First-Time Home Buyers in Maryland and DC
There are a number of programs to help Maryland and DC first-time home buyers. Below are some first-time home buyer programs that allow you to buy a home with a low down payment. Many first-time home buyers programs allow more debt than "conventional" loans making your dream of homeownership possible. This list is by no means comprehensive -- consult your personal lender for more details and more programs - the programs and the rules change constantly!
Tax Credit Update
Many Americans already know that the Federal Government authorized an $8,000 tax credit for first-time homebuyers to stimulate the housing market. The guidelines stated that the homebuyer had to close the transaction between January 1, 2009 and December 1, 2009. This was open to first-time homebuyers only.
The Federal Government has updated and extended the deadline for the Federal Tax Credit for the housing market. The updates are as follows:
* First-time homebuyers will now have until September 30, 2010 (as long as the contract was ratified by April 30, 2010);
* The maximum amount is $8,000, or 10% of the sales price up to $8,000;
* The $8,000 will include the purchase of single family homes, condominiums and cooperatives (investment properties will be excluded);
* The purchaser must reside and use the home as a primary residence for 36 consecutive months, or the tax credit must be repaid to the Federal Government;
* Individuals earning as much as $125,000 a year will be eligible;
* Couples earning as much as $225,000 a year will be eligible;
* Anyone taking the credit from a home purchased in 2010 would be able to take the credit in 2009 tax returns;
* Current home owners will be eligible for a $6,500 tax credit as long as you have resided in your current home for at least five years.
The homebuyer credit will not be extended beyond April 30, said the measure's sponsor, Republican Senator Johnny Isakson. So consult your tax consultant for more details, talk with your lender, and contact me TODAY to get out there and find your new home before the deadline...the phrase "the time to buy is now" is definitely a real statement today!
Private and Traditional Programs
- American Home Partners - American Home Partners is a proven construction loan program that enables hard working families to get into a new home without a big down payment or perfect credit. American Home Partners will finance up to 95% for the purchase of the land and 100% of the cost of materials, labor and related items to build a new home. All of Maryland is eligible for this program.
80/20 - The home buyer takes out two loans -- the first for 80 percent of the purchase price, and the second for 20 percent of the home's price. The borrower is expected to come up with the closing costs.
- Let FHA loans help you - Often the best choice in first time home buyer programs. Federal mortgage insurance to finance homeownership and the constructionof housing.
AmeriDream Downpayment Assistance Program - AmeriDream, is a charitable organization that creates opportunities for qualified low- to moderate-income individuals and families to purchase affordable homes, improve their financial lives, begin a family legacy, and strengthen their communities. AmeriDream provides a wide range of programs to benefit the individuals and families it serves, including homebuyer education, foreclosure prevention, building affordable homes, and providing financial support through privately-funded down payment gift assistance.
On 10/1/2008, "Main Street" Americans lost the ability to become homeowners with the help of downpayment assistance! This impacts more than 250,000 homebuyers annually. Take action today! Tell Congress to fix housing! Pass HR 600!
- Homeownership Vouchers - If you are a participant in the Housing Choice Voucher program and receive rental assistance, you may be eligible to received monthly assistance in meeting homeownership expenses.
- Homes For Sale by the US Government - The HomeSales.gov web site provides current information about foreclosed federally-insured single-family homes for sale by the U.S. Federal Government. These previously owned homes are for sale by public auction or other methods depending on the property, and are sold "as is" in their current condition. Anyone can buy a home for sale by the U.S. Government, but you must work with a real estate agent, broker or servicing representative to submit an offer or bid. Currently, the U.S. Departments of Housing and Urban Development (HUD), Agriculture (USDA/Rural Development), and Veterans Affairs (VA) have homes listed on this site.
- Officer Next Door - The Officer Next Door program makes homeownership faster and more affordable for Law Enforcement Officers. The selected bidder may purchase the property at a 50 percent discount from the list price.
- Section 203(k) Rehabilitation Program - The Section 203(k) program is the Department's primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities.
- Teacher Next Door - The Teacher Next Door program encourages teachers to buy homes in low- and moderate-income neighborhoods by offering a 50 percent discount from the list price.
First-time Homebuyers in DC: Welcome Home! Check out this DC Homebuyers Guide...
- DC First-Time Homebuyer's Tax Credit - $5,000 federal income tax credit is available to first time homebuyers in the District of Columbia.
- DC Employer Assisted Housing Program - The DC Employer Assisted Housing program provides grants and deferred loans up to $11,500 to employees of the District of Columbia government who are first-time homebuyers in Washington, DC.
- DC Individual Development Account (IDA) Program; MANNA, Inc. - This program fosters saving toward the down payment on a home and assists participants to improve their credit, while learning how to be successful homeowners.
- DC Individual Development Account (IDA); Marshall Heights Community Development Organization - Through the IDA program, individuals open an IDA account at a specified local bank with an initial deposit of $400. IDA participants then develop a monthly savings plan to reach a savings goal. MHCDO matches $2 for every $1 saved by the IDA participant.
- DC Housing Purchase Assistance Program (HPAP) - HPAP provides interest-free or low-interest loans for down payments, closing costs, or other expenses associated with buying a house, a condominium or a cooperative in the District. Amount of loan is adjusted to reduce the total monthly mortgage payment to 28% of household's monthly gross income. For very low income families, repayment of loans is deferred until house is sold.
- DC Single-Family Mortgage Revenue Bonds - The DC Housing Finance Agency (HFA) finances below-market rate loans to low- and moderate-income residents using proceeds from the sale of Single Family Mortgage Revenue Bonds.
- DC Scattered Site Program - The Scattered Sites Projects' mission is two-pronged: to invigorate neighborhoods and communities in the District of Columbia by renovating abandoned houses, and to provide affordable opportunities by marketing these renovations to low- and moderate-income families, especially first-time homebuyers.
- DC Metropolitan Police Housing Assistance Program (MPHPAP) - The program matches down payment funds up to $1,500 (program provides $500 for each $2,500 saved by an employee). The program includes deferred payment loans up to $10,000, ability to keep assigned patrol car during off-duty hours, an income tax credit of $2,000 per year for five years and a sliding-scale, five year property tax credit.
More up-to-date information can be found on the DC Housing Finance Agency site. The Agency provides free homebuyer education workshops; credit and budget counseling referral assistance; and affordable mortgages. Through its Home Resource Center, DCHFA can take individuals through the entire homeownership process, from learning how to buy a home to obtaining a mortgage loan.
The MAR Maryland First Time Homebuyers Affordability Index (MDHAI) is a monthly indicator of the affordability of a starter home for a typical first time Maryland homebuyer. Click on that link for more information.
- Annapolis MPDU Program ? This program offers units at below-market pricing to pre-qualified, eligible households. For residents of the City of Annapolis only.
- Baltimore City Lead Abatement Action Project (LAAP) provides money to property owners to renovate residential or rental properties in Baltimore City to make these units lead safe. The program is specifically interested in creating lead-safe housing opportunities for low-income families with young children.
- CDA More House 4 Less Mortgage Programprovides low-interest mortgage loans to eligible homebuyers with low- to moderate-income households through private lending institutions throughout Maryland. The Program began in 1980 and is targeted primarily to first-time homebuyers.
- Down Payment & Settlement Expense Loan Program (DSELP), MD Dept. of Housing and Community Development (DHCD).The Down Payment and Settlement Expense Loan Program (DSELP) is a program that offers $5,000 for downpayment or closing cost assistance in conjunction with CDA loans.
- Energy Efficient Mortgage - Energy Efficient Mortgage is a program that considers the savings on monthly utilitiy bills when determining how large a mortgage the household can afford with energy efficient improvements. The program provides mortgage insurance for a person to purchase or refinance a principal residence and incorporate the costs of the energy efficient improvements into the mortgage. The loan is funded by a participating FHA-approved lending institution. FHA does not provide loans. There are no restrictions for location. All of Maryland is eligible for this program.
- Ground Rent Redemption Loan Program - Created by the Maryland General Assembly in 2007, this program provides loans to homeowners to buy out (redeem) ground leases. A "ground lease" is a lease for a term of years (usually 99 years) that is renewable forever and is subject to the periodic payment of "ground rent" by the leasehold tenant to the ground lease holder. Ground rents are most prevalent in Baltimore City but are held in some other counties as well. The program cannot provide grants for this purpose.
- Heritage Structure Rehabilitation Tax Credit - A credit of up to $3 million may be allowed for substantial expenditures incurred in a 24-month period to rehabilitate a certified heritage structure located in Maryland. The credit is available for owner-occupied residential property, as well as income-producing property. Most forms of state or local government resources cannot be used to finance a rehabilitation project.
- The State of Maryland has developed the Homeowners' Property Tax Credit Program, which allows credits against the homeowner's property tax bill if the property taxes exceed a fixed percentage of the person's gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income.
- Key Choices Lease Purchase Homeownership Program, offered by theHousing Commission of Anne Arundel County, is a program targeted to assist families who have experienced credit difficulties or who have never established a credit history. Qualified participants select a home of their choice in Anne Arundel County. The Housing Commission (HCAAC) buys the house and leases it to the participant for 24-36 months. During the lease period, the participant attends homebuyer classes and must raise their credit score to a minimum of 620.Available only in Anne Arundel County.
- More House 4 Less is a low-interest, fixed-rate mortgage financing program available though certified lenders with 30, 35 or 40-year terms for first-time homebuyers or buyers who have not owned in MD for 3 years. Closing cost and downpayment assistance is available with all state single-family mortgage products. Available all over the state, but different limits for incomes and maximum loans are applicable in different locations.All of Baltimore City is considered a targeted area; the following jurisdictions have portions targeted:
Plus census tracts: 401602, 421300, 450504, 450800, 490605, 491401
Brentwood Mt. Rainier
Capitol Heights North Brentwood
Colmar Manor Seat Pleasant
Fairmont HeightsPlus census tracts: 803200, 803401, 803509, 804300, 04800, 805601, 805602
- The Mortgage Assistance Program (MAP) - Anne Arundel is a fund used to increase homeownership opportunities for low to moderate income families in Anne Arundel County and the City of Annapolis.
- Neighborhood Advantage for Maryland First Time Home Buyers Programs - 100% Financing. Requires good credit and has some income restrictions but great flexibility. Targeted towards low-income borrowers.
- State Owned Homes for Sale - The Department of Housing and Community Development, State of Maryland has State Owned homes for sale throughout the State of Maryland. These homes may be purchased by Homebuyers (Owner/Occupant), Investors, or Non-Profit Organizations.
Workforce Housing Initiative - Anne Arundel is a fund to assist employees to buy a home in Anne Arundel County. Any full-time County or Board of Education employee that is a first-time homebuyer is eligible for up to $20,000 to offset downpayment and closing costs. This program is open only to Anne Arundel County and City of Annapolis residents.
Some states offer grants to first-time home buyers. Unfortunately,the state of Maryland does not currently offer first time home buyer grants, but only provides reduced interest loans. There are, however, local grant programs as well as Federal programs. Please visit Maryland First Time Home Buyer Grants for more information.
Other Federal Programs
- U.S. Department of Veterans Affairs Loan Guaranty Program - A veteran's basic entitlement is $36,000. For loans in excess of $144,000 to purchase or construct a home, additional entitlement up to an amount equal to 25 percent of the Freddie Mac conforming loan limit for a single family home may be available. This loan limit can change yearly. The conforming loan limit for 2008 is $417,000 ($625,500 for Hawaii, Alaska, Guam and U.S. Virgin Islands). This means that qualified veterans could get a no down payment purchase loan for those amounts.
Owning your own home is the American Dream. And that dream is more alive today than ever before. Yet one of the first realizations a prospective home buyer often comes to is that the "dream home" does not always seem affordable.
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Inside of this guide you will find topics on:
- How Much House Can You Afford?
Planning - How Much House Can You Afford?
Shopping - What to Look For
Offer to Buy - Negotiating the Purchase
Money - Locating the Right Loan
Protection - Inspecting Your Investment
Closing - The Big Day!
Financing - Different Mortgage Strategies
Glossary - Words to the Wise
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