Get Answers
As you go through the home buying process you'll have a lot of
questions. And we have the answers.
Q: Where can I find information on CDA’s new programs?
Q: Do I have to be a first-time homebuyer to get a CDA loan?
A: The answer depends on where the borrower plans to purchase.
Borrowers purchasing in Targeted Areas,
do not have to be first-time homebuyers. However, borrowers purchasing in an
area that is not designated as “Targeted” must meet the definition of a
first-time homebuyer. A “first-time homebuyer” is defined as someone who has
not owned a principal residence in the last three years.
Q: What type of home can I purchase?
A: Eligible houses include townhouses, detached or semi-detached
homes, and condominium units. Modular or manufactured homes that have the State
seal of approval for code compliance may be financed.
Q: Do I have to occupy the house that I purchase with a CDA
Loan?
A: Yes, CDA loans are available for owner-occupants only.
Q: How long does it take to get a loan with CDA?
A: CDA loans are processed and approved by approved lenders who
are given incentives to complete the loan in a timely fashion. The 45-60 day
time period normally written into the contract to purchase a home is more than
enough time to receive an approval on a CDA loan.
Q: Does the seller have to pay points on a CDA loan?
A: The payment of the points is negotiable between the buyer and
the seller.
Q: Is closing cost assistance available with a CDA loan?
Q: Are CDA loans only available in priority funding areas?
A: Only newly constructed homes are required to be in a priority
funding area, not existing homes.
Q: How do I apply for a CDA loan?
A: CDA loans are available through a statewide network of
participating lenders. To apply, contact a mortgage lender from the list of
approved lenders.
Q: Do I need to have good credit to get a CDA loan?
A: Yes, acceptable credit is required. The CDA loan is
underwritten to normal mortgage industry credit standards. A participating
lender will be able to help you analyze your credit standing.
Q: What is the CDA loan interest rate?
Q: Does the CDA loan program ever run out of money?
A: No, CDA funds are available continuously.
Q: Do I have to attend homeownership counseling?
A: Yes, CDA requires that all of our borrowers receive homebuyer
education Homebuyer Workshops. Please
note: If borrower is requesting a Downpayment and Settlement Expense Loan
Program (DSELP) and/or assistance through a Partner Match
Program loan on a property located in the City of Baltimore or
the county of Anne Arundel, Baltimore, or Harford, the borrower must meet the
applicable requirements on the Homebuyer Workshops sheet. Q: Will I have to pay recapture tax on my loan?
A: Federal law provides for a possible Recapture Tax
when some homeowners sell their home within the first nine years after
receiving a mortgage through the Community Development Administration’s (CDA)
Maryland Mortgage Program. The recapture tax applies only if you meet both of
the following conditions: (1) You sell or dispose of your home at a gain during
the first nine years after the date you closed your mortgage loan; and (2) Your
income at that time no longer allows you to qualify for this type of federal
subsidy. However, in order to remove the confusion and worry about having to
pay a recapture tax when the home is sold -- CDA agrees to reimburse any CDA homebuyer,
who settles on their home on or after July 1, 2005, the amount of any recapture
tax that the CDA homebuyer pays in connection with the sale of the home.
Revised 09/09/11
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