MORTGAGE INFORMATION FOR BUYING REAL ESTATE IN
MONTGOMERY COUNTY, MARYLAND

MORTGAGE PROGRAMS SPECIFICALLY FOR MONTGOMERY COUNTY HOME BUYERS

For Low and Moderate Income Montgomery County Home Buyers

MDPU - Moderately Priced Dwelling Unit Program
Since 1974, the MDPU Program in Montgomery County has be used to help home buyers realize their home ownership dream by providing for lower than market interest rates for qualifying Montgomery County home buyers.

NEW CONSTRUCTION
Between 12% and 15% of homes in new subdivisions of 20 or more units must be moderately priced and reserved for qualifying Montgomery County home buyers (minimum income required is $20,000). Purchasers must complete the application and qualify under the Montgomery County
Department of Housing and Community Affairs (DHCA) meeting program guidelines for annual household income, family size and family composition. Once the qualifying applicant meets the program requirements they receive a Certificate of Eligibility permitting them to buy one of the
designated homes in new developments.

So many loan instruments are available for home buyers in Montgomery County today. A sampling is below. Conventional loans with rates fixed for 30 years, 10 years, 7 years, 5 years, 3 years, 1 year and several combinations of fixed and Adjustable Rate Mortgages (ARMs). Terms may be for 10 years, 15 years or 30 years or 40 years, with the amortization of 30 years the most popular.

Real estate in Montgomery County is costly. So, it's very important that you get the very best terms and conditions with the loan you use to finance your newly purchased home. We believe that home buyers should have information about the mortgage process so they understand the procedures
and costs. You're going to be spending $Thousands of $Dollars and deserve to know the details of what the money is for and where it goes.

CONVENTIONAL MORTGAGE LOANS IN MONTGOMERY COUNTY
By far the most popular loan type to buy a home in Montgomery County is the Conventional loan. These loans generally follow the Fannie Mae guidelines. Many of the Fanny Mae guidelines are designed to protect home buyers. However, many of the guidelines that lenders follow are designed
to protect lenders. The guidelines require that buyers be credit worthy to reduce the likelihood of default.

Borrowers using Conventional loans may have as little as 5% down. Borrowers may devote up to 28% of their gross monthly income for housing. However, if the buyer has less than 20% down, they will be
require to protect the lender by buying mortgage insurance. Payments for the mortgage insurance may be made up-front at settlement, approx. 1.25% of the loan amount. Payment for the mortgage insurance may also be made by raising the interest rate an paying in monthly installments. Or, buyers may use a combination of both. Buyers with 20% or more down are not required to insure their loan. In case of default, the buyer with 20% down will have sufficient equity to protect the lender. [CONTACT US] for the loan limits for Conforming Conventional loan limits.

GOVERNMENT INSURED MORTGAGE LOANS IN MONTGOMERY COUNTY
Federal Housing Administration insured loans (FHA). Home buyers in price ranges that qualify for FHA loans will benefit from the lower down payment offered by the FHA insured loan when compared with
the Conventional loan. Also, the qualifying ratios of the FHA loans are higher than Conventional loans. FHA permits borrowers to devote approximately 30% of their gross monthly income for housing. This loan is very popular for first time home buyers. Anyone can use the FHA loans, but a borrowers may have only one FHA loan at a time. [CONTACT US] for FHA loan limits for Montgomery County. These limits change from time to time.

VETERAN ADMINISTRATION GUARANTEED LOANS
These loans are guaranteed by the Department of Veterans Affairs. Only active duty and military veterans can use this loan. This loan requires no down payment if the purchase price is at or below the maximum loan amount permitted. [CONTACT US] for VA loan limits. VA loans permit borrowers to devote approximately 30-35% of their gross monthly income to housing. These loan limits change from time to time.

JUMBO CONVENTIONAL LOANS
These loans conform to the Fannie Mae guidelines for eligibility, meaning that, on average, the buyers may devote up to 28% of their before tax income to housing. These loans generally require a down payment of at least 5%. In exchange for a slightly higher interest rate, the lender will lend you money with no down payment and will even pay your closing costs. The higher interest rates are deductible and are often a good buy for folks with good income, good credit and little cash. CONTACT US for more information about Jumbo or Super Jumbo loans.

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