Mortgage

Maryland First Time Dwelling Consumers 2021: Applications and Grants

What you should know about buying a home in Maryland

First-time home buyers in Maryland face many of the same obstacles as buyers across the country. High prices and limited inventory can make the process seem daunting.

But consider yourself lucky. Because the Old Line State gives you easy access to a lot of support.

You can get advice and advice, as well as homebuyer training. And best of all, you may be able to get cash to cover your down payment and closing costs. How to start.

Check your eligibility to buy a home in Maryland. Start here (09/28/2021)

In this article (continue to …)

Maryland Home Buyer Summary

According to Maryland Realtors, the average sale price for homes in Old Line State was $ 380,000 in July 2021. That was an increase of $ 339,000 last year, up 12% year over year.

Such climbs can be daunting for those saving for a down payment and make them feel like they are running uphill.

If you find yourself in this position, be sure to read on about Maryland's Deposit Support Programs. Because these could help you bridge the gap between your savings account and your down payment needs.

Maryland Home Buyer Summary

Average home sale price in Maryland
$ 380,000

Minimum deposit in Maryland (3%)
$ 11,400

20% deposit in Maryland
$ 76,000

Average Maryland Credit Score1
712

Maryland Home Buyer Maximum Grant2
4% of the main mortgage as a non-repayable grant (Maryland DHCD Flex 4% grant)

Down payment amounts are based on the last available average home sale price in the state. A “minimum” down payment is assumed to be 3% less than a conventional mortgage with a minimum credit rating of 620.

If you are eligible for a VA loan (supported by the Department of Veterans Affairs) or a USDA loan (supported by the U.S. Department of Agriculture), you may not require a down payment at all.

Check your eligibility to buy a home in Maryland. Start here (09/28/2021)

Initial Loans For Home Buyers In Maryland

If this is your first time buying a Maryland home with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for personal mortgage insurance (PMI).

Of course, only a few first-time buyers have saved enough for 20 percent. But the good news is you don't need that much. By far not.

Borrowers can often move into a new home as little as 3% or even 0% with one of these low down payment mortgage programs:

Conventional 97 – From Freddie Mac or Fannie Mae. 3% down payment and at least 620 credits. You can usually stop paying mortgage insurance after a few yearsFHA loans – Supported by the Federal Housing Administration. Down 3.5% and a credit score of at least 580. But you're looking for mortgage insurance until you refinance, move, or pay off your loan on a different type of mortgageVA loan – Only for veterans and service members, reservists and the National Guard. A zero deposit is required. The minimum credit score varies by lender, but is often 620. No ongoing mortgage insurance upon completion. These are arguably the best mortgages available. So apply when you are eligibleUSDA loan – For low to middle income people who shop in designated rural areas. Zero deposit required. The creditworthiness requirements vary depending on the lender, but often 640. Low mortgage insurance ratesMaryland Mortgage Program – May include competitive interest rates and can be used with down payment assistance. More information below

Depending on the mortgage loan you choose, you may be able to get into your new home with minimal cash out of your pocket.

These programs even let you use free cash or a homebuyer utility to help cover down payment and closing costs.

If you are unsure which program to choose for your first mortgage loan, your lender can help you find the right deal based on your finances and your home purchase goals.

Find the First-Time Buyer Loan that is Best for You (Sep 28, 2021)

Programs for first-time home buyers in Maryland

The Maryland Department of Housing and Community Development (DHCD) offers the Maryland Mortgage Program (MMP), which offers first-time buyers a wide range of mortgage options.

The DHCD website explains, “The loan terms are competitive with other home loan products in the market, but what makes MMP unique is the range of related financial incentives and other support that, for many homebuyers, is the difference between being able to buy and keep going make up rent. "

It adds, “MMP Down Payment Assistance is only available with an MMP first mortgage; it is not an option in its own right. "

So you need to take out one of DHCD's mortgages for down payment assistance. And there are other conditions as well. For most programs, you'll need to:

Buy a home in the state of MarylandChoose from 80 participating lenders from the DHCD listUndergo a Training course for homebuyers in most cases have a household income at or below the local income limit owning no other property living in the house after purchase (i.e. a "primary residence")

These eligibility criteria vary for each mortgage program and you will need to search the website for the details of the program you want.

You can also seek help from a lender on the approved list. But don't commit to a lender at this point. You would like to find your best offer in the comparison shop later.

Scholarships for first time home buyers in Maryland

Maryland DHCD offers a number of deposit support programs including:

Flex 5000 – A $ 5,000 interest-free loan with no monthly payments. However, you will need to repay the original $ 5,000 when your first mortgage ends. That might happen when you sell, refinance, transfer, or finish the repayment of the mortgageFlex 3% loan – Take out 3% of your first (main) mortgage on the same terms as the Flex 5000 loanFlex 3% subsidy – Receive 3% of your mortgage loan amount in the form of a grant that never has to be paid backFlex 4% subsidy – Another grant that you cannot repay. But this time you get 4% of your main mortgage amount

Of course, everyone would opt for the Flex 4% grant if they could. So expect the selection criteria to get tougher as you go through this list.

Another program called Maryland SmartBuy can help eligible homebuyers with high student debt. His website says:

“To qualify for the Maryland SmartBuy 3.0 program, homebuyers must have an existing student debt with a minimum balance of $ 1,000. The Maryland SmartBuy 3.0 financing provides the borrower with up to 15% of the home purchase price to pay off their outstanding student debt with a maximum repayment of $ 30,000. "

SmartBuy is available through approved lenders and borrowers must meet specific eligibility criteria.

Also, keep in mind that DHCD mortgage assistance programs, including Flex Loans, Grants, and SmartBuy, are only available if you are also using the proprietary Maryland Mortgage Program.

If you don't use this loan program, check out other local DPA options. Help may be available at the county, city, or local level that works with the type of home loan you are using. Your loan officer can help you find and apply for any programs you might be eligible for.

Check your eligibility to buy a home in Maryland. Start here (09/28/2021)

Buy a home in major Maryland cities

Of the Old Line State's three most populous cities, only Baltimore saw home prices rise in the 12 months leading up to July 2021. These prices remained stable in Columbia and fell in Germantown.

Still, saving for a down payment is a challenge for almost any first time owner. So read on to find out about local programs that can help with down payment and sometimes with budget support in each of these cities.

These DPAs will most likely require that you use an approved lender and meet the eligibility criteria, just like the statewide programs do.

Baltimore First Time Home Buyers

The average list price in Baltimore in July 2021 was $ 225,000, according to Realtor.com. That was 12.5% ​​more than in the previous year.

If you want to buy a home at this average price, your down payment options can be between the following options:

$ 6,750 for 3% deposit$ 45,000 for 20% deposit

The Live Baltimore website lists several state and city down payment support programs. The most interesting seem to be those provided by the Maryland DHCD (above). But it's worth scrolling through the list to see if others might suit you better.

Three stand out:

Shopping in Baltimore – $ 5,000 as a five-year loan. So at the end of the fifth year, you don't owe anything. No household income requirements. But this is a lottery with only 20 winners a yearBaltimore City employee home ownership program – Only for full-time municipal employees. Get a $ 5,000 loan that is granted over five yearsBaybrook boost – Open only to shoppers in the Brooklyn and Curtis Bay neighborhoods. Earn $ 10,000 or $ 20,500 depending on household income. You get an interest free loan with no monthly payments. But you will have to repay it when you sell, refinance, transfer, or finish repaying your home mortgage

Clicking the Live Baltimore link may find other programs to meet your specific needs.

First time home buyer in Colombia

The average list price in Columbia in July 2021 was $ 395,000, according to Realtor.com. That remained constant year-on-year.

If you want to buy a home at this average price, your down payment options can be between the following options:

$ 11,850 for 3% deposit$ 79,000 for 20% deposit

Columbia's down payment support programs are provided by Howard County. There is no information on the amounts that can be borrowed. However, these are deferred loans that come due upon sale of the home, refinancing, or default. These loans are not interest free; You pay a low interest rate of 2 points below the primary mortgage rate.

Germantown first time home buyers

The average list price in Germantown in July 2021 was $ 370,000, according to Realtor.com. This is even down by 4.3% year-on-year.

If you want to buy a home at this average price, your down payment options can be between the following options:

$ 11,100 for 3% deposit$ 74,000 for 20% deposit

Germantown's deposit assistance programs are administered by Montgomery County. You can borrow most of it (5% of the purchase price, up to $ 10,000) through the Revolving Closing Cost Assistance Program (RCCAP). But this is a loan with 5% interest that you pay back in equal installments over 10 years in parallel with your main mortgage.

A more attractive alternative could be option 2 of the MPP program. You can only borrow up to 3% of the purchase price. However, it does so in the form of a forgivable loan that expires after five years. So after five years you don't owe anything unless you move, sell, refinance or transfer during this time.

There is a third program for employees in the county. You can find more information about this and about the other two programs on the website linked above.

Where to Find Home Buying Help in Maryland

All of the organizations listed above should provide free advice to any first-time home buyer in Maryland.

In addition to our selections, the US Department of Housing and Urban Development (HUD) offers some lists for statewide, regional, and local resources. Here is the list straight from the HUD:

State and regional programs in Maryland

Maryland homebuyer programs by city / town

Maryland homebuyer programs by counties

What are the mortgage rates in Maryland today?

Here you can see the current live mortgage rates in Maryland.

When you're ready to start buying your home, make sure you get personalized interest rate quotes from at least three mortgage lenders.

Don't just look at the advertised prices online; Indeed, apply for pre-approval and compare the interest rates and fees that are offered to you. This is the only way you can be sure that you are getting the best possible offer for your new home loan.

Confirm your new plan (September 28, 2021)

1 Source: Experian.com 2021 study on 2020 data

2Based on a review of available state DPA grants at the time of this writing

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