First Time Home Buyer And Down Payment Assistance Programs In Maryland — An Update

This article is an update of a previous article.
Qualified first time home buyers and other eligible homebuyers can purchase a home using several programs from The Maryland Department of Housing and Community Development (MDHCD) and the Community Development Administration (CDA). Programs include mortgage loans and down payment assistance. These state agencies work together to deliver fixed rate mortgage products with low mortgage rates to individuals and families who want to buy a home in Maryland. Homebuyers will need to qualify for CDA mortgage programs through participating lenders.

As A First Time Home Buyer Use The Maryland Mortgage Program

The CDA offers fixed rate full principal and interest payment loans as well as interest only mortgage loans. CDA offers first mortgage loans for 30 year terms. Eligible homebuyers include first time home buyers in all areas of Maryland or second time homebuyers who are purchasing a home in a Targeted Area. Homebuyers must meet certain income, purchase price and asset limits to be eligible for a CDA Maryland Mortgage Program.

All homebuyers using the CDA Maryland Mortgage Program must attend a home buyer education workshop. In some cases, those homebuyers trying to use the Down payment and Settlement Expense Loan Program or a Partner Match program may have to take extra homebuyer counseling and education requirements depending on where they purchasing a home. Some of these jurisdictions which require extra homebuyer counseling include: Anne Arundel County (excluding the City of Annapolis), Baltimore City, Baltimore County, and Harford County.

What Is A Targeted Area In Maryland?

Targeted areas are those areas deemed by HUD and the State of Maryland as areas that are in need of special community and economic development programs. Targeted areas have expanded income and purchase price guidelines to allow a wider range of qualified buyers to purchase homes in these areas.

Does Maryland Have Down Payment and Closing Cost Assistance Programs?
The State of Maryland has a down payment assistance program available for qualified homebuyers. This program is focused at serving low to moderate income first time home buyers in any area of Maryland. However, non first time home buyers can use this program to purchase homes in Targeted Areas.

Downpayment and Settlement Expense Loan Program – DSELP. This program provides a zero interest, no payment, and deferred loans for up to $3,500 for eligible homebuyers who are approved for a loan through CDA first mortgage. This loan remains as a second mortgage lien on the home and repayable when the homebuyer pays off the CDA first mortgage by selling their home or by refinancing. Homebuyer education workshops are required.

Additional Loan Programs From The CDA For Maryland Homebuyers

House Keys 4 Employees – Many states have this type of loan program which provides homebuyers who work for an employer who has elected to offer homeownership programs to its employees. In this program, the employer contributes to the homebuyer’s – the employee’s – pool of money to be used for down payment and closing costs. The CDA matches the employer’s contribution. This program can be used in conjunction with CDA’s down payment program.

Smart Keys 4 Employees – this program offers an even greater downpayment and closing cost incentive if the employee from a participating employer purchases a home located in a Priority Funding Area and if the home is located within 10 miles of the homebuyer’s place of employment or within the boundaries of the local jurisdiction. This program can also be used in conjunction with the down payment program offered by the CDA.

Homeownership For Individuals With Disabilities Program – This program is available throughout the State of Maryland. Eligible homebuyers must have a disability, or have a child who is not over the age of 18 and living in the home with the homebuyer. Homebuyers using this program will have to attend and complete a homeownership counseling program. The mortgage interest rate for this program is extremely competitive with rates between 3-5%. Household income and purchase price limits do apply to homebuyers using this program depending the location of the home being purchased.