When it comes to making the big leap from renting to owning a home, things can seem a bit overwhelming. Saving up for a down payment, securing financing, finding the right home, and getting through the purchase process… it can be a lot to handle for a first-time homebuyer.
The Maryland Mortgage Program (MMP) is sponsored by the state’s Housing Finance Agency, and aims to support Maryland first-time homebuyers with the purchase of a home. There are several components to the program that are designed to educate and assist throughout the homebuying process.
Eligibility to Participate
The primary test for eligibility to participate in the Maryland Mortgage Program is household income. In Harford County, for example, the income limit for a 1-2 person household is $104,040. For a household of three or more people, the income limit increases to $121,380. Eligible participants must have a household income below these thresholds in order to be eligible.
Once you’ve determined that you aren’t disqualified based on your income, there are a few other factors that go into figuring out whether or not you’re eligible for the program. For example, applicants must be first-time homebuyers (not having owned any real property in the past three years) and must be purchasing the property to serve as their primary residence – the Maryland Mortgage Program cannot be used to purchase an investment property.
Another big element of the Maryland Mortgage Program is geared toward educating first-time homebuyers on everything that goes into purchasing and owning a home. Program applicants must complete an approved homebuyer education course, usually offered by a local housing agency or non-profit partner in their community. The purpose of these classes is to teach prospective homeowners about the financial aspects of owning a home versus renting, prepare students for the homebuying process, and provide information about homebuying assistance programs.
In Harford County, there are some special education requirements – the course must include three hours of workshop (classroom-style) counseling and two hours of one-on-one, face-to-face counseling by either a HUD-approved counseling agency or a lender that meets the agency’s requirements and uses a mortgage insurer with an established counseling program.
Financing and Down Payment Assistance
One of the biggest benefits of the Maryland Mortgage Program is the assistance it provides to first-time homebuyers with their down payment. The MMP itself offers up to $5000 to eligible participants in three different formats depending on the applicant’s location, eligibility, and the partner organization they’re matched with. These formats include:
Zero-interest deferred loans that don’t need to be paid back until the property is transferred or sold, or the home loan is refinanced or paid in full
Forgivable loans that diminish over time as long as the owner lives in the home and continues to make payments on their primary mortgage
Cash grants that do not need to be repaid
The Maryland Mortgage Program also partners with local financial institutions to offer competitive mortgage financing, with rates that are often comparable to or even lower than primary lender mortgages. In Harford County, there are more than 50 lenders that partner with the MMP to serve eligible applicants, meaning that you’ll have the ability to shop around and find the lender that’s right for you.
Ready to learn more about what the Maryland Mortgage Program can do for you? Contact Rich & Rich today and we’ll work together with the experts at MMP to get you on the road to owning your dream home.