Some areas are targeted for low-cost mortgages


January 09, 1994

Question: How do I find organizations, preferably local ones, that provide low-cost mortgages?

Answer: There are many organizations -- public, private and nonprofit -- that provide low-cost mortgages. Some of these can also provide help through deferred-loan programs with settlement costs.

Nonprofit organizations typically lend in a particular geographic area or targeted neighborhood. In Baltimore City, for example, both St. Ambrose Housing (235-5770) and Housing Services of Baltimore (327-1200) are nonprofit housing organizations that help renters become homeowners. Both organizations try to revive neighborhoods by increasing the percentage of homeowners through the use of low-cost, below-market mortgage loans.

Neighborhood Housing Services targets neighborhoods -- currently the city neighborhoods of Patterson Park, Govans, Irvington and Coppin Heights. St. Ambrose Housing operates throughout Baltimore.

The Maryland Community Development Administration, or CDA, (514-7515) has several below-market loan and settlement cost loan programs. These programs are available throughout Maryland and include programs for first-time buyers. CDA typically works with private lenders. Talk to your neighborhood lender to see if they participate in CDA mortgages.

If you or your spouse is a veteran, you may qualify for a VA mortgage. Call the Department of Veterans Affairs (685-5454) for eligibility requirements and a list of participating private lenders.

Q: What documents do I need at settlement? How do I have to prepare for settlement?

A: The secret to a smooth real estate closing or settlement is preparation. Your title company can advise you on items you'll need, but typically a buyer will need: hazard or fire insurance for the property (the lender will require proof of this insurance to approve closing of the loan); a location survey (proof that the house purchased is located on the lot or property); and termite certificate. It is best to get the termite certificate and location survey early so that if they reveal problems, they can be dealt with before the settlement.

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