Purchasing your first home in Maryland is an exciting prospect, but it can also be an expensive one. You need your down payment, closing costs, and other fees associated with the house buying process. You don’t need to foot these costs all by yourself  – first time home buyer Maryland programs provide incentives, programs, and grants to help get you into a home. Some of these programs apply to the entire state, while others apply to purchases in specific areas.
What Is the State-Wide Maryland Mortgage Program?
Maryland’s Department of Housing and Community Development offers the Maryland Mortgage Program for first time home buyers. This program provides home buying help in two ways. The down payment assistance program offers three methods to help you purchase a Maryland home as a first-time buyer. You can get a zero-interest deferred loan which is only due if you sell the home, transfer the property out of your name, pay off the home or refinance your mortgage. This loan has no interest, so if you borrow $5,000 for closing costs you only pay that much when it’s due.
Another loan option from the Maryland Mortgage Program is a forgivable loan. These loans decrease over time as long as you still live in the home and you’re making payments on the mortgage. These loans are completely forgiven if you still live in the house at the end of a specified time period. If you move before the end of the forgiveness period, you pay a limited amount based on the time you spent in the home.
The Maryland Mortgage Program offers partnerships with other organizations that are willing to offer cash grants or zero-interest deferred loans for eligible home buyers through a program called the Maryland Community Partners Incentive Program. City governments, housing communities, employers and other organizations provide funding under this program. These options can be combined with the Maryland Mortgage Program or each other, allowing you to seek out multiple sources to fund your closing costs or down payment. Generally awards from partner programs range from $1,000 to $5,000.
What City and County Specific Options Are Available?
Gaithersburg, Maryland
Gaithersburg offers the Homebuyer Assistance Loan Program intended to help city residents afford a home. You can borrow up to $15,000 with a zero-interest deferred loan, which can be applied to down payments, closing costs, and other home buying expenses. You must go through a mortgage lender approved by this program to qualify and you have to complete a home buyer’s education course prior to purchase.
Baltimore, Maryland
Baltimore city offers multiple programs to encourage home ownership within the city. Two lottery programs, Buying Into Baltimore and City Living Starts Here, provide opportunities for eligible buyers to receive a $5,000 forgivable loan for properties purchased within the city limits. You participate in the fair or tour to enter into the lottery. The loan is forgiven after five years.
The Baltimore City Employee Homeownership Program provides city employees with assistance for purchasing Baltimore homes. You get a $5,000 award for closing costs or down payment assistance, Baltimore city forgives this loan after five years as long as you still live in the property. Each year the total loan amount decreases by 20 percent, so if you move out before the five year mark you pay an adjusted amount.
Another employee-related program is the Baltimore city “Live Where You Work” grant. This grant program awards up to $5,000 to employees working for companies participating in the program who are buying a house in Baltimore city. This program is intended to help employees cut down their commute times by moving closer to Baltimore city employers.
The Vacants to Value program cuts down on the number of vacant properties by rehabbing them and offering them for sale with a $10,000 down payment and closing cost incentive. This program only applies to properties completely vacant for at least one year. The city government certifies the length of vacancy to qualify the purchase.
Anne Arundel County
The Arundel Community Development Services offers a home ownership program for home buyers purchasing a property in Anne Arundel county. This program provides up to $20,000 in assistance for first time home buyers who go through the organization’s home ownership education courses. You pay back the loan if you sell or transfer the home or when you complete payments on the mortgage. However, you don’t always need to pay off this loan when you refinance the house.
Baltimore County
Baltimore County offers two forgivable loan programs if you purchase a house in this area. The first program, Settlement Expense Loan Program, is an income-restricted option providing closing cost assistance. The other program, Mortgage Assistance Loan Program, has higher income limits, but restricts eligibility to specific communities throughout the county.
Howard County
If you’re purchasing a home in Howard County, the county’s Housing Department funds a Settlement Down Payment Loan program with low-interest deferred loans. These loans help cover down payments and closing costs for first-time home buyers in the area. The interest rate of the deferred loan is set 2 points lower than the rate of the primary mortgage loan.
Montgomery County
The Housing Opportunities Commission of Montgomery County offers three programs to encourage home ownership in this county. The Revolving Closing Cost Assistance Program, also called 5 for 5, covers up to $10,000 in down payment costs for first-time homeowners who work in Montgomery County. This is a second mortgage loan, has a 5 percent interest rate and is repaid over 10 years. The House 4 Keys program provides assistance for county government employees and matches contributions from other assistance programs. Finally, the Mortgage Purchase Program adds three percent of the sales price to the mortgage amount to cover down payment and closing costs. This loan is a zero-interest deferred option that only needs repaid if you leave the house within 5 years.
2 Point Highlight
The House 4 Keys program provides assistance for county government employees and matches contributions from other assistance programs.
If you’re purchasing a home in Howard County, the county’s Housing Department funds a Settlement Down Payment Loan program with low-interest deferred loans.
