Baltimore, Md. City Council President Nick Mosby introduced a package of new bills this week, one of which includes the establishment of a grant program designed to assist the city’s reverse mortgage borrowers. This is according to a report published by local National Public Radio (NPR) affiliate WYPR.
Urging Baltimore Mayor Brandon Scott to fund the proposed measures using funds allocated to the city by the American Rescue Plan Act signed into law earlier this year by President Joe Biden, the total cost for all of Mosby’s proposed programs is estimated to be around $200 million. However, the mayor has the most authority when it comes to the majority of the city’s spending.
“[The proposed] bill would create a Reverse Mortgage Grant Program to give senior residents grants of up to $5,000 to make payments toward reverse mortgages — a loan in which homeowners convert property equity to cash payments, often to financially support themselves during retirement,” the WYPR report says. “Eligible residents would be legacy residents from disinvested communities, have incomes at or below 80% of the area median income, be at least 60 years old or be Federal Housing Choice Voucher Recipients.”
Many of the provisions introduced by Council President Mosby this week are centered on combating “redlining” in the city’s neighborhoods, which means that lenders allegedly discourage prospective applicants from applying for mortgage loans on the basis of race.
According to a May 2021 report compiled by the Baltimore-focused philanthropic Abell Foundation, much of the activity for HECM lenders in Baltimore is focused on minority neighborhoods, and the rate at which Black Baltimore residents take out a reverse mortgage loan is significantly higher than the national average.
“HECM borrowers in the last few years are almost evenly split between Black (46%) and White (41%) and borrowers; 11% of loans had no borrower race identified,” the report reads. “By way of context, the Census’ American Community Survey 2015-2019 indicates that Black people comprise 53% of Baltimore homeowners and White people comprise 42%. Among householders over 62-plus years of age, Black people comprise 59% of homeowners and White people comprise 38%. Thus there is a slight under-representation of Black people among HECM borrowers and a modest over-representation of White people.”
“This bill would help to keep them back on track, reduce some stress and move forward to a happier and better life,” said Sharon Green Middleton, lead sponsor of the bill to WYPR.
The reverse mortgage proposal is only part of a larger package introduced by Council President Mosby, who also introduced a measure to resurrect a popular dollar house program in the city and another to create a fund for home repair grants of up to $25,000 for properties in neighborhoods determined to suffer from redlining.
Read the story at WYPR.