Closing Cost Loans

What is Closing Cost Loans?

Closing Cost Loans is a deferred second loan for homebuyers in Salisbury, Maryland.

• Salisbury NHS amortizing second-mortgage closing-cost loan: up to $15,000, term up to 10 years (5 years if <=$5K), rate 2% below first mortgage. NO income limit within Salisbury city; 120% AMI elsewhere in Wicomico/Worcester/Somerset. Owner-occupied. Pairs with MMP, USDA, FHA, VA, conventional.
• Closing-cost / down-payment assistance LOAN (amortizing repayable second mortgage) up to $15,000 from Salisbury Neighborhood Housing Services (SNHS) for buyers in Wicomico County (with expanded coverage to Worcester and Somerset counties under SNHS's regional service area). Loan terms: maximum 10 years (5 years if loan amount is $5,000 or less). Interest rate set 2% BELOW the buyer's first-mortgage rate (e.g., if first mortgage is 7%, SNHS second is ~5%). Property must be owner-occupied. Within Salisbury city limits there is NO income restriction.
• outside Salisbury but in Wicomico County, income limit is 120% area median income. SNHS is a NeighborWorks-affiliated CDFI. Funds typically used for closing costs and minor down payment supplement.
• pairs with Maryland Mortgage Program (MMP) first mortgages, USDA Rural Development, and conventional first mortgages.
• Funding comes from CDFI, NeighborWorks, State, and Local Government.

Do you have to pay it back?

Closing Cost Loans is deferred, so no payments are due until the home is sold, refinanced, or the first mortgage is paid off.

• Repayment is triggered by Amortizing second mortgage with monthly payment over up to 10-year term (5 years if <=$5,000). NOT forgivable - principal and interest fully amortize over the term.
• The assistance is recorded in 2 position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Closing Cost Loans is open to buyers who will live in the home as their primary residence.

What are the income limits?

Closing Cost Loans limits household income to 120% of the area median income, which varies by county and household size.

• WITHIN Salisbury city limits: NO income restriction. OUTSIDE Salisbury but in Wicomico County (and SNHS-served Worcester/Somerset): household income at or below 120% area median income. Per LendSquawk seed: $71,400 (1-person) to $163,800 (8-person) reflects 120% AMI scaled by household size.
• The limit applies to total household income, not only the borrower&rsquo;s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Closing Cost Loans caps the purchase price as follows: Per first-mortgage limits.

• Eligible property types include Single-family detached, Townhome, Rowhouse, and Condominium.
• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

Closing Cost Loans serves buyers purchasing in Salisbury, Maryland.

• The program targets specific areas: Salisbury NHS service area: Wicomico County (primary), Worcester County, Somerset County. Within Salisbury city limits: no income limit. Outside Salisbury: 120% AMI cap.

How do you apply?

Applications for Closing Cost Loans go through the administering agency, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through Salisbury Neighborhood Housing Services (HUD-approved housing counseling agency) - pre-purchase counseling required..

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through Apply directly through SNHS. SNHS originates the second mortgage; coordinates with buyer's first-mortgage lender at closing., and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.