ShareThisCDA/MMP Update Homebuyer Education Requirements!
Effective January 1, 2019, the Maryland Mortgage Program (MMP) standardized their education requirements for all 23 counties and Baltimore City.
The following statewide requirements will be implemented:
*Homebuyer education classes can be any class approved by HUD, Fannie Mae, Freddie Mac, or private mortgage insurers. Classes can be online or in-person, but a dated completion certificate must be issued.
*The class must be completed within 12 months prior to closing. All pre-contract restrictions have been eliminated.
*Homebuyer education completion certificates are transportable across Maryland jurisdictions; a certificate earned in one jurisdiction will qualify for purchase in another jurisdiction.
Very Important! If you are using grant funds from another source, along with the Maryland Mortgage Program (MMP) you must follow the guidelines and requirements for those programs also.
Spring Has Sprung Early!
The Real Estate market in Baltimore feels like a spring market even though we are still in February. January was just as competitive. 80% of my clients have gone up against multiple offers. I have a client that want to submit an offer on a property in Baltimore County today, and the listing agent has informed me that she has received 6 offers between yesterday and today. The seller will be reviewing offers tomorrow. I believe it will be even more competitive in the spring. The main reason the competition is so fierce is because we have low inventory of properties so the really nice ones sell quickly and usually for a little more than asking price. If you are going to compete in this market here a couple of things you need to do.
1. Get Pre-approved now. You don’t want to lose out on a property because you could not get a pre-approval letter in time to get your offer submitted.
2. Make sure you are working with a full-time agent who can get you out quickly to see a property and get your offer submitted. Sometimes a couple of hours can be the difference between you getting your offer accepted or you lose the property to another buyer.
3. Put your best foot forward first. Submit your best offer because you might not get a second opportunity at the property.
4. Don’t become attached to any property you submit an offer on because you might not win your first one.
FHA Guidelines on Student Loans Changing June 30, 2016
The FHA guidelines on student loans is changing again effective June 30, 2016. I believe this is going to have a big impact on buyer’s purchasing power. If you have student loans and have been pre-approved. I would highly recommend that you re-examine your pre-approval amount with your lender if you plan on purchasing after July 1st. FHA seems to be getting tougher on student loans which could mean that they are seeing higher default rates for buyers that have student loan debt.
Last year before September 2015, your lender could exclude student loan debt if you could show it was in forbearance or deferment for 12 months from the date of your settlement. In September 2015 FHA changed the guideline again.
The new guideline starting this month is lenders must use the GREATER of, 1% of the outstanding balance on the loan or the monthly payment reported on the borrower’s credit report OR the actual documented payment providing the payment will fully amortize the loan over its term.
Here is an example of how this will affect a buyer’s purchasing power. A buyer owes $40,000 in student loan debt. The payment base on 1% of the balance of $40,000 is $400 per month. The lender will have to add $400 to the buyer’s monthly debt when qualifying. This can have a big impact on a buyer’s purchasing power.
Federal Home Loan Bank (FHLB) is Back! $5,000 Forgivable Grant!
Federal Home Loan Bank of Atlanta first-time home buyer grant program is back! All buyers must contribute a minimum of $1,250 into buying their home, and those funds can actually be gifted as well. This grant is forgivable after 5 years. If a buyer sells the property prior to 5 years then the grant is forgiven at 20% per year. FHLB does not cap out the buyer’s debt ratio at 45% like most other grant programs. The buyer does their home buying counseling over the phone for this program. FHLB can also be combined with other first-time home buyer grant programs. All banks or lenders do not participate in this program. You can contact me for a list of mortgage companies or lenders that participate.
Maryland Grand Slam Program for Baltimore City!
Effective September 2, 2015, Maryland is offering four special incentives (hence the name Grand Slam) for borrowers who are purchasing a home in Baltimore City. The Maryland Grand Slam Program in Baltimore City is open for reservations until the allocated funds for the grants are expended. The remaining balance of these funds will be posted daily in a flashing bulletin on Lender Online.
Incentives & Highlights are Listed Below:
First Base: the interest rate is 1/4% below the regular MMP interest rate for a conventional or government loan, whichever is applicable.
Second Base: $5,000 outright grant for down payment and closing costs from the state of Maryland.
Third Base: $2,500 outright grant for down payment and closing costs from Baltimore City.
Home Plate: $450 CDA Mortgage Credit Certificate (MCC) fee waived for an MMC associated with an MMP loan under the Maryland Grand Slam.
*Property must be in Baltimore City*
*Grants under the Maryland Grand Slam cannot be combined with matching funds from CDA Partner Match Programs*
*The entire city of Baltimore is a targeted area and therefore, someone buying a home in Baltimore City does not have to be a First-Time Homebuyer; however, they cannot own real property at the time of closing*
*The income limit for a one or two member household is $108,600 and $126,700 for a three or more member household*
*A CDA-approved lender must originate the loan*
*The maximum loan amount is $417,000*
If you have any questions contact me at 410-977-7176.
New FHA Guidelines Starting September 14, 2015
Governor Larry Hogan Announces Maryland Grand Slam
$3 Million Allocated to Encourage Home Buyers in Baltimore City
ANNAPOLIS, MD – Governor Larry Hogan today announced Maryland Grand Slam, a $2 million program to build stronger communities in Baltimore through homeownership. These funds will be maximized with an additional $1 million from the City of Baltimore following today’s approval by the city’s spending board. Both state and city funds will provide grants to home buyers purchasing through the Maryland Mortgage Program, the state’s premier home loan product.
The new Maryland Grand Slam will help make homeownership more accessible by offering prospective buyers four ways to reduce the cost of buying a home, including $7,500 in down payment assistance grants. The initiative builds upon the governor’s comprehensive and ongoing efforts to help the city rebound from the civil unrest in April.
“Maryland Grand Slam will help change Maryland for the better by giving hardworking families that extra boost they need to get into the home of their dreams,” Governor Hogan said. “This initiative will revitalize neighborhoods in our state’s largest city while helping families build a lasting financial legacy for their children and their children’s children. A strong housing market is key to a strong economy. This program will help more families become homeowners and will improve our economy.”
The four benefits of Maryland Grand Slam are:
$5,000 for down payment assistance in the form of an outright grant from the state. The Hogan administration has allocated $2 million from Maryland’s rainy day fund for this initiative, a decision affirmed by the state’s Board of Public Works in June.
$2,500 for additional down payment assistance from the City of Baltimore, also in the form of a grant. Baltimore’s Board of Estimates approved the program on Wednesday.
A federal tax credit through the Maryland HomeCredit program that can save the homeowner tens of thousands of dollars over the life of the loan. In addition, Maryland is waiving its usual fee for a savings of as much as $450.
A 0.25 percent discount on the already low Maryland Mortgage Program interest rate.
“The Hogan administration is putting the power of homeownership to work to revitalize Maryland’s economy,” Maryland Department of Housing and Community Development Secretary Kenneth C. Holt said. “Working together, we can and will accomplish great things for Baltimore and for Maryland.”
For more information about Maryland Grand Slam and other Maryland Mortgage Program products, visit http://mmp.maryland.gov or contact me at 410-977-7176.
Spring Has Sprung!
Prepare Your Home Now for Warmer Days Ahead.
Take these tips into account during the spring months
- Have your air conditioning cleaned and serviced by a qualified HVAC technician.
- Clean or replace your furnace filter.
- Check for damage to your roof, clean gutters and downspouts to keep debris from accumulating. This is especially important during the spring season to keep debris from building up in gutters.
- Check and repair caulking around doors, windows and gutters that show signs of deterioration.
- Check and repair any cracked or damaged concrete or asphalt sidewalks, driveways and patios as needed.
- Check and repair any damaged deck and fence boards. Once complete, if it is wood stain and seal to protect from further damage or if it is composite clean per the manufacturers instruction.
- Clean the clothes dryer exhaust duct and space under the dryer. Remove all lint, dust, and pieces of material.
- Keep a multi-purpose fire extinguisher accessible, filled and ready for operation.
- Inspect your smoke detectors. Make sure there is one on each floor of your home. Test them monthly, and change the battery semi-annually or as needed.
- Have lawn mower cleaned sharpened and services.
- Turn on hose bibs and inspect for leaks.
National Association of Realtor Survey
Types of Homes Sold
67% residential 20% investment property 13% vacation homes
Home Buyer Demographics
Average age – 44 Average gross income – $84,500 Married couples – 65% Single females – 9% Single males 8% Own a second home – 21% First–time home buyers – 33% Multigenerational households – 24%
Primary Reason for Buying a Home – Order of Importance
Desire to own their own home Job-related relocation Home in a better area Change in family situation Need a larger home Desire to be closer to family/friends Retirement Establish a household Need a smaller home Financial security
Obstacles to Buying a Home – Order of Importance
Trouble saving for a down payment Too much debt High credit card debt Student loans Auto loans Childcare expenses Healthcare expenses Tight inventory of homes on the market
Type of Homes Purchased
Single-family home – 79% 3 bedrooms, 2 baths 1870 sq. ft. Age of home – built 1993 12 miles from previous residence
Where Homes Were Purchased
Suburbs – 50% Small town – 20% Urban – 16% Rural – 11%
Why Location Chosen – Order of Importance
Quality of neighborhood Convenient to job Affordable location Close to family and friends Convenient to shopping Quality of school district Design of neighborhood
Searching for Homes
Buyers saw 10 homes before buying Search time online/auto for 10 weeks Contacted FSBO Seller- 15% Online home search – 74% Real estate agent home recommendations – 53% Mobile apps – 34% Yard signs – 16% Open house – 12% Homes magazines – 2%
Value of Website Features – Order of Importance
Photos Detailed property information Interactive features Virtual tours Neighborhood information Comparing listing to sold homes Bio of real estate agent Videos
Mobile Devices Used when Searching for a Home
iPhone – 52% iPad – 46% Android phone – 27% Mobile app – 27% Different tablet – 10% Windows-based computer – 6% QR code – 3%
How Home Buyers Prefer Agents to Keep Them Informed – Order of Importance
Personal phone call Send property info as soon as properties are listed Email Market reports on recent listings/sales Text messages Website pages Mobile app to keep them updated on listings Newsletters Facebook/Twitter Blog pages
Real Estate Agent Use
88% purchased home using real estate agent 67% interviewed only one agent 20% interviewed two agents 12% interviewed three or more agents
How Buyers Found Agent to Work With
Referred by family/friend – 40% Used agent they worked with before – 12% Found agent online – 19%
FHA Lower Annual Mortgage Insurance Premiums Rates!
Great news for FHA buyers. Effective January 26, 2015 FHA is lowering the annual Mortgage Insurance Premiums rate from 1.35 percent to 0.85 percent. For the typical first-time homebuyer, this reduction will translate into a $900-$1,000 reduction in their annual mortgage payment. Existing homeowners who refinance into an FHA mortgage will see similar reductions to their mortgage payments as well. This action will help millions of families save billions of dollars in mortgage payments in the coming years, helping the housing market recovery.
