FAQ

Lender FAQ

Maryland Mortgage Program

How do I become a Maryland Mortgage Program approved lender?

Lenders must be approved by US Bank (the master servicer) and complete an application to be a participating lender. After the Department of Housing and Community Development reviews and approves the required application and supporting documentation, the lender receives an initial training and is given access to the Lender Online internet reservation system. An application may be obtained from Single Family Housing by calling us 410-514-7530, or emailing SingleFamilyHousing@dhcd.state.md.us.

Why does the Department require borrowers to provide affidavits and tax returns?

The Department receives authority through the IRS to issue tax-exempt mortgage revenue bonds to fund mortgages under the Maryland Mortgage Program. It is a requirement of the federal government that this documentation be used in order to establish the borrower's eligibility under the IRS rules.

What type of loans are eligible under the Maryland Mortgage Program?

The following are eligible: 

  • Loans insured or guaranteed through Government insurers/guarantors - FHA, VA or Rural Housing Service (RHS);
  • Uninsured conventional (80% or less Loan-to-Value);
  • Conventional loans insured through private mortgage insurers approved by the Department.

The loan must be made to an income eligible borrower to purchase a home in which they will reside and whose purchase price is within the limits for the program. 

How do I reserve funds through the Maryland Mortgage Program?

Reservations are entered by the lender through Lender Online, an internet-based reservation system. Once an eligible reservation is entered, the lender receives an immediate confirmation. Lender Online is available 24/7 and provides up-to-the-minute status on loans from reservation to submission of final documents.

How do I find a census tract when I reserve a loan under the Maryland Mortgage Program?

Go to www.ffiec.gov/Geocode/default.aspx and enter a street address to obtain a census tract number.

Are there maximum debt-to-income ratios for loans under the Maryland Mortgage Program? 

Yes. The debt-to-income ratios may not exceed: 

  • For all manually underwritten loans: 36% with exceptions up to 45% with strong compensating factors per Fannie Mae guidelines for conventional loans or the applicable guidelines for an FHA, VA or RHS insured/guaranteed loan;
  • For all automated underwritten loans, the maximum is 45%.


What are the underwriting standards for
the Maryland Mortgage Program? 

The underwriting standards for Maryland Mortgage Program loans are the standards of the applicable insurer or of the master servicer, whichever are more stringent.

What is the difference between a targeted area and a priority funding area? 

Targeted areas are federally designated areas that are considered distressed or areas in which 70% or more of the families have an income which is 80% or less of the statewide median family income. In targeted areas, purchasers using the Maryland Mortgage Program do not have to be first time homebuyers. Priority Funding Areas are areas designated by jurisdictions in conjunction with the State as areas in which growth should occur. Purchasers using the Maryland Mortgage Program may buy existing homes anywhere in the State, but new construction must be in Priority Funding Areas.

What is the processing time on a Maryland Mortgage Program loan? 

The processing time on a Maryland Mortgage Program loan should be no different than other loans processed by the lender. The Department does require a review of the file for compliance with federal requirements prior to settlement. Turnaround time for these reviews is based on volume, with a goal of 48 hours. 

How often are Maryland Mortgage Program funds available?

Maryland Mortgage Program funds are available continuously.

Is Down Payment Assistance available under the Maryland Mortgage Program?

Yes. There are several options available for downpayment and closing cost assistance: 

  • Downpayment and Settlement Expense Loan Program
  • Partner Match Programs

In addition, many downpayment assistance programs that are available locally can be used with the Maryland Mortgage Program loan. 

What are the fees paid to the lender?

The lender may earn a maximum fee of 2.25% of the loan amount if the loan is submitted and approved for purchase within 60 days of the reservation. Loans submitted after this timeframe will be paid less. The minimum fee is 0%.

Maryland HomeCredit Program

IMPORTANT NOTE

As per MMP Directive 2015-59, as of December 10, 2015, the Community Development Administration is unable to accept new applications for the Maryland HomeCredit Program.

We expect this temporary hold to be in effect for approximately 100 days. Maryland HomeCredit Program applications through December 9, 2015 will be processed and are not affected by this.

Can a borrower get a Maryland HomeCredit for an existing home?

A Maryland HomeCredit is available only with the purchase of a home, not afterward or separately.

 

How long can the Maryland HomeCredit be used?

The certificate is good for the life of the principal loan; the Maryland HomeCredit can be used every year while the principal loan is active.

I have already reserved a loan for a borrower, but it will not go to settlement until after June 1st—can a Maryland HomeCredit still be added?

The Maryland HomeCredit is for reservations on or after June 1, 2014; the closing date is not a factor.

Why is the Maryland HomeCredit not available with REO loans?

The Maryland HomeCredit is a tax credit and therefore cannot be used together with any tax exempt bond funds; The Department uses bond funds to finance the reduced rate for the REO program.  That is also the case with several of our special initiatives.

My organization is not on the list of participating Maryland HomeCredit lenders—can I still help borrowers get a Maryland HomeCredit?

It is necessary to be an approved Maryland HomeCredit lender to provide these mortgage credit certificates to borrowers.  Go the Application page to learn more about becoming an approved Maryland HomeCredit lender.

If a borrower sells their home in the future, can they use the Maryland HomeCredit for their next home?

The Maryland HomeCredit is tied to a principal loan, and cannot be transferred to another property.​​