Government isn't known for being at top of the responsiveness curve. But the Schaefer administration has hit the mark by relaxing income and price margins on the well-known but lately underutilized Maryland Mortgage Program to accelerate housing demand from first-time homebuyers.
Under the temporary adjustments, individuals or families making $47,100 can qualify for 8 percent mortgages on homes up to $124,875. The income cut-off was previously $32,000 for single purchasers and $40,000 for families. These well-timed changes coincide with a relative surge in demand from new homebuyers taking advantage of the lowest mortgage rates in 20 years. In the last quarter of 1991, new home sales in the region jumped 14 percent -- suggesting a modest rebound in the local market. The price of a median-priced home -- a barometer of trends and demand -- rose 10.8 percent to $113,000. Nationally, median home prices dipped from $101,900 to 99,000.
By raising the income ceiling for both families and individuals, the state has made MMP an option for middle-income people. Depending on who insures the loan, a purchaser could end up with an 8 percent fully-financed mortgage, paying only for the closing costs. The state has also raised the loan limit from $60,000 to $127,500 in its loan insurance program for buyers in depressed areas.