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A Silver Lining in the Subprime Meltdown

Washington Afro American, News Feature, Sean Yoes Posted: Nov 22, 2007

Editor's note: Sean Yoes, when he's not landing roles on television (like the HBO's The Wire), writes for the Afro-American Newspapers in Washington, D.C. and Baltimore.

This year's sub-prime mortgage bust has done a lot of damage in a short period of time to the U.S. housing industry and the economy as a whole. And the Washington and Maryland area has been just as affected.

In Maryland, for example, home foreclosures tripled in the first seven months this year to more than 9,000 compared to about 2,500 at the same time in 2006.

But, in the midst of the misery there are still some bright spots. Even as mortgage lenders make things tougher and low- and moderate-income home buyers, there are two programs that are helping them continue to buy homes.
homeownerMia Butler bought her home through
the Housing Assistance Purchase Program

In Washington, hundreds of residents have used the Home Purchase Assistance Program (HPAP) for first time home buyers.

"It's an unbelievable feeling to own a home in my native city."

HPAP provides up to $70,000 in a zero interest loan to lower and moderate income individuals and families to purchase homes in Washington. The Greater Washington Urban League has been using the program for more than 10 years to put families into homes.

"The program was started by former mayor Marion Barry," said Maudine Cooper, president and CEO of the Urban League in D.C. "We've been running the program since 1994." "This year we gave out about $30 million of down payment assistance to the 513 recipients"

Mia Butler was that 513th person to buy a home through the Urban League under the program. She purchased a three-bedroom duplex on a tree-lined lot that has a large deck in the back.

"It's an unbelievable feeling to own a home in my native city," said Butler, the mother of two daughters, ages 18 and one. "A lot of people are born and raised in D.C. and want to stay but don't know HPAP is out there."

Butler learned about the program through a girlfriend who purchased a condo through HPAP. Butler in turn has told others, including her siblings and all the teachers at her daughters daycare.

The American Dream Downpayment Initiative (ADDI) is another down payment assistance program for lower to moderate income individuals that has provided a path to home ownership for some. It is funded by the department of Housing and Urban Development (HUD).

ADDI provides up to $10,000 in zero interest loans for first time home owners in many Maryland jurisdictions including, D.C., Anne Arundel County, Harford County, Howard County, Baltimore County and Baltimore City.

"In fiscal year 2007, we gave out $2.8 million to recipients in Baltimore City," said Cheron Porter director of communications for Baltimore City Housing.

The sub-prime mortgage hysteria has probably dissuaded many from attempting to purchase a home. But, there are some within the housing industry who believe the time is still right for low and moderate income individuals to invest in home ownership.

"It's still a very good situation," said Kimberly Henderson, director of Housing and Community Development for the Washington Urban League. "There are a wide range of lenders often referred to as community lending programs who have tailored programs for low to moderate income homebuyers."

Homebuyers have to take the responsibility to obtain as much information as possible on what is usually the most important purchase in a person's life, she said.

"They need to educate themselves about the loan products that are out there," she said. "First, they should seek home ownership counseling. There are community based organizations that provide free housing counseling and training and they should take advantage of that.

"For prospective homebuyers getting that education before getting pre-approved is really critical."

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