Prince George’s County government and business leaders are looking for ways to make it easier for residents to get down payment assistance when buying a home.
Members of the Prince George’s Real Estate Professionals, a Mitchellville-based trade group, are encouraging the county’s Department of Housing and Community Development to shorten the time frame for approval in the agency’s My HOME and Buy Suitland programs, which provide financial assistance for down payments and closing costs for residents.
Representatives of the trade group argued it currently takes too long for residents attempting to purchased foreclosed and short sale homes to be able to make a deal with the banks that own them because of the time it takes to get approved for the agency’s aid.
Carl Allen, vice president of the group, said the down payment programs’ advertised maximum processing period of 21 days — which begins after the bank’s loan approval process is complete — can take as long as 60 days.
“What you’re dealing with a lot of time is that the owners of these properties are banks, and with short sales, and they often only give you 45 to 60 days [to close],” Allen said. “So the market is saying, ‘We don’t want to deal with this,’ and they use alternative financing methods. So the county isn’t getting their funding on the street like they could be.”
Allen said he wants the county to be able to efficiently spend the federal funding allocated to the projects, which includes $1 million for the Buy Suitland program and $1.2 million for MY HOME, and not have to return unspent money at the fund’s termination date in March 2014.
But housing department Director Eric C. Brown said the advertised 21-day time frame for approval is a worst-case scenario, and his agency typically processes applications within 17 days, and at times as short as five days. The 21-day figure is intended to account for potential problems in documentation or settlement with lenders, Brown said.
“To the extent it is possible, without sacrificing our due diligence, we’re willing to explore whether there may be opportunities to reduce the time frame,” he said. “... What you want to be able to do is not create unrealistic expectations [over the processing period], because everybody knows there are circumstances beyond our control.”
According to housing spokeswoman Alexis Yeoman, 186 loans were closed in fiscal 2011 using the My HOME and Buy Suitland programs to assist with down payments and closing costs.
Rosalyn Clemens, who manages the programs, said she thought the county already was on track to spend all of the federal funds by March 2014.
James Adamson, a branch manager for the Baltimore-based 1st Mariner Bank, said about 20 percent of the loans his company handled in the area have used the county’s down payment assistance programs, and they usually take 20 to 30 days to qualify for the programs. Adamson said he and the county already are testing out new ways to try to streamline the process.
“We’re already running test cases to see how to speed the process up,” Adamson said.
Adamson said the shortest the process can get is probably “two-and-a-half weeks,” because there is inherently a great deal of bureaucracy involved. But that still might not be short enough for many county properties, he said.
“In Prince George’s, there are a lot of short sales and foreclosures, and when you write a contract, you don’t necessarily have a deal,” Adamson said. “There’s already a lot of time wasted on that, and the bank can change the sales price. Those types of loans, you’re not going to be able to close in a two-week period, so it’s hard.”