Duncan Signs Bill Creating Closing Costs Loan Program

mh/housing.pr 97-58 Contact: David Weaver, 301-217-6530 or
Scott Reilly, 301-217-2374

DUNCAN SIGNS BILL
CREATING CLOSING
COSTS LOAN PROGRAM For Immediate Release: February 27, 1997

Montgomery County Executive Douglas M. Duncan today, signed into law a bill that
will allow an average of 250 families a year to obtain below market interest loans for home
closing costs. The loans are expected to be available by mid-summer 1997.
"This bill will help remove the single greatest obstacle to affordable housing for our
families, namely the high up-front costs of purchasing a home," said Duncan. "I want to
commend the County Council for its support of this legislation and for recognizing what this
program will provide for many of our working families who struggle to obtain the American
dream of owning a home. "
The bill, which will become law within the next 80 days, was approved by the County
Council in a 7-0 vote on February 18. Under the legislation, which was first suggested by
Duncan in his December 1995 State of the County address, eligible moderate-to-middle
income families can apply for the loans ($7,500 or 5% of purchase price, whichever is less)
for any down payment, customary fee, premium, tax, escrow requirement or charge incurred
at a real estate closing. To be eligible for the loans, the home buyer must be a first time
purchaser and have an income at or below the area median income (currently $70,300 for a
-more-

DUNCAN SIGNS HOME CLOSING COST BILL 2-2-2-2

family of four). A proposed maximum purchase price for the home is currently set at
$180,000. Payments for the loan will be amortized over seven years.
"The closing cost assistance program is an excellent way to leverage County
government funds by providing for loans that eventually will be repaid so that the funds will
be available for other loans," said County Council President Marilyn J. Praisner. "The bottom
line is that this modest program will make it possible for some folks to realize their dream of
home ownership."
Program certification and day-to-day administration of the program will be handled by
the Montgomery County Housing Opportunity Commission, with policy and eligibility criteria
established by the County's Department of Housing and Community Affairs.
While all families meeting the eligibility requirements for the program will be
considered for the loans, some funding will be set aside for buyers in designated areas with a
low rate of home ownership. Homes may be detached, a townhouse or condominium, and the
loan may be used to purchase a Moderately Priced Dwelling Unit, or used in conjunction with
HOC mortgage loans.
"With this program, the County can not only help improve the quality of life for an
individual but that of entire communities," said Councilmember Derick Berlage. "I look
forward to working with the County Executive and neighborhood activists to put this program
into high gear."
In addition to the loans, families will also receive home buying and home ownership
counseling and education. # # #

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