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Homeownership for Individuals with Disabilities Program (HIDP)

Highlights

The Homeownership for Individuals with Disabilities Program is offered through the Maryland Department of Housing and Community Development (DHCD) and is available statewide. Please call Single Family Housing at 410-514-7530 or e-mail to SingleFamilyHousing@mdhousing.org for additional information.

Eligible Borrower(s):

  • One of the borrowers is disabled OR
  • One of the borrowers has a son or daughter who is disabled
    • regardless of the age of the son or daughter;
    • who resides with one of the borrowers and is cared for principally by one of the borrowers
    OR
  • One of the borrowers is a guardian for an immediate family member who is disabled
    • An immediate family member includes a spouse, domestic partner, son, daughter, brother, sister, mother or father;
    • regardless of the age of the immediate family member;
    • who resides with one of the borrowers and is cared for principally by one of the borrowers
  • A disability is defined as a physical or mental impairment that substantially limits one or more major life activities (for example, hearing, seeing, speaking, sitting, standing, walking, concentrating, or performing manual tasks). The definition does not include a person whose disability is based solely on any drug or alcohol dependence.
  • A "Certificate of Disability" completed by a health, mental health, or disability professional is required.
  • All borrowers must meet program eligibility guidelines and the loan must conform to all underwriting criteria.
  • Must be a first-time homebuyer unless buying in a targeted area or a veteran and exercising one-time exemption to first-time homebuyer requirement (must provide copy of DD-214).

Prohibited Ownership:

Property prohibited from ownership at the time of loan closing includes:
  • Any mobile home;
  • Raw land;
  • A building lot;
  • Any principal residence - owned by borrower(s) or spouse/non-borrower;
  • A vacation home;
  • A rental property;
  • An inherited property;
  • A commercial property;
  • Any jointly held property;
  • A cooperative; and
  • Any other real property
A borrower who has an ownership interest in any prohibited property or whose present residence is deeded in the name of the spouse/non-borrower only must either:
  • provide contract of sale at time of application and provide proof property sold prior to closing HIDP loan; or
  • provide copy of deed showing borrower (or spouse/non-borrower, if applicable) divested ownership in property

Cosigners:

Not Permitted

Eligible Jurisdictions:

Available statewide.

Eligible Properties:

  • Existing or newly constructed homes.
  • Newly constructed homes must be located in Priority Funding Areas1

Maximum Lot Size:

Any land appurtenant to the residence which is not necessary to maintain the basic livability of the residence may not be financed with the proceeds of the Mortgage Loan. The lot size cannot exceed four acres, however, exceptions may be requested for properties with septic and/or zoning considerations that require additional acreage. The maximum exception will not exceed ten acres. The borrower is to request an exception listing the reason(s) why the exception should be made. The borrower’s name and address along with any pertinent documentation is to be included with their written request. These requests are to be submitted to the HIDP underwriter as soon as the borrower is aware of the situation.

Proximity Rule:

  • Occupancy implies that the home is located within reasonable proximity of the borrower’s place of employment.
  • If the borrower’s employment requires the borrower’s absence from home a substantial amount of time, the following two conditions must be met:
    • The borrower must have a history of continuous residence in the community; and
    • There must be no indication that the borrower has established, or may be required to establish, principal residence elsewhere.

Assets:

  • An Asset Test Worksheet will be completed for borrowers whose liquid assets equal or exceed 20% of the purchase price of the property.
  • A gift in the form of cash or equity is a liquid asset.
  • Computations of the Asset Test Worksheet will indicate the eligibility of the loan

Homebuyer Counseling:

  • Refer to the list of counseling agencies for one in your area.
  • A homeownership counseling certificate must be received by all buyers prior to execution of a contract of sale for a property that will be purchased under this program (contracts of sale that are executed prior to completion of homeownership counseling will not be eligible).
  • Counseling certificate may not be more than one year old at the time of closing

Home Inspection:

Required. Fire, safety and health issues must be addressed.

Interest Rate:

  • A range of 2.25% to .25% below the current Maryland Mortgage Program Conventional Interest Rate for a loan with a loan-to-value ratio at or below 95% (http://mmp.maryland.gov/Lenders/Pages/Interest-Rates.aspx) (subject to change) based on borrower qualifying at a housing expense ratio not greater than 30.0% [principal and interest payment of mortgage loan + 1/12th of the annual amount for the following: property taxes, hazard insurance and ground rent or HOA fee, if applicable divided by the gross monthly income of the borrowers] and a total debt-to-income ratio not greater than 38.0% [housing expenses plus long term debt divided by the gross monthly income of the borrowers].
  • Borrower may be required to respond to income monitoring during the term of the loan; rate may be increased after closing if Borrower's household income exceeds the Maximum Current Annual Household Income.
  • If prequalification is required, borrower will be qualified at the upper range of the interest rate.

Maximum Current Annual Household Incomes:

The total combined income of all members of the household may not exceed:
  • $107,000: Washington D.C. PMSA (Calvert, Charles, Frederick, Montgomery, and Prince George’s Counties);
  • $90,100: St. Mary’s County; and
  • $87,200: all other areas of the State.

Maximum Purchase Prices:

  • $289,470: counties of Allegany, Caroline and Dorchester;
  • $287,257: non-targeted areas of Wicomico County; and
  • $300,000: remainder of the State.

Maximum Underwriting Ratios:

  • 30.0%: the maximum housing expense to income ratio
  • 38.0%: the maximum total debt-to-income ratio
  • Exceptions to these ratios will be considered up to 32.0%/40.0% with at least two strong compensating factors.

Non-Taxable Income:

  • If a particular source of regular income is not subject to federal income taxes (for example, certain types of disability and public assistance payments, military allowances), the amount of continuing tax savings attributable to the non-taxable income will be added to the borrower’s gross income when calculating the borrower’s underwriting ratios.
  • The percentage of income that is added is the appropriate tax rate for that income amount.
  • If the borrower is not required to file a federal income tax return, the tax rate that will be used is 25 percent.

Minimum Credit Score:

In order to be eligible for a Homeownership for Individuals with Disabilities Program loan, the representative credit score (middle score of three scores or the lower score of two scores) must be 640 or above.

Credit:

  • Satisfactory credit history required.
  • Borrowers having no traditional or non-traditional credit history are not eligible
  • In the absence of a credit score on the credit report, evidence of acceptable non-traditional qualifying credit, such as a satisfactory rental history, satisfactorily paid utility (cable, telephone, electric and gas) bills, satisfactorily paid insurance (renter’s or car) bills, etc. may be considered.
  • Applicants must have established an acceptable credit rating for at least one year from the date of the release of a judgment or collection account.
  • An exception to this policy will be considered if the paid collection account or judgment was a medical account with a nominal balance and applicant has a reasonable explanation why the account was delinquent.

Waiting periods for Bankruptcies, Foreclosures and Deeds-in-Lieu of Foreclosure:

Derogatory Event Waiting Period Requirements Waiting Period with Extenuating Circumstances
Bankruptcy – Chapter 7 or 11 4 years 2years
Bankruptcy – Chapter 13 2 years from discharge date; or

4 years from dismissal date
2 years from discharge date

2 years from dismissal date
Multiple Bankruptcy Filings 5 years if more than one filing within the past 7 years 3 years from the most recent discharge or dismissal date
Foreclosure 7 years 3 years

Additional requirements after 3 years up to 7 years:

90% maximum CLTV ratio
Deed-in-Lieu of Foreclosure or Preforeclosure Sale 7 years 2 years – 90% maximum CLTV ratio

Term:

30 years

Processing Fee:

$1,000.00 (may be financed).

Minimum Cash Contribution:

$500.00 (entire amount can be gifted).

Mortgage Insurance/Guarantee:

Not required.

Revised 06/06/14

 

1 A Priority Funding Area (PFA) is an older community or locally-designated growth area where State and local governments already have a significant financial investment in the existing infrastructure and want to target their efforts to conserve natural resources and farmland while encouraging and supporting sensible economic and residential growth. Municipalities, Baltimore City and areas inside the Baltimore and Washington beltways are PFA's. For new construction, it must be confirmed that the property is located in a PriorityFunding Area by using the Interactive Online Maps on DHCD website or by e-mailing abutler@mdp.state.md.us.

For More Information:

  • Email Single Family Housing (SingleFamilyHousing@dhcd.state.md.us) or Contact:
  • Single Family Housing
  • Community Development Administration
  • Maryland Department of Housing and Community Development
  • 100 Community Place
  • Crownsville, MD 21032-2023
  • 410-514-7530
  • Toll Free (Maryland Only): 800-638-7781
  • Fax: 410-987-4136

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