Howard County government officials are directing more money toward homeownership and renovation programs designed to provide relief to buyers and residents in a challenging real estate economy.

County Executive Calvin Ball unveiled changes to two existing county initiatives Wednesday, one that provides low-interest down payment assistance to eligible buyers and another that offers rehabilitation loans for homeowners seeking to make repairs. A $4.5 million budget allocation would help expand the two programs, Ball said Wednesday, with $110,000 meant for homebuyer education workshops for households interested in qualifying for the down payment aid.

At a Wednesday news conference, Ball, a second-term Democrat, said homeownership has become far too exclusive for far too many in the wealthy Baltimore suburb.

“With mortgage interest rates at a 20-year high, many future homebuyers are hesitant to enter the market, while existing homeowners are discouraged from selling,” Ball said Wednesday. “To continue making Howard County a place where all families can call home, we must promote affordable homeownership opportunities that empower residents to put down roots in our community.”

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The proposals come just a few months after the collapse of his HOME Package, a policy bundle that would have curbed rent gouging in the county and broadened a law giving nonprofit organizations and private companies the power to purchase and preserve existing rental units for affordable housing. The rent cap would have prevented annual rent increases of more than 5% plus inflation or 10%, whichever is less.

But the County Council failed to take up the matter after it was introduced in October, and without an extension, it expired in January. At the time, Ball said he respected the council’s right to legislate on their own terms.

County governments have been forced to legislate their way out of dual housing supply and affordability challenges that have stagnated growth and pinched consumers over the last few years. State estimates peg the housing shortfall at 96,000 to 150,000 units, and research shows as many as half of all renters nationally are cost-burdened, paying more than 30% of their incomes on rent.

State lawmakers have a few more days left in the General Assembly to pass a set of policy proposals spearheaded by Maryland Gov. Wes Moore’s administration that aim to bring down home costs and protect renters. The bills have been significantly amended since the start of the session, according to nonpartisan outlines of the proposals. It’s not clear if all three measures can pass.

Howard County has become the unofficial epicenter of the state’s housing affordability crisis, having the highest home costs in the Baltimore area, according to data from Bright MLS, the regional listing service. In February, the median house in the county cost $552,500, the data shows, with half the homes exceeding that price and half falling below.

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Kelly A. Cimino, director of the Howard County Department of Housing and Community Development, said she expects the county’s latest initiatives to help hundreds of households every year, and some have already been approved for loan assistance.

Under the county’s new Settlement Downpayment Loan Program, income-eligible buyers could qualify for up to $40,000 per household in financial assistance — which can be deferred until a homeowner sells or refinances — and have the loan interest rate capped at 3%. Prior to the change, the county’s program set the loan interest rate at 2% below the buyer’s first mortgage rate.

“That was just unattainable for a lot of families to get that kind of [loan rate] and then to have to start making payments,” Cimino said in an interview with The Banner. “Many loans that came in, particularly for the lowest incomes, we could not approve because they could not sustain an additional monthly payment.”

Another new provision to the settlement down payment initiative would enable some homeowners — those earning 80% of the area median income, or about $95,000 for a four-person household — to have a portion of their loan balance forgiven if they agree to live in their homes over a 15-year period. People who work in the county also will have expanded access into the Workforce Initiative Loan, another down payment option.

As many as 41 mortgage lenders are approved to refer buyers to the county’s program, Cimino said, and so long as a buyer’s first mortgage loan is approved, they’ll be approved for county aid. The program fills in the gaps needed to finance closing costs; for example, if a buyer has $5,000 but owes $40,000, the county can provide up to $35,000, Cimino said.

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Meanwhile, the rehabilitation loan program would offer as much as $50,000 per loan with interest rates set at 0%, 1% or 2% based on household income levels; before, the interest rates were assigned a fixed rate. The 0% loans — meant for families earning 30% of the area median income, or $36,500 for a four-person household — could be deferred and forgiven after 5 years and the 1% loans — meant for families earning 50% of the area median income, or about $60,000 for a four-person household — can be deferred for 5 years.

Ball said this initiative focuses on the county’s older adults who may have aging homes in need of accessibility retrofits. The loans could also be used to address roof repairs, new HVAC systems, energy-efficient appliances or homeowners’ association violations, Ball said. Homeowners interested in these loans can apply directly to the county housing department.

Piet de Dreu, president of the Howard County Association of Realtors, said competition for midsized homes in the county has become so fierce that buyers have been forced to look elsewhere.

“There are so many offers that a standard offer that would have been accepted five years ago doesn’t stand a chance now,” said de Dreu, who started his term in November. “The experience is disappointment; a lot of disappointment.”

Recently, de Dreu made an offer for $425,000 on behalf of his clients that they then upped to $490,000, but they still lost out.

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“They lost against a cash offer, where the parents paid for the kids’ house,” he said. “Who has trust funds, right? It’s a select group, and definitely not your average people.”

Sellers have also begun deliberately listing their home prices artificially low to attract more offers, de Dreu said, which has helped push prices up and driven bidding wars. Winning offers tend to be all-cash or have waived appraisals and inspections.

The county’s programs will help some buyers, de Dreu added, but they won’t solve the crisis.

“It’s a supply problem, you know,” he said. “And lower interest rates aren’t going to make that any better.”

Hallie Miller covers housing for The Baltimore Banner. She's previously covered city and regional services, business and health at both The Banner and The Baltimore Sun.

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