Nearly 4,000 turned to the state last year for $767 million in low-interest home loans.
Here’s a mortgage program that’s not in trouble.

Here is an article from the Baltimore Sun about the Maryland ”more house 4 less” CDA loan program, something very near and dear to my heart.   “More House 4 Less” or CDA (which stands for Community Development Act), gives first time home buyers in the state of Maryland a fantastic rate on a mortgage, AND they also give you money towards closing costs.  Their income limits are very high for this type of program.  You can make more than $80,000 in the counties, and almost $100,000 in the city and still qualify.  Have kids?  You can make even more money and still qualify.

Now, some lenders aren’t so keen on this program.  It does have more paperwork and is a more involved process for me, the home buyer, and the realtor.  But this is the program that can get you into a house for $1000 or less out of pocket, and with a lower rate than you can get anywhere else!

Want to learn more??  Read on, and email or call me to get going with this program.

Nearly 4,000 homebuyers turned to the state for their home loans last fiscal year, a record for Maryland’s 28-year-old loan program at a time of increasing disarray in the mortgage industry.

The state made about $767 million in low-interest loans to buyers, almost all of them purchasing their first home, in the 12 months that ended June 30. That’s three-and-a-half times the amount it lent the previous fiscal year – and far above the $269 million record set in the 1995 fiscal year.

Stephen D. Silver, the state Department of Housing and Community Development’s chief financial officer, credits timing for the big jump in demand.

The state expanded its “More House 4 Less” offerings a few years ago from a single product to several – 30-, 35- and 40-year mortgages including interest-only loans – but word filtered out slowly.

Meanwhile, first-time homebuyers found their private mortgage options shrinking this year as foreclosures rose and lenders, stung, backed away from borrowers with shaky credit or little money to put down.

“I’m sure we are picking up some people that were being steered toward subprime,” said Silver, referring to loans aimed at borrowers with credit problems.

Thus far, the state has fewer delinquent loans than do lenders with mortgages in Maryland insured by the Federal Housing Administration, the state housing and community development agency said.

The state’s loans have below-average interest rates – about 6 percent last fiscal year while the market rate was closer to 6.5 percent. Borrowers are also eligible for assistance with down payment and closing costs.

The products are all fixed rate. “We wanted to make sure our borrowers were getting something with no surprises,” Silver said.

The state made 3,882 loans last fiscal year, triple the number a year earlier. Though that’s a fraction of all new loans, it’s a hefty increase at a time of slumping home sales.

Home values, which remain high, are part of the reason homebuyers would flock to a program that offers down payment and closing-cost help. Many first-time buyers are hard pressed to put even 5 percent down. With average sales prices in Maryland at $380,000, a 5 percent down payment would equal $19,000.

The average More House 4 Less borrower got a loan equaling 99 percent of the value of the home. Nine out of 10 participants got down payment assistance, closing-cost help or both from the state.

Borrowers had to be buying either for the first time or in targeted areas, such as Baltimore City. The average borrower had a household income of about $55,000 and purchased a home priced at almost $200,000.

The state housing agency, which finances its loans with mortgage revenue bonds, said it hasn’t run into trouble getting money as investors abandon other parts of the mortgage market. Silver figures that’s because the bonds are rated AA and are mostly tax-exempt, and because all the mortgages the state approves have either private or government insurance. (baltimoresun.com, author: Janice Smith Hopkins)