Lender FAQ

Maryland Mortgage Program Questions

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. See Information and forms/templates.

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. Initial access to Lender Online is provided to the established Administrative Contact, who then provides access to other lender staff and re-sets their passwords when necessary. A training video for reserving a loan is available with the other training resources.

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

Go to www.ffiec.gov/Geocode 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 maximum debt-to-income (DTI) ratios vary for different products; see fact sheets for specific product information. Borrowers must also meet any DTI guidelines of the master servicer and insurers.

What are the underwriting standards for the Maryland Mortgage Program?

The underwriting standards for Maryland Mortgage Program loans include the guidelines in the Compliance Manual, as well as 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 comparable to other loans processed by the lender. Turnaround time for program compliance review depends on volume, with a goal of two business days for initial review and additional review time for conditions.

How often are Maryland Mortgage Program funds available?

Maryland Mortgage Program funds are available on an ongoing basis, although certain products have limited funding.

Is Down Payment Assistance (DPA) available under the Maryland Mortgage Program?

Yes, there are a variety of loans and grants available to assist borrowers with down payment and/or closing costs. Review the training for more information and look at the fact sheets. MMP DPA is only available with an MMP first mortgage.

What are the fees paid to the lender?

The Maryland Mortgage Program allows lenders to charge normal and customary underwriting and processing fees for the first mortgage, per Directive 2016-15. This is not a percentage and does not vary according to the loan amount. We recommend that each lender identify their normal and customary fees and send that (fully broken out) to SingleFamilyHousing.DHCD@maryland.gov. If is confirms that those are fine, we will keep them on record and the lender would charge the same every time consistently.

The only fee that can be charged for DPA seconds is the recording fee.

For the Maryland HomeCredit (MCC), CDA normally charges a $450 fee for an MCC done with an MMP loan, and the lender can charge up to $350 for their processing fee on that, for a total of $800 to the borrower. For Maryland HomeCredits done without an MMP loan, the fees are higher.

With regard to other lender compensation, see Directive 2017-03.

Maryland HomeCredit (MCC) Questions

Are Maryland HomeCredits (mortgage credit certificates) available now?

New HomeCredits are not available, but homeowners who already have an existing MCC can get it re-issued when they refinance. There is a fee. The homeowner should contact SingleFamilyHousing.DHCD@maryland.gov for more information.

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.

Why is the Maryland HomeCredit not available with certain loans?

The Maryland HomeCredit is a tax credit and therefore cannot be used together with any tax exempt bond funds.

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.