Credit Score Requirements for First Time Home Buyer Loan Assistance Programs in Maryland
Comprehensive Article about Credit Score Requirements for First Time Home Buyer Loan Assistance Programs in Maryland
The Maryland Mortgage Program, sponsored by the Maryland Department of Housing and Community Development, offers two mortgage types and a variety of down payment assistance programs.
The state is also unusual in that it has a program for disabled homebuyers and those with student debt. Here’s more.
1st Time Advantage
Maryland SmartBuy 3.0
Maryland Down Payment Assistance
Maryland Down Payment Assistance
1. 1st Time Advantage
These 30-year fixed-rate mortgages, which can be conventional loans or government-guaranteed FHA, USDA, or VA loans, offer competitive interest rates and may be paired with several second mortgage options for down payment assistance.
Borrowers must be first time home buyer Maryland. For buyers in some targeted areas of the state and for most veterans, the first-time homeowner requirement does not apply.
Household income limits are based on location and household size . (In targeted areas , household income may be slightly higher.) Household income is based on all sources of income for everyone 18 and older who will be living in the house. Purchase price limits also exist and depend on location.
Borrowers must have a FICO® credit score of at least 640 for government-insured loans and at least 640 to 680 for conventional loans. All borrowers must complete homebuyer education.
2. Flex Loans
This program is similar to the 1st Time Advantage loans but is available to repeat buyers as well as first-timers. It includes down payment assistance in the form of a 0% interest second mortgage or a grant that does not have to be repaid.
If you are disabled or you are a guardian and principal caregiver for an immediate family member you live with who is disabled, the HomeAbility program offers a 30-year fixed-rate conventional loan for 80% of the purchase price and a 0% interest second loan of up to 25% of the purchase price for a down payment or closing costs.
Payments on the second loan are deferred for the life of the first mortgage.
The income limits are lower than limits for other Maryland Mortgage Program loans. Applicants must document the disability.
4. Maryland SmartBuy 3.0
This program allows borrowers with a minimum student debt balance of $1,000 to borrow up to 15% of the home purchase price to use to pay off outstanding student debt. This is a second loan, not a second mortgage.
The maximum payoff amount is $30,000, and the full student debt of at least one of the borrowers must be paid off at the time of home purchase.
The zero-interest loan has no payments, and 20% of the loan is forgiven each year over the course of five years. If the borrower sells before that time, the remaining balance must be repaid. Borrowers must meet the same eligibility requirements as other Maryland Mortgage Program loans.
5. Maryland Down Payment Assistance
The Maryland Mortgage Program offers a variety of down payment assistance programs for both the 1st Time Advantage and Flex mortgages.
For the 1st Time Advantage program, down payment assistance includes:
1st Time Advantage 5000, a $5,000 loan for down payment and closing costs with a 0% interest rate and no payments for the life of the first mortgage. This loan is eligible for Partner Match funds. With Partner Match , if you’ve obtained other down payment assistance, say from an employer or community organization, Maryland will match that assistance, up to $2,500, through a 0% interest loan.
• 1st Time Advantage 3% Loan, a down payment assistance second mortgage equal to 3% of the first mortgage.
• 1st Time Advantage 4% Loan, a down payment assistance second mortgage equal to 4% of the first mortgage.
• 1st Time Advantage 5% Loan, a down payment assistance second mortgage equal to 5% of the loan.
Borrowers must meet the same eligibility requirements as the 1st Time Advantage mortgage.
The Flex program down payment assistance includes:
• Flex 5000, a $5,000 loan for down payment and closing costs with a 0% interest rate and no payments for the life of the first mortgage. This loan is also eligible for Partner Match funds.
• Flex 3% Loan, a down payment assistance second mortgage equal to 3% of the first mortgage.
• Flex 3% Grant, a 3% grant to be used for down payment or closing costs. A grant does not get repaid.
6. Local Homebuyer Assistance Programs
Certain cities and areas in Maryland also have first-time homebuyer assistance programs. For example, the Maryland Mortgage Program partners with Montgomery County to offer additional down payment assistance to first-time buyers in this area near Washington, D.C. And Baltimore, Maryland’s most populous city, offers several home buying assistance programs.
First Time Home Buyer Programs administered by the Maryland Mortgage program require a credit score of 640 or above for government-insured loans and a minimum score of 640 to 680 for conventional loans, depending on the lender. There are other private, state, and federal loan programs that borrowers with lower scores may be able to access.