CDA loans are a function of the Maryland Department of Housing and Community Development. DHCD implements housing policies to promote and preserve homeownership in the state of Maryland and CDA loans are a large part of that.
That's because CDA (Community Development Administration) loans currently have rates as low as 3.5% and even lower rates on short sales, foreclosures and other loan programs. It’s a 30 year fixed rate mortgage loan that has down payment and closing cost assistance available as well.
CDA loans are for owner occupants only but you don’t necessarily have to be a first time buyer. Buyers who are purchasing in “targeted areas” do not have to be first time buyers.
But you must attend homeownership counseling and acceptable credit is required. CDA loans are underwritten to normal mortgage industry credit standards. A participating lender will be able to help you analyze your credit standing.
It’s also important to note that Federal law provides for a possible Recapture Tax when some homeowners sell their home within the first nine years after receiving a mortgage through the Community Development Administration’s (CDA) Maryland Mortgage Program. The recapture tax is applied if both of the following criteria are met:
- You sell or dispose of your home at a gain within nine years of acquiring it, and
- Your income at that time no longer allows you to qualify
But to remove the confusion about having to repay a recapture tax, CDA agrees to reimburse any CDA homebuyer, who settles on their home on or after July 1, 2005, the amount of any recapture tax that the CDA homebuyer pays in connection with the sale of the home.
The free Maryland Mortgage Program kit describes in great detail the interest rates, down payment and closing cost assistance that's available, a list of approved Lenders, homeownership counseling agencies, and the 7 Quick Steps to Getting Started and more.
Pick up your FREE Maryland Mortgage Program kit, TODAY!
Or take a look at the full version below: Maryland Mortgage Program- Free Kit
For more affordable options to buy your first home in Maryland, contact us for more information. We’d be happy to answer any questions you may have. No pressure.