This is really exciting news for home buyers. The State of Maryland just super sized their Grant Assist Program and it will help many, many buyers throughout the State of Maryland. Initially the program was rolled out to help with ONLY the closing costs but they have just changed it so that the 4% can be used towards down payment and/or closing costs. This is HUGE news, if your buyer has a minimum 640 credit score they could have their entire down payment covered by using this program instead of the flat $5,000 the State offers through the CDA program.
Example: A buyer wants to purchase a home for $300,000. The minimum the buyer has to contribute is 3% for the down payment. The Grant Assist will cover that ENTIRE down payment. The seller has agreed to give 3% for closing costs and the program will also cover another 1% towards closing costs for a total contribution of $12,000. And viola, the buyer is in with no money out of their pocket!
* Grant Assist program is a grant of 4% of the first lien that can be used for down payment and/or closing costs. All 4% must be used entirely or the remainder of the funds will be used towards a principal curtailment.
* Conventional loans only, no FHA loans accepted for the 4% assistance if buyer is going to use it for down payment. Minimum credit score required for conventional is 640 and only 3% down payment (condo's included).
* Buyer can use a FHA loan if they want to use the 4% grant for closing costs only.
* Program available throughout every County in the State of Maryland.
* Grant Assist funds cannot be combined with any down payment offered through the State of Maryland. The Partner Match Program is not available through the program either. Assistance from employers, builders, non-profits, etc. may be utilized by the borrower in combination with this initiative but will not be matched by the Department's funds.
* Grant is fully forgivable and does not have to be repaid back.
* Rates are published daily by the State of Maryland for the first lien (these rates are higher than traditional rates).
* Borrowers must meet all eligibility requirements established for the Maryland Mortgage Program.
I work with many of the first time home buyer programs and I am very excited about this program. I can see the potential it will have to help so many buyers purchase their first home.