I want to buy a home in Severn. What loan products are available?
Great question – I get this one weekly! Anne Arundel County has a few loan programs that are county specific. They fall under the Maryland Mortgage Program (MMP). Community Development Administration loans are the most popular and commonly used.
When using the CDA loan, there are other loans that can be combined. DESLP, House Keys 4 Employees and BRAC Match are some of the closing cost and down payment assistance programs that are available to use with the CDA loan.
They are all a part of the Partner Match Programs.
What is a CDA loan and who is qualified?
A Community Development Administration (CDA) loan is a 30-year fixed mortgage loan that uses a similar market rate to FHA and VA. You can use a CDA loan for up to a $417,000 purchase price.
To qualify you must fall into the following criteria:
- Be a first time homebuyer (unless purchasing in a targeted area)
- Have acceptable credit
- Meet income guidelines
- Attend a homebuyer workshop
You will talk with a preferred lender to be sure you are qualified before working with a realtor to find a home.
I hear there are a lot of short sales and foreclosures on the market. Can I use the CDA loan for those homes?
You can use a CDA loan to purchase a foreclosure, short sale and even to rehab a home!
The FHA 203K can be used with the CDA loan at a really low interest rate. Today the rehab loan rate was 3.875%.
What’s the difference between a FHA loan and this CDA loan?
To clarify, the CDA loan is also a FHA or VA loan and is still a government backed loan. The biggest benefit to buyers is that they get to piggyback on this loan with the closing cost and down payment assistance programs also available. With a straight FHA they would be paying closing cost out of their pocket.
I had so many questions on this topic! Next week I will answer the closing cost and down payment assistance questions!