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Maryland Mortgage Program: What You Should Know

So you want to purchase a home in Maryland. Congratulations! Becoming a homeowner can mean greater stability, more control over how you live, a stronger sense of community, and the potential for building equity and wealth for the future.

This is an exciting time, but buying your first home can feel overwhelming. The process can be much easier if you know where to find the right loan and assistance programs – especially if you need help coming up with a down payment or if your credit is less than perfect.

In this post, we cover the key details on the Maryland Mortgage Program (MMP), which is designed to make homeownership more affordable, especially for first-time homebuyers. Keep reading to learn how MMP can help you!

WHAT IS THE MARYLAND MORTGAGE PROGRAM?

Provided by the Maryland Department of Housing and Community Development (DHCD), the Maryland Mortgage Program (MMP) delivers home loans and down payment assistance to eligible first-time homebuyers in Maryland.

Under the Maryland Mortgage Program, a first-time homebuyer is anyone who:

  • Hasn’t owned a home anywhere in the past three years; or
  • Is purchasing in a Targeted Area; or
  • Is a Veteran using their exemption for the first time

The MMP provides 30-year fixed-rate mortgages with competitive interest rates, but what makes the program special is the wide range of financial incentives and assistance it offers. For many homebuyers in Maryland, these incentives mean the difference between continuing to rent and being able to purchase a home of their own.

HOW CAN THE MARYLAND MORTGAGE PROGRAM HELP ME?

Here are some highlights of how you can benefit from the Maryland Mortgage Program:

  • 30-year fixed-rate loans with predictable monthly payments
  • Competitive loan terms and interest rates
  • Down payment and closing cost assistance help you get into a home faster
  • Some forms of assistance come in the form of grants, which do not need to be repaid
  • The Maryland HomeCredit Program offers a mortgage credit certificate to help reduce federal taxes
  • Free and low-cost homebuyer education courses
  • Some programs may be combined for even more savings

DOWN PAYMENT AND CLOSING COST ASSISTANCE

The MMP provides several forms of down payment and closing cost assistance to help make the purchase of a home more affordable.

You can use this money to meet the requirements for your down payment or to help cover closing costs. The funds may be provided in the form of a deferred, no-interest loan, or in the form of a grant, which does not need to be repaid.

HOMEBUYER EDUCATION

Sometimes called pre-purchase counseling or housing counseling, homebuyer education can help you prepare for and make smart decisions during the homebuying journey. For many MMP loans and assistance programs, completing an approved homebuyer education course is a requirement.

Classes are offered locally and in many cases are available in-person or online for your convenience.

HELP FOR FIRST-TIME HOMEBUYERS WITH STUDENT DEBT

The Maryland SmartBuy program helps eligible homebuyers with qualifying student debt purchase a home. Through special MMP financing, outstanding student debt can be paid off as part of the home purchase. Additional programs may be available during limited times for eligible groups and/or targeted locations.

MARYLAND HOMECREDIT PROGRAM (MORTGAGE CREDIT CERTIFICATE)

The Maryland HomeCredit Program can save you tens of thousands of dollars over the life of your home loan!

A Maryland HomeCredit, generically referred to as a mortgage credit certificate, allows eligible homebuyers to claim a federal tax credit of up to $2,000 every year, for the life of the loan.

The amount that can be claimed is equal to 25% of mortgage interest paid on the loan each year, capped out at $2,000 annually. This amount can be claimed as a tax credit each year until the loan is paid off, refinanced, transferred, or the home is sold.

WHAT ARE THE ELIGIBILITY REQUIREMENTS FOR MMP?

Homebuyers need to meet certain eligibility criteria in order to be approved for a home loan through the Maryland Mortgage Program.

In general, the MMP eligibility requirements state that you need to do the following:

  • Be at least 18 years of age and have a valid Social Security Number. U.S. citizenship is not required.
  • Be a first-time homebuyer, unless the property is in a targeted area.
  • Occupy the property you are purchasing as your primary residence.
  • Confirm that you do not currently own other residential properties.
  • Meet income guidelines, which vary by location and household size. As of the time this post is written, limits fall between $92,500 and $154,420. Find the most up to date limits for your area here.
  • Verify that your liquid assets, including gifts, are less than 20% of the purchase price.
  • Complete an approved homebuyer education course.

Individual programs may have additional eligibility requirements.

HOW DO I GET STARTED WITH THE MARYLAND MORTGAGE PROGRAM?

If you’re considering buying a home in Maryland, a home loan through MMP could be a helpful, money-saving option for you!

Want to find out if you’re eligible? Talk to one of our Maryland Mortgage Program experts today to confirm your eligibility. We’re happy to answer any questions you have about MMP or the home buying process in general.