We’ve been seeing a lot of home buyers taking advantage of the Maryland Mortgage Program, both our own buyers, as well as those purchasing our listings. It’s a great loan product for first-time buyers, as well as repeat buyers.
The Maryland Mortgage Program provides 30-year fixed-rate mortgage loans to eligible homebuyers in Maryland. The terms are very competitive with other programs, something that hasn’t always been the case with state programs. The interest rates are very good.
It’s a great program! It has made the difference for many homebuyers who otherwise wouldn’t have been able to purchase a home. The good news is…Maryland loves home buyers. We’d like to get the word out, so here’s a synopsis of the program.
Table of Contents
- Who Can Use the Maryland Mortgage Program?
- Are There Income Limits for the MMP?
- What are the Income Limits with MMP?
- Which Lenders Work with the Maryland Mortgage Program?
- What are the Credit Scores Required to Buy a House with MMP?
- Can I Get Downpayment Assistance with MMP?
- How Much Downpayment is Required?
- Pay off Student Debt with MMP
- The Maryland Mortgage Program – A Great Product!
- Start with an Experienced Maryland Realtor®
Who Can Use the Maryland Mortgage Program?
The Maryland Mortgage Program, or MMP, is available to homebuyers (for their primary residence and only real estate) in Maryland who have not owned in three years. Applicants must be at least 18 years of age and have a valid social security number. U.S. citizenship is not required to be eligible.
(However, the MMP allows homebuyers who are not “first-time buyers” to take advantage of the program in the purchase of properties that are located within target areas.)
Homebuyer education is required for MMP loans. These courses are offered from several resources, both local and online. Some are for a fee, some are free.
Are There Income Limits for the MMP?
There are income parameters with MMP. The income of all working adults in the family will be considered for the mortgage. That includes every form of income.
We’ve had circumstances where borrowers didn’t understand what was considered income. One family we know of was moving along toward settlement when the mortgage company found that an elderly family member living with them was on disability. That income counted and it put them over the income limits.
What are the Income Limits with MMP?
Each county has certain household income limits. Every market is a little different as far as income averages and home values. Limits range from $92,500 to $154,420, depending on location. Here in Frederick County, the income limit is $148,000. It’s a generous amount!
Additionally, if you purchase a home within a “targeted area” eligibility is a bit easier, income limits are higher. Targeted areas have been designated for “Priority Funding”. These are existing communities and places where local governments use state investments to support future growth.
- All properties are within a targeted area in these counties: Baltimore City, Allegany, Caroline, Dorchester, Garrett, Kent, and Somerset.
- There are no targeted areas in the following: Calvert, Carroll, Cecil, Charles, Howard, Queen Anne’s, St. Mary’s, Talbot, or Worcester.
- For all the rest, including Frederik County, there is a map to determine if the property is in a targeted area.
Remember, the targeted areas are easier, but it is still possible to purchase most other homes through MMP.
Which Lenders Work with the Maryland Mortgage Program?
There are more than 80 approved mortgage lenders who participate with the MMP. There are several ways to customize the loan. A loan officer who is familiar with the product will know how to create a loan package that is just right for your situation.
There are lots of employers and organizations that offer matching grants, loans and other types of assistance to first-time buyers. These can often be stacked together with the MMP grants or 0% loans to cover downpayment costs.
What are the Credit Scores Required to Buy a House with MMP?
Depending on the loan and the lender, the usual credit score requirements apply to a loan backed by the Maryland Mortgage Program. For instance, FHA loans require a minimum credit score of 640. Of course, the better the credit score, the better the terms, and the fewer the lender “overlays”, or extra fees they charge.
We always encourage buyers to do everything they can to get their credit scores higher than the minimum requirements. Here are several helpful articles about building a good credit score lenders will love.
Can I Get Downpayment Assistance with MMP?
There are two tracks with MMP, one for first-time buyers and one for repeat or first-time buyers. There are variations in features. Both FHA and conventional loans are available.
MMP 1st Time Advantage (must be first-time buyers)
Within the MMP 1st Time Advantage, there are three tiers. The first is called 1st Time Advantage Direct. It has no assistance but a very low interest rate. (as I write this the FHA rate is 2.875%! Of course, this is subject to change.)
Secondly, the 1st Time Advantage 5000 has a $5,000 downpayment assistance loan which may be matched by other programs or grants, or gifts from family members or employers. (The current FHA loan rate for this program is 3.625%)
The third tier is the 1st Time Advantage 3% Loan. It offers assistance with a low-interest rate on their first mortgage and a deferred, no interest second loan equal to 3 of the first mortgage. This second assistance loan can be paid off, refinanced, or transferred. If that 3% amount exceeds the closing costs, the remainder can be applied to the principal. (FHA loan rate is currently 3.625%)
MMP Flex (can be repeat or first-time buyers)
Within the second track, there are five “Flex” tiers: Flex Direct, Flex 5000, a Flex 3% loan, Flex 3% grant, and Flex 4% grant. These programs are similar but have slightly higher interest rates. These are all very competitive programs are worth checking out, even if you are not a first-time buyer.
How Much Downpayment is Required?
FHA loans require 3.5% of the price of the home as a downpayment. There are many Conventional loan products with varying downpayment requirements and slightly higher interest rates.
Pay off Student Debt with MMP
This is one of the best loan innovations, in my opinion. The biggest deterrent for many millennials in purchasing a home is college debt. Given the right circumstances, buyers may be able to pay off their student debt through the Maryland Mortgage Program and purchase their first home all in one great package.
Maryland Mortgage Smartbuy 2.0
This innovative product gives qualified homebuyers an opportunity to purchase any home in Maryland that meets Maryland Mortgage Program guidelines while paying off student debt. This is a limited-time program.
The program financing provides up to 15% of the home purchase price up to $40,000. The full amount of outstanding student debt must be paid off at closing. It is a super program that has helped first-time buyers purchase when they otherwise could not.
See more details about Maryland Mortgage Smartbuy 2.0
See more details in this pamphlet about the Maryland Mortgage Program
The Maryland Mortgage Program – A Great Product!
Whether you are a first-time buyer or this is not your first rodeo, the Maryland Mortgage Program is worth checking out. The interest rates and terms are very good. It’s a flexible program with several tiers to fit a variety of buyer needs. We are excited about it because, to be honest, Maryland programs have not always been very competitive with the market.
Start with an Experienced Maryland Realtor®
The first stop in your home search should be with an experienced real estate professional. We can help you with your home search. We can connect you with a local lender who is experienced with the Maryland Mortgage Program.