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Maryland First Time Home Buyer Loans

MarylandLending.com
Marylandlending.com
MarylandLending.com

Maryland First Time Home Buyer Programs

2024 Maryland First Time Home Buyer Programs & Loans

One of the most common first time home loans utilized by buyers is the FHA mortgage. An FHA mortgage is insured by HUD and are made available to help promote home ownership. This loan product is designed to promote lending by Lenders to home buyers using government insured funds for the loan. Most FHA loans only require a 3.5% down payment on purchases. There is usually an insurance premium attached to the loan. To qualify for an FHA loan the borrower(s) must meet income, credit and asset requirements that are set by HUD guidelines. There may be additional requirements set by the lending institution. Along with an FHA first mortgage there are programs that may help cover up to the 3.5% down payment and/or closing cost. 
Below are a few of the commonly used Maryland based programs:

Understanding Maryland first time home buyer loans and programs.

First Time Home Buyer Programs - Maryland

Let's take a look at the most common Maryland programs for first time buyers. 

The statewide program is called the MMP (Maryland Mortgage Program).

MMP Maryland Mortgage Program:
This program is provided through the
State of Maryland and can only be done by an approved program lender. This program is available to all regions within Maryland. It is available to first time home buyers, which may include those who have not owned a home within the previous 3 years or are relocating to the state. They maybe other variables required to qualify, Start here and see if you qualify.

(Freedmont Mortgage Group is a division of NFM, Inc. - An approved MMP lender.)

When utilizing The Maryland Mortgage Program there may be a second mortgage attached to the property. The funds from MMP may be used towards down payment and/or closing cost. The second mortgage may remained attached to the home until paid back.


  • Triggers to pay back this loan would include: sale of the house, refinance of the property, change of owner on title of the property, if the borrower no longer uses the property as a primary residence or the 30 year term is reached.


  • You should consult your lender prior to writing any offer on a property. An MMP borrower may be required to attend and complete a MMP approved first time buyer course prior to writing a contract to buy. This course will have to be done by an approved program educator.


  • Once the lender approves the first mortgage loan the completed file will be sent to the Maryland Mortgage Program to be reviewed and, if approved by the state, the funds will be sent to the approved title company to be used at settlement on the purchase. 


  • There is a possibility that additional repairs to the home may be required if they do not meet lending guidelines. With these additional steps involved when using down-payment/closing cost assistance, it is only proper to add some additional time from contract to settlement date. It is suggested to write contracts with a 60 - 90 day settlement date when using these programs vs the usual 30 - 45 days.


  • A buyer must used an approved lender, the lender will do both the first mortgage and the MMP assistance program : See if you qualify for MMP.


  • The rate on the first mortgage is set by MMP and they may vary by program options. There are typically two program options for assistance. It depends on qualifications but a grant (which may not have to be repaid) and a loan, which is a second mortgage attached to the home that will have to be paid back. As these are seconds liens to the 1st home loan (example - first mortgage covers 96.5% of the purchase price and the grant or second covers an additional 3% of the purchase as a second lien on the home) when using the grant option the rate on the first mortgage's may be higher than the rate for the loan option.

Community Development Block Grant Home Buying Program (CDBG):
This program is mostly used within Baltimore City Md for closing cost and down payment help. However, the CDBG may be available in several other specific locations within Maryland. It is a first time home buyer grant and it is made available to families with income at or below 80% of area median income. The grant may be used as down payment and/or closing cost assistance.

Depending on the jurisdiction, a course may or may not be required prior to entering into a contract to purchase a new home. This course will have to be done by an approved program educator and the buyer will receive a certificate of completion.

House Keys 4 Employees Home Buying Program:
House Keys 4 Employees, is a employer partnership deigned to assist the borrower(s) with home buying assistance.
This program availability varies depending on location and employer. In order to determine if you can utilize this program you should contact your employer's Human Resources Department to determine if the assistance is available.

BDIP Builder Developer Incentive home buying program:
BDIP was established as a 0% percent deferred payment loan through DHCD's Down Payment Assistance (DPA) Program. The builder must be a participating partner in the program in order for them to assist with down payment/closing cost help. You should contact your home builder to see if they are signed-up to participate with this program.

PG County Pathway To Purchase:
This program is only available in Prince George's County Maryland for first time home buyers
.
The
PG County MD program is a first time home buyer grant program for Prince George's County Md first time buyers. It is up to $10,000. The loan is attached as a lien to the title of the home with a minimum required residency time of 10 years. There is income and baseline credit limits and the borrower must be approved by a lender for a first mortgage. 

For a buyer to utilize this program, the lender that the buyer uses, must be certified to lend on the PTP program and the settlement company must also be approved by the PTP program. 

This assistance program does require that the approved first mortgage loan be sent to Pathway-to-Purchase for a review and approval prior to any assistance funds being dispersed for settlement. This additional "file review" should be taken into consideration when the contract of sale is written. It is a suggested that the settlement date from date of contract is at least 60 days.

100% financing programs within Maryland:
Although many of the first time buyer programs above may allow for a home buyer to purchase a home with minimum or no money out of pocket, there are several Federal programs that will finance 100% or more of the home's purchase price.

USDA 100% Maryland home buying program: (Federal program)
There are many non-metro areas throughout Maryland that are within the USDA 100% financing loan program allowable locations. A USDA loan can only be used for the primary residence and it must be owner occupied.
Although this program is run by the USDA and banks follow the lending guidelines set forth by USDA, banks and lenders may add additional underwriting guidelines. There are income, credit and reserve requirements. The USDA requires that a household income may not exceed 115% of the area's median income. Property eligibility is determined by the USDA and most eligible property are located outside major metro areas.

VA 100% Maryland home buying program: (Federal program)
There are many non-metro areas throughout Maryland that are within the USDA 100% financing loan program allowable locations. A USDA loan can only be used for the primary residence and it must be owner occupied.
Although this program is run by the USDA and banks follow the lending guidelines set forth by USDA, banks and lenders may add additional underwriting guidelines. There are income, credit and reserve requirements. The USDA requires that a household income may not exceed 115% of the area's median income. Property eligibility is determined by the USDA and most eligible property are located outside major metro areas.

Common documents needed when utilizing a home loan program.

Original pay stubs for the previous 2 month.
Copies of your W2 for the last 2 years - be sure you have them for all borrowers on the loan.
Copies of asset information - such as proof of money for closing costs (if needed), 60 days worth of statements from your savings & checking accounts. Also, the most recent (quarterly) statements on investment records for mutual funds, stocks, bonds or other liquid investments.
For more information on Maryland Mortgage programs, including requirements and restrictions, please visit mmp.maryland.gov.
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