WASHINGTON – Pilot programs recently started in the District and Baltimore to help low-income and minority residents finance homes will soon be expanded to six other cities, officials announced Wednesday.
“What residents can hope to gain is home ownership. The best products, the mortgage they need … at the lowest cost possible,” said Leland C. Brendsel, chairman of the congressionally chartered Freddie Mac.
The programs – run by an alliance of church and housing groups and the mortgage industry – are expected to help 150,000 families obtain home mortgages by the year 2000, Brendsel said.
Under the programs, more than 300 residents of Washington, D.C., have already entered the mortgage process in the last four months, said Marcia Griffin, president and founder of HomeFree USA, a nonprofit housing organization based in the city.
Programs in Baltimore just started, officials said. The alliance is also targeting residents of Cleveland; Dallas; Shreveport, La.; Kansas City, Mo., and Kansas City, Kan.; and the Tampa/St. Petersburg area in Florida.
“We are determined to bring the benefits of the secondary markets to more borrowers of every race and class,” Brendsel said.
This is the first time Freddie Mac has tapped the resources of religious organizations for a business agreement. “The churches are a source of potential home owners,” Brendsel said.
Under the alliance, Minority Enterprise Financial Acquisition Corp., a financial arm of the 12.7 million members of the National Baptist Convention and the National Baptist Convention of America, seeks out churchgoers in need of home financing help. It directs them to participating banks.
“The church has the job of pounding away at people who we see every Sunday who could be as successful as the next man,” said E. Edward Jones, president of the National Baptist Convention.
Meanwhile, HomeFree USA recruits potential home buyers from churches and social service organizations. It, too, steers potential buyers to lenders.
“We are the vehicle to carry the people from the church to the lender and into Freddie Mac,” Griffin said.
Locally, Chevy Chase Bank is one of the lenders.
The bank loans are bought by Freddie Mac and packaged in securities to be sold at the New York Stock Exchange.
The proceeds allow the banks to fund new mortgages for other home buyers and apartment owners.
“We want a better life for under-served people,” Griffin said. “There had to be a marriage between [the mortgage] industry and the minority community.” Freddie Mac, chartered by Congress in 1970, buys mortgage loans from local banks to package and sell in global markets. Since its charter, the company has bought more than $1.3 trillion worth of mortgage loans from lenders and helped more than 18 million people finance their homes, officials said. The independent company is federally regulated. -30-