Neighborhoods of Greater Lauraville - Slavie Federal Savings Bank: Facade and Home Improvement Loan Program

The neighborhoods of Arcadia, Beverly Hills, Moravia-Walther, Morgan Park and Waltherson have high rates of homeownership, and appealing and varied housing styles, but the housing has typically been under-assessed and undervalued. In the spring of 2001, to show visible improvements in the neighborhoods, increase housing values, and encourage other homeowners and homebuyers to invest, The Abell Foundation committed to guarantee 10 percent of each home improvement loan made by Slavie Federal Savings Bank to a homeowner or new home purchaser in Lauraville and surrounding neighborhoods.

Slavie agreed to offer maximum loans of $20,000 at a below-market rate with no post-rehabilitation house value threshold. Such a threshold can limit the amount of a traditional loan when area housing is undervalued, making it difficult for owners to borrow for improvements and leading to a further lack of investment. The loans can be used to improve the outward appearance of houses and to renovate interiors, especially kitchens and bathrooms, which improve livability and typically add value immediately.

The Neighborhoods of Greater Lauraville, Inc., the nonprofit sponsor of the program, markets the loans to current owners and prospective buyers through its website, direct promotions and special events. The organization works to pre-screen and qualify applicants prior to referral to Slavie.

In the past two years, Slavie has made 21 loans for a combined value of $344,000 in home improvements. In the same period, the Neighborhoods of Greater Lauraville reports that housing values have increased 22 percent in Greater Lauraville while housing prices in Northeast Baltimore have increased 11 percent overall. With steady demand for the program, The Abell Foundation and Slavie have agreed to double the size of the loan pool to $600,000.