St. Ambrose Housing Aid Center Asset Control Area

In 2000, Baltimore was identified as having the highest number of Federal Housing Authority (FHA) foreclosures per capita of any city in the United States, eclipsing Los Angeles, New York, and Miami. In 1999, according to a study by the National Training and Information Center commissioned by The Abell Foundation, Baltimore had a staggering inventory of 677 FHA-foreclosed houses and 2,200 delinquent FHA loans. During the previous ten years, a total of 2,500 FHA houses had gone through the foreclosure process. The growing inventory of FHA foreclosures became harder to market because the appraised values did not reflect the costs of renovation and repair. Houses sat vacant, reducing their marketability, affecting surrounding properties, and depressing housing values.

Beginning in 2001, St. Ambrose Housing Aid Center brought together in a partnership the U.S. Department of Housing and Urban Development (HUD) “Dollar House” program, which provided for renovating and selling 61 FHA-foreclosed houses throughout the city, and The Abell Foundation, which guaranteed the credit to support the initiative. When HUD discontinued the program, St. Ambrose turned its attention to a newly established HUD program called Asset Control Area (ACA). Administered by HUD in a number of cities, the program allows FHA-foreclosed houses within the boundaries of an ACA to be offered to a designated nonprofit or city agency at 50 percent of the appraised value.

In 2004, The Abell Foundation provided a $150,000 grant to St. Ambrose for staff costs to buy, renovate, and sell vacant FHA-foreclosed houses in a newly established ACA in Northeast Baltimore. St. Ambrose had worked with HUD for two years to convince the agency to include majority homeownership areas in the ACA. St. Ambrose provided demographic, home ownership, and sales documentation to make the case for including areas that were experiencing a lower volume of foreclosures than other parts of the city. Although St. Ambrose was confident of its ability to stabilize neighborhoods that were seeing their first few foreclosures, it lacked the resources to do large-scale redevelopment in areas with a concentration of foreclosures. The boundaries of the ACA ultimately agreed to by HUD include the neighborhoods of Ramblewood, Idlewood, Northwood,Woodbourne, and Chinquapin Park.

Within the ACA, St. Ambrose is required to purchase all of the FHA-foreclosed houses. HUD provides a 50 percent purchase discount, and St. Ambrose arranges acquisition and renovation financing from five regional lenders.The Abell Foundation funding pays staff costs to acquire and develop housing, supervise construction, and oversee sales. The houses are sold to buyers earning less than 115 percent of the area median income ($68,000 for a family of four).

St. Ambrose acquired the first FHA-foreclosed house in October 2004 for $42,000, completed renovations totaling $66,000, and sold the property to a homebuyer in March 2005 for $125,000. As a result of the success of the program, Senator Barbara Mikulski facilitated a $300,000 federal grant to St. Ambrose to expand the program. The federal funds are used to purchase and renovate private foreclosures in the same area and to expand the boundaries of the ACA to include parts of the Belair-Edison neighborhood.

As of December 2005, St. Ambrose had purchased 71 FHA-foreclosed houses through the ACA program. Construction and renovation was completed on 39 houses, with a total of 37 houses sold to new homebuyers. St. Ambrose’s early intervention in purchasing and renovating FHA foreclosures appears to have reduced foreclosures within the ACA in the past six months. To increase the neighborhood and geographic impact of the program, St. Ambrose is preparing an application to HUD to double the size of the ACA boundaries.