Pre-Purchase Assistance Is Available in Maryland - Before You Apply, Prepare for Homeownership

Homeownership offers many rewards. It gives us greater control over how we live, increased stability, and the potential to build wealth through equity. That said, it doesn’t come cheap. It can take several years to save the money required for a down payment and closing costs, especially if your income is limited. But here’s some information that may help: Certified housing counselor Mary Rammel says there may be resources available to help you deal with these expenses provided you have enough income available to cover the ongoing expenses of ownership.”

One way to get a realistic handle on what it costs to own a home is to enroll in a reputable pre-purchase counseling or education program. Rammel says, “Helping clients evaluate their readiness is one of the primary goals here at CCCS. In both our online homeownership program and our one-on-one counseling sessions, we provide a full financial assessment. We help clients take a look at their budget. We examine the costs associated with buying a home and discuss how owning is different from renting. Clients leave understanding it doesn’t just come down to paying the mortgage and real estate taxes. You also have to have enough money in the bank to regularly pay for items like property insurance and home repair.”

Rammel notes that pre-purchase education and/or counseling are also a requirement of most homeownership assistance programs. “Program providers recognize that homebuyers who are better informed are less likely to get into financial trouble and lose their homes to foreclosure later on.”

With knowledge in hand, what types of programs are available to homebuyers? Rammel says, “States and municipalities offer grants, low-interest loans to cover closing costs, and homeowner tax credits. These resources may be very helpful to homebuyers with modest means.”

Why don’t we take a look at some of the assistance programs available to homebuyers in Maryland?

• MD Homeownership Assistance Program

The Maryland Mortgage Program (MMP) provides help in the form of down payment assistance and a range of “partner match” initiatives from employers, developers, and community organizations. These may help you cover closing costs, prepaid/escrow expenses, and home inspections performed by qualified home inspectors.

Under the program, down payment assistance is available in the form of an additional loan and can be obtained by anyone who qualifies for the MMP. Assistance comes in the form of a zero-interest deferred loan and may cover up to $8,500 of your down payment. Forgivable loans and outright cash grants are also available to those who qualify for specific partner match programs.

Household income and property eligibility requirements apply to the MMP. To learn more, visit the Maryland Department of Housing and Community Development website.

• Federal Homeownership Tax Credits

Maryland also offers federal tax credits to state residents who are purchasing homes. This is different from the mortgage interest deduction most homeowners already claim each year on their federal tax returns. Its HomeCredit Program provides eligible homebuyers with an annual federal tax credit worth 25% of the value of the mortgage interest payment made each year for the life of the loan. To qualify, homebuyers must meet the same income and home purchase price limits they would for the MMP. Other requirements also apply.

Rammel recommends that homebuyers review eligibility and application requirements for assistance programs closely. “Also be aware that being eligible doesn’t automatically mean you are approved. Factors like your income, current debt, and employment status may affect your ability to receive assistance. For example, most programs require you have a credit score of at least 640.”

This is another area where reliable homeownership education or counseling can make a difference. Rammel says, “Clients who attend CCCS’s online course learn how to review and request corrections on their credit reports. They find out how credit scores are calculated, and most importantly, how they can improve their credit standing. Whether you’re applying for a mortgage or assistance, these are vital things to know.”

CCCS’s online Pre-Purchase Homeownership course is convenient and self-paced. If you’d like to know more about it, visit the agency website or call 1-866-731-8486 for further details. Education is the first step to successfully buying and owning a home!

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Consumer Credit Counseling Service of MD & DE, Inc. (CCCS) is an accredited 501(c)(3) nonprofit agency that helps stabilize communities by creating hope and promoting economic self-sufficiency to individuals and families through financial education and counseling. CCCS MD State License #14-01