Is the Maryland Mortgage Program Right for Me?
Buying a home is a big deal. For Marylanders just like you, it may be the single largest purchase you make, and will impact your family’s life for years to come.
For many people, becoming a homeowner can mean stability, greater control over how you live, and the potential for building wealth and equity for your family’s future.
You may have heard about the Maryland Mortgage Program (MMP) from a friend or a neighbor, from an ad you saw on a fast-moving bus or from a flyer you picked up at an event, and now you’re wondering if this program can help you move into a home of your own.
Coming up with the money for a down payment and other upfront costs is often the largest hurdle facing first-time homebuyers. Even with certain mortgages that require low down payments, these expenses will still usually total several thousand dollars.
The Maryland Mortgage Program provides help in the form of Down Payment Assistance, as well as a range of Partner Match programs from employers, developers and community organizations that can help you cover these down payment and closing costs. These programs may make it possible for first-time homebuyers to afford a mortgage when they would not be able to do so the conventional way.
How Down Payment Assistance & Partner Match Programs Help You
Down Payment Assistance and Partner Match Programs may be used for things like down payment, closing costs, and prepaid/escrow expenses, and may be available in the form of zero-interest deferred loans, forgivable loans, or outright cash grants:
- Zero-interest deferred loans are due upon sale or transfer of the property or if the first mortgage is refinanced or paid in full, and do not accrue interest over time (if you borrow $5,000 now to help with your down payment, you would repay $5,000 when due – perhaps as far away as 30 years if that is how long you are making payments on the primary mortgage);
- Forgivable loans are (in most cases) loans that diminish over time, based on you continuing to make payments on your primary mortgage and staying in your home for a pre-determined period. In a typical case, a loan of $2,500 would drop $500 each year for five years, so that if you lived in your home for this period, you would not have to pay it back at all. However, if you had decided to move after 2 years, you would be required to pay back $1,500 (the original $2,500 loan less $500 for each year you stayed).
- A cash grant is provided by some Partner Organizations, and does not require you to ever pay back the money.
Maryland Mortgage Program’s Down Payment Assistance Program
The Maryland Mortgage Program features Down Payment Assistance, which is an additional loan available to anyone who is eligible for a Maryland Mortgage Program mortgage, helps borrowers put together a suitable down payment on their home. This loan, which can be up to $5,000, is a zero percent deferred loan, which means that you only ever pay back the principal (there’s no interest) after you complete all payments on the main Maryland Mortgage Program mortgage, or if you refinance, sell or otherwise vacate the home.
Partner Match Programs
The Department of Housing and Community Development has partnered with a range of organizations that can provide you with additional funds (sometimes grants, sometimes loans) to help you purchase your first home, and which will be matched by the Maryland Mortgage Program up to $3,500 (as a zero-interest deferred loan – some conditions may apply). Typically, contributions from these organizations range from $1,000 to $5,000 each, and may be combined with each other and with the Department of Housing and Community Development’s Down Payment Assistance loans where eligibility requirements are met. Many borrowers are able to take advantage of at least one of these programs. Go to our Partner Directory to search for participating organizations.
Further Assistance from Local Governments
In addition to the Department’s Down Payment Assistance and Partner Match programs, many local governments throughout Maryland offer additional support to purchase a home in their community. These local governments often work with employers and community organizations to provide local partner assistance beyond state programs already described above. This assistance can be combined with the Department’s Down Payment Assistance and Partner Match Programs to help you with upfront homeownership costs.
Check with your local city or county housing agency for more information, or ask your Lender to help you identify what assistance may be available to you.