State eases requirements for low-interest mortgages

August 17, 1993|By Lorraine Mirabella | Lorraine Mirabella,Staff Writer

Homebuyers with incomes of $50,300 or less now can get state-subsidized low-interest mortgage loans usually reserved for low-income buyers.

But the offer will be short-lived.

In a one-time state program announced yesterday, the Community Development Administration will make 30-year fixed-rate loans at 6.75 percent. The agency expects to offer about 350 loans of about $100,000 each.

The average interest rate on conventional 30-year loans last week was 7.12 percent plus almost 2 points, according to HSH Associates of Butler, N.J., which tracks mortgage rates.

A pool of $34.7 million is available, a blend of what remains from about a half-dozen bond issues over the past two years, said Dennis McGee, a spokesman for the agency, part of the Department of Housing and Community Development.

To stimulate home buying in the state, the agency has raised the maximum income limit for eligible buyers -- usually set at about $35,000 -- making loans available to anyone with an income of up to $50,300 regardless of family size.

The agency also has broadened the range of housing. It will make loans on homes selling for up to $127,500 in urban and suburban areas and on homes selling for up to $95,000 in rural areas, including Allegany, Caroline, Cecil, Dorchester, Garrett, Kent, Somerset, Washington, Wicomico and Worcester counties.

"This does open the program to a lot more people and a lot more properties," Mr. McGee said. "For anyone thinking about buying a house, this is a dynamite opportunity that probably will not be around for years to come."

The state has raised home purchase price limits hoping to better serve big families who need larger houses, Mr. McGee said.

Under the usual guidelines, the CDA makes loans on homes with maximum purchase prices of $70,000 to $85,000 in rural areas and $80,000 to $85,000 in suburban and urban areas, of which choices are limited, he said.

The agency intends to continue with traditional programs geared toward low-income residents, Mr. McGee said.

Anyone interested in applying for the most recent loans must have a signed sales contract, contingent upon getting CDA financing.

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