The 4 month closing…

1 05 2009

So way back when, on April 23rd, I went under contract on a 2 bedroom rowhouse in the Patterson Park area of Baltimore.  I had been househunting since December and seen at least 40 places.  Though this place needed some work, it had the right amount of character I was looking for with exposed brick walls, skylights, some original architectural details (tile in the doorway landing, original foyer door, fireplace mantle in master).  I knew it had potential, it was in my price range and was an estate sale that was ready to settle.  Now, I’ve never bought a house before so I didn’t know a lot about the process, but I had been doing my research for quite some time and went to housing counseling, so I felt prepared.  I chose to use the Healthy Neighborhoods program, which is based in Baltimore and works with neighborhoods that have a ton of potential and choose target blocks where people can buy to participate in their program.  Some basic details of the program:

  • You are required to do $5,000 of exterior work on the home to improve the outside appearance or value
  • You can do additional work and borrow up to 120% of the home’s appraisal value
  • There are forgivable loan grants available from Baltimore city that will match the amount of money you are borrowing to do the work, up to $10,000 (they are 20% forgivable per year)
  • Once the work is complete you lock into a rate that is 1% below the current Fannie Mae rate

There are more specific details available on their website.  Now, this is a great program, but you need to be prepared for a lot of red tape and hoop jumping (hence, the 4 month closing).  Of course, before we even had to deal with Healthy Neighborhoods there was back and forth with the seller with my offer and their counter offer and my counter offer and their agreement.

One of the major details of Healthy Neighborhoods is that you must have contracts for all the work you plan to do before they will give you their approval and you can move ahead with financing.  You need to understand how difficult it is to find a contractor who will come to a home that you don’t own yet to give you an estimate for work!