miles of work.

Again, this is a no-interest loan that you would have to repay someday.

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