Loan fund for builders viewed as way to hang on to moderate-income folks


A proposed $1 million revolving loan fund for affordable housing construction could be just what Baltimore County needs to keep moderate-income people from moving to neighboring counties where housing is cheaper, county officials say.

The money is part of a $2.5 million federal grant from the U.S. Department of Housing and Urban Development.

The county wants to use the money to set up a low-interest loan fund for builders.

The County Council will vote on the proposal Monday.

If the plan is approved, a builder could borrow money from the fund at an interest rate of perhaps 3 percent instead of the higher prevailing commercial rate.

One condition would be that the builder keep the sale prices of the homes low enough to make them affordable for moderate-income people. Money received from the sales would be plowed back into the fund to pay off the loan.

The county has set up similar loan funds in recent years, using smaller amounts of federal money provided by block grants.

Frank W. Welsh, director of the county's Department of Community Development, said the loan fund is vital to ensure that young working people can continue to buy homes and live in Baltimore County, instead of going to Harford or Carroll counties where land and housing are often cheaper.

The county is trying to keep moderate-income people such as secretaries, skilled laborers, police officers, firefighters and teachers from moving out.

Mr. Welsh also is actively supporting a $600,000 housing bond issue on the county's Nov. 3 ballot.

The bond measure encourages construction of affordable homes for entry-level workers and for elderly people living on fixed incomes.

In addition to deciding on the loan fund, the council will vote on whether to use $600,000 of the federal grant for a rental-assistance program.

The program would help low-income people with financial problems by paying their rent for up to 24 months.

The remaining $863,000 of the federal grant will be used in the county's rental rehabilitation program, which lends landlords money to fix older apartments in exchange for guarantees that low-income tenants will not be forced out by higher rents after the work is completed. The council also will vote on this plan.

To qualify for houses built through the proposed loan program, potential home buyers can make no more than $28,200 for a family of two, $31,750 for a family of three or $35,300 for a family of four.

A single person earning less than $24,700 would be eligible.

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