Infusion to help buyers atclosing Settlement-loan program receives $2.4 million


The city's popular settlement loan program has received a $2.4 million infusion of funds that could help more than 550 families with closing costs for $38 million worth of Baltimore homes.

"We're excited that we can again offer this outstanding home-buying incentive, which will continue to stimulate the housing market in Baltimore City," said Tom Jaudon, director of the city's Homeownership Institute.

Funds became available Friday.

The Settlement Expense Loan Program (SELP) was launched in February 1994, and the city made 1,300 loans totaling $5.5 million before the funding ran out. The program was not budgeted to be funded again until next July, when the new fiscal year would begin.

But the city's Board of Estimates recently approved the sale of a $1.4 million bond in order to replenish SELP, and city officials have found another $1 million in unused bonds for the program, according to Zack Germroth, a spokesman for the Department of Housing and Community Development.

The SELP program has been one of the tools credited with helping Baltimore post the only year-to-date increase in home sales among area jurisdictions. City settlements are up 3 percent over 1994.

The program is limited to first-time homebuyers. The average SELP loan has been $4,300, and the average home sales price was $68,100. Buyers using the program have had an average income of $37,900.

Individuals interested in the program should talk to a real estate agent or one of the participating lenders about program requirements and application procedures. A special SELP telephone line can also be called at 396-8407.

Applications for SELP loans are accepted by participating lenders and processed at the same time as the mortgage application. Lenders pass documentation on to the city for review of the SELP application.

The number of lenders participating in the program has increased from five to 13.

Lenders include American National Savings Bank, Columbia National Bank, First Fidelity Bank, First National Mortgage Corp., Inland Mortgage Corp., Key Federal Savings Bank and Loyola Federal Savings Bank. Also, Mercantile Mortgage Corp., MNC Mortgage Corp., North American Mortgage Corp., Norwest Mortgage, Provident Mortgage Corp. and Signet Mortgage Corp.

SELP loans range from a minimum of $1,000 to a maximum of $5,000, with a maximum term of 10 years.

Among the settlement expenses covered by the loan are title search and insurance fees, property taxes and insurance, transfer and recordation taxes and fees, mortgage insurance fees, and loan points and origination fees.

Applicants must have insufficient cash to pay reasonable settlement expenses. There are no income limits for applicants, and the homes can be priced up to $203,150.

The annual interest rate on the SELP loan, currently 7.25 percent, is determined by the city based on the its cost of issuing bonds.

The homes must be located within the city; they can be detached, townhomes or condominiums.

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