About $39 million in loans for first-time home buyers at a below-market interest rate of 10.25 percent will be made available next week, Prince George's County housing officials announced yesterday.
And for the first time, these officials hope to eliminate the long lines of applicants such announcements generate by holding a lottery to determine the 530 home buyers they expect to receive the mortgages.
County Executive Parris Glendening said the three-year-old program, which has grown each year, provides that "a far wider range of people can purchase homes in Prince George's County." Last year about 500 applicants qualified for $37 million in loans that enabled them to purchase new and existing homes in selected developments throughout the county.
Applicants do not have to be county residents.
Another new feature of this year's mortgage program will be separate loans to provide money to pay closing costs. To qualify for the 5-percent, 10-year closing cost loans, families must have incomes below $24,500 and buy houses priced less than $60,000.
Conventional 30-year fixed rate home mortgage loans are now available at about a 12 percent rate of interest. The reduced rate loans, according to county housing authority director Major F. Riddick, could save a family purchasing a $70,000 house about $90.94 in monthly payments.
The proceeds of tax-exempt bonds floated by the housing authority are used to lower the cost to lenders of making mortgages at the reduced rates.
Applications will be accepted on Sept. 25 for new home loans and on Sept. 28 for existing home mortgages. Specific information on lenders and developers involved in the program can be obtained by calling 386-5060.