A new home-buying program is being rolled out this weekend for prospective buyers in Prince George’s County and Washington, D.C., as part of a national bank settlement.
Wells Fargo will be hosting an event Friday and Saturday at the Walter E. Washington Convention Center in Washington, where those who meet financial requirements could get as much as $20,000 toward the purchase of a home.
Wells Fargo has been required to offer the program, known as CityLIFT, across the country as part of a July 2012 settlement with the U.S. Department of Justice. The $175 million settlement, the second-largest related to violations of fair-lending practices in U.S. history, came as the DOJ accused the mortgage giant of continously charging qualified black and Latino borrowers higher interest rates, as well as steering them to more risky sub-prime mortgages than white borrowers between 2004 and 2009. The settlement required $125 million be given to those borrowers who were wronged, while an additional $50 million be given out as down-payment assistance to communities that were discriminated against or have been heavily effected by the housing crisis, according to a DOJ statement.
The bank will be offering a total of $7 million in grant money to anyone seeking to buy or remodel a home in the county or Washington. To qualify for the program, a family’s household income cannot exceed 120 percent of the median household income in the area. For example, a single person hoping to buy a home couldn’t have a household income greater than about $90,000.
The grants do not require borrowers to put up matching funds, however, those interested must bring financial information proving their ability to afford a home.Those interested in the program must attend the event, otherwise they will have to apply for any funds that might remain after money is divided up during the sessions, said Michael McCoy, a Wells Fargo spokesman.
Prince George’s County and Washington are only the second in the country after Philadelphia to receive the new program.
The program has the potential to help residents find new homes, said County Executive Rushern L. Baker III (D).
“Prince George's County has a great inventory of homes and attractive amenities for prospective homeowners in the Washington region,” Baker said in a statement. “These grants will help people get over the tremendous financial hurdle of finding funds for a down payment and position them to make one of the largest investments of their lives."
County statistics show the housing crisis that began around 2008 has hit local housing markets hard. Among neighboring counties such as Montgomery and Baltimore, Prince George’s leads in terms of residential vacancies, with roughly 7 percent of homes vacant. The county leads all but Washington, where roughly 10 percent of homes are vacant, according to a May 2010 study by the county government’s CountyStat program.
Prince George’s leads the state in terms of foreclosures. In the second quarter of 2012, the county had more than 1,200 foreclosure events, far outstripping Baltimore city, which had 699, according to statistics from the Maryland Department of Housing and Community Development.
However, a one-time infusion of new buyers into the market doesn’t seem like a fix for the region’s housing woes, said Carl Allen, vice president of the Mitchellville-based trade group, Prince George’s Real Estate Professionals.
“You can't save a community one house at a time,” he said. “They need to do something more comprehensive.”
The $7 million allotted for home buyers in Prince George’s County and Washington could lead to about 350 new homeowners. The program does not require the money be split evenly between the county and Washington. In addition to the grant money, those who are accepted into the program must agree to receive financial counseling so they fully understand the obligations and costs of owning a home.
“I'm very excited. I think its going to be great for us to help stabilize the housing market,” said Andy Bertamini, Wells Fargo's regional president for Maryland. “Every bit of progress is positive.”