Baltimore is one of 20 U.S. cities to start a new program that aims to distribute $4.5 million in grants for new city homeowners to use as down payments.
The grants, unveiled Monday at City Hall, will total $15,000 per homebuyer and will be administered by the CityLIFTS program.
The assistance is in part a result of a settlement reached last year between the city and Wells Fargo Bank N.A. The city in 2008 filed a mortgage discrimination lawsuit against Wells Fargo.
The suit was settled with the U.S. Department of Justice last summer after the banking giant agreed to pay $125 million to settle charges of bias by African American and Hispanic homeowners.
The city accepted the $4.5 million for the program from Wells Fargo in return for an agreement to dismiss its lawsuit, bank officials said.
Mayor Stephanie Rawlings-Blake and the city’s housing Commissioner Paul T. Graziano announced the down-payment grants Monday.
The program will be a partnership between Wells Fargo, NeighborWorks America and the nonprofit Neighborhood Housing Services of Baltimore. The nonprofit’s board is made up of several local banking executives and community representatives.
Under the program, CityLIFTS can provide $15,000 in down payment assistance grants to new Baltimore homebuyers.
The program will also fund “homebuyer education” programs in city-based areas impacted by the recent financial and housing crisis.
“This collaboration with Wells Fargo and local nonprofits will help Baltimore residents achieve the American dream of homeownership by offering financial support, as well as the resources to help them make successful investment decisions,” the mayor said in a statement.
City officials said that prospective homeowners must meet income guidelines, complete a homebuyer education course and have a signed contract to purchase a home in the city in order to qualify for the $15,000 down payment assistance grants. The grants will be awarded in two phases this year.