Newest CDA Programs!

For June Homeownership Month:

• The Save-A-Home Loan Program (formerly the Homeward Bound Program) is offering reduced interest rates for short sales and non-DHCD-owned foreclosures for reservations made on or after 10:00 a.m. on May 31, 2012 through June 30, 2012.

In Non-Targeted Areas:
o The interest rate will be .75% below the regular Maryland Mortgage Program (MMP) non-targeted interest rate, with a floor of 3.25% (APR 4.082%).

In Targeted Areas:
o The interest rate will be 2.875% (APR 3.675%).

• $30 Million Targeted Areas Initiative:

o Interest rate of 2.875% (APR 3.675%)
o Effective for loans reserved on or after 10:00 a.m. on May 31, 2012 and continuing until the allocated funds have been expended.
o Additional incentives and resources offered by the following partners can be combined with MMP loans and benefits to maximize savings for homebuyers in Baltimore City. The partnership of State and City allows for the best homeownership initiative and lowest interest rates in the history of the Maryland Mortgage Program (MMP).
>> Baltimore City Housing Authority has a Vacants-to-Value initiative, which can include significant downpayment assistance. Click here to go to the Baltimore City website for more information.
Healthy Neighborhoods, Inc. (HNI) helps strong but undervalued neighborhoods increase home values, market their communities, create high standards for property improvement and build strong connections among neighbors. HNI offers two major home buying programs.
>> The Healthy Neighborhoods Loan Program offers low-interest loans to acquire/rehab, refinance/rehab, or make home improvements to residential property. Incentives include a 3% down payment, loan amounts up to 110% of after-rehab value, no private mortgage insurance, and free design advice.
>> The Neighborhood Stabilization Program offers:

1) $6,000 in closing cost assistance when purchasing a home that is fully renovated by an approved developer partners; and
2) $25,000 to purchase a foreclosed, abandoned or short-sale property in a targeted neighborhood.

More information on Healthy Neighborhoods, Inc., can be found on www.healthyneighborhoods.org.
Live Baltimore is the most comprehensive organization focused on Baltimore City Living. It aims to market the City of Baltimore as a great place to live and grow the city's population. Live Baltimore offers numerous education and marketing outreach to the public and details can be found on the organization’s website, www.livebaltimore.com .

You do not need to be a first-time homebuyer to purchase in Targeted Areas.
DON’T FORGET OUR DOWNPAYMENT AND SETTLEMENT EXPENSE PROGRAM! For more information, contact us. Partner Match Programs can qualify for these incentives, too!

Spring Housing Market Update for Baltimore Metropolitan Area

Written by Stuart Epstein

It’s hard to believe that we are into May already!  I will say that I am happy to report that the first four months of 2012 have been one of the busiest that we have seen in a long time in the Baltimore area home buying market.  We are up by 9% over 2011 for purchase mortgages, and an average purchase price of $200,000, compared to $187,000 for the same period last year.  Many people are starting to realize that home prices may have hit their low point and interest rates could not be more attractive than right now.  For example, the average rate on an FHA 30-year fixed rate loan right now is 3.5% and a Conventional 30-year fixed at 3.875%.  Our refinances have more than doubled for the first four months of 2012 over 2011!  This is mainly due to rates being at an all time low.  Many are reducing the term from 30 years down to 15.

The majority of the new applications are 1st time homebuyers, who happen to be in the best position right now, given they have no house to sell as a contingency for buying.  They also have the benefit of receiving 1st time homebuyer grants and incentives, such as the CDA loan with DSELP (Maryland Mortgage Program) and the FHLB grant. 

We are also seeing more “step-up” buyers, those who are selling their current home and upgrading to a larger or superior home.  Since inventories of sought after homes on the market seem to be shrinking, some sellers are finding it easier to get contracts on their houses in a couple months.   Some areas are actually experiencing bidding wars again.

The mortgage qualifying and documentation standards have continued to get more and more restrictive, which can make for a stressful process when applying and taking out a loan these days. The good news is that qualified borrowers can still get a loan, and at historically low rates.  It just may be a bit more painful getting to settlement. 

I may sound like a broken record, but the key is having a good, reputable, local lender working for you to make the transaction as smooth as possible. 

If you own a home and have not refinanced in the last year, make sure you check with your lender to see if it makes sense for you to refinance.  There are several programs available to help: the FHA Streamline Refinance, the VA IRRRL Refinance and the Fannie Mae DU Refi Plus programs all have flexible guidelines to help those who may not have the equity normally required to get a lower rate.  If you are not sure if it makes sense for you to refinance, or if you are not sure if you can, don’t hesitate to call (410.491.0200) or email us to do a free analysis.

Enjoy the beautiful spring weather!

Carrollton Bank Has Merged With Bay Bank

Big news came out yesterday! Carrollton Bank has come into a merger agreement with Bay Bank. This will make us one of the most well capitalized community banks around. We are very excited about this change here at Carrollton. It will enable us to increase our presence and provide even better programs and services to our clients.

If you would like more information about the merger, you can view the press release here.

New FHA Changes Effective April 9th, 2012 – Is it a Game Changer?

Have you heard that there are changes coming on FHA mortgages, but unsure how they will affect you or your clients?  Here is a simple breakdown of the changes:

Up-front Premium – 30 year mortgage

• Existing Up-Front MI premium (financed into the loan)  - 1% of loan amount
• New Up-Front MI Premium effective April 9th  - 1.75% of loan amount

Monthly MI – 30 year mortgage

• Existing Monthly MI rate      - 1.15% assessed annually
• New Monthly MI rate effective April 9th    - 1.25% assessed annually

What does this mean?  Let’s use an example to demonstrate the new FHA change:
On a $200,000 home purchase, under the existing structure, the payment (excluding property tax and insurance) on a 30 year fixed rate loan with an interest rate of 3.75% would be $1088/month.  Under the new plan effective April 9th, the payment will go to $1110/month. 
So on a $200,000 purchase; it will cost you $22 more a month for an FHA mortgage AFTER April 9th. 
The good news is the required down payment will still be the same.  In this example, that would be $7000 required down.  Don’t forget that if you are a 1st time homebuyer, you may qualify for help with down payment, like the FHLB or the Maryland Mortgage Program, just to name a couple.
There are different FHA mortgage insurance rates when the down payment is greater than 5%, and also for 15 year mortgages.  If you would like a breakdown of these rates and how they may affect financing, don’t hesitate to ask the Stuart Epstein team to provide you with the numbers.
Also, if you have 5% to put down, you may want to ask us to help you compare the costs and benefits of Conventional financing as an alternative to FHA.  Depending on credit and other factors, you may save a ton on money by knowing ALL of your options!
Lastly, stay tuned for exciting refinancing benefits coming in June for those with existing FHA mortgages…
Happy House Hunting!

Please contact the Stuart Epstein team if you have any questions! Call us 410.491.0200 or email me directly at sepstein@carrolltonbank.com.