Howard Bank’s Manager of Consumer Loan Operations, Donna Frederick, joins teacher Sheree Powell and her sons, Darren, 4, and Devin, 6, on the deck of their Wilde Lake condo, purchased under the bank’s Public Servant Loan Program.

Howard Bank’s Manager of Consumer Loan Operations, Donna Frederick, joins teacher Sheree Powell and her sons, Darren, 4, and Devin, 6, on the deck of their Wilde Lake condo, purchased under the bank’s Public Servant Loan Program.

New Mortgage Program Lets Public Employees Live Where They Work

On a warm, sunny Sunday afternoon recently, friends and family members piled into Sheree Powell’s Wilde Lake condo. It was a housewarming party for the Bonnie Branch Middle School English teacher, whose email moniker is SuperabundantlyBlessed.

Powell’s latest blessing may be the Wilde Lake condo, which she purchased under the Howard Bank’s Public Servant Loan Program, an innovative program for first-time Howard County home buyers.

The program is the first targeted to county government professional employees under the bank’s Community Enrichment Program. Among the people eligible to apply are teachers, police officers, firefighters, county government workers and Howard County General Hospital employees who have never owned a home in Howard County.
“For so many of the people who provide valuable services to our community, the cost of housing in Howard County makes buying a first home here nearly impossible,” says bank president and CEO Mary Ann Scully. The Public Servant Loan Program removes many of the obstacles to home ownership.

The maximum loan amount under the program is $450,000. No down payment is required. Instead, the bank provides up to 110 percent financing through first and second mortgages, with an additional 10 percent available on the second mortgage for closing costs or documented home improvements.

On their first mortgage, borrowers pay an interest rate equal to Howard Bank’s seven-year ARM. Interest on the second mortgage is fixed at the bank’s current second mortgage rate.

The term of the first mortgage is 30 years. Buyers make interest only payments on the second for seven years, and its remaining balance is amortized for the remaining 23 years at the original rate.

Because the loan is structured as first and second mortgages, no PMI insurance in required, removing another obstacle to home ownership.

Powell, a single mother with two sons, says buying her two-bedroom condo in Wilde Lake “marked a rebirth for my family. It symbolized the restoration of our lives. It means stability and convenience. My job is 12 minutes away versus 45 minutes to an hour.”

She heard about the program at a Howard County Education Association function.

“I received flyers and was asked to pass them out and post them.” she says. “I looked at them and said ‘hey, let me give it a shot!’”

Within two months, she and her sons were settling into their new home, thanks to the efforts of Donna Frederick, Manager of Howard Bank’s Consumer Loan Operations.

Local Realtors are enthusiastic about the program and say it’s long overdue.

“We often have to counsel prospective new Howard County homeowners that they are going to have to ‘settle’ for an adjoining county in order to get a home of any sort,” says Linda Odum, a Realtor with RE/MAX 100. “But the people who contribute in such a material way to the very excellence that attracts the county’s affluent residents shouldn’t be excluded from living here.”

But buying a first home in Howard County on a teacher’s, firefighter’s or police officer’s salary isn’t easy.

The average price of a home sold here last summer was $451,871, more than 20 percent higher than the summer of 2004, when the average price of housing jumped 22.5 percent over the previous year.

According to Howard County public school system spokesperson Patti Caplan, 2,600 of the county’s 7,000 educators and support staff live outside the county. Of the police department’s officers and civilians, 280 of the 508 employees live outside the county, said department spokesperson Sherry Llewellyn.

Howard Bank wants to change that.
“We hope to strengthen, in some small way, the fabric of the community by making it easier for these workers to buy, renovate and finance their first home in the same county where they work,” Scully says.

Applicants for the mortgages must have good credit. There’s minimal paperwork. And usually once the buyer has found a home, the transaction can be completed in just a few weeks.

Howard Bank opened in August of 2004 and has branches on Snowden River Parkway in Ellicott City and in the Hickory Ridge Village Center in Columbia.  A third branch at Johns Hopkins and Old Columbia Roads will open later this year. A fourth branch is planned for Route 40 in Ellicott City.

For information on the bank’s Public Servant Loan Program, call Donna Frederick, 410-750-0020, extension 236.