If you are a would-be first time home buyer concerned about buying a home, you’re not alone. First time home buyers have had the most difficulty getting back into the real estate market after the Great Recession. Many would-be first time home buyers lack the financial resources, while others worry about the long term value. However, there is probably no better time than now to buy your first home.
You may be one of the many would-be first time home buyers who opted to continue to rent or live with their parents until the timing was right. Many would-be home buyers did the same, as a 2106 Pew Research Center report pointed out the millennial housing trend that may be associated with the decline in the homeownership rate since the Great Recession (For First Time in Modern Era, Living With Parents Edges Out Other Living Arrangements for 18- to 34-Year-Olds; pewsocialtrends.org; May 24, 2016). However, economic factors have significantly improved, and the housing market has stabilized. So what’s holding you back?
Buying a home can seem intimidating, and overwhelming. But it doesn’t have to be. The first step is find a professional and competent Realtor who will “be” with you throughout the process. Of course, finding an agent whom you trust can be a process too. It’s important to know your agent will be there for you, not only to answer questions and resolve your concerns, but to also represent your best interests.
If affordability, down payment and closing costs are a concern, apply for a first time home buyer assistance and/or grant program. There are many programs available offered through local and state organizations. Your lender can help you find and apply to the programs for which you qualify. Regular communication with your loan officer is important because the funding is limited annually and can quickly run out.
One of the mainstays for first time home buyer assistance is the Maryland Mortgage Program (mmp.maryland.gov). The MMP is provided through the Maryland Department of Housing and Community Development, and funded by the Community Development Administration. It is described as “...providing home loans and down payment assistance to Maryland’s working families to encourage responsible homeownership and build strong communities, working through a network of Maryland Mortgage Program lender organizations.”
MMP loans are just like other mortgages, except that they offer competitive rates and offer additional assistance in the form of Down Payment Assistance and Partner Match Programs (up to $8,500 from the Department and possibly more from partner organizations). Some Partner Match programs offer homebuyer grants. However, other Assistance programs are generally in the form of deferred, no-interest loans.
Combining Down Payment Assistance with a Partner Match program can significantly reduce the amount you need to buy your first home! The Down Payment Assistance program is a loan of up to $5,000. The loan is a zeropercent deferred loan, which is repaid when you pay off the main Maryland Mortgage Program mortgage when you refinance, or sell the home.
Department of Housing and Community Development has partnered with many organizations and employers that can provide you with additional assistance. Your current employer may be a participant with the Partner Match program (check the Partner list at mmp.maryland.gov). Local organizations also offer home buyer assistance (including the Moderately Priced Dwelling Unit Program) as well, such as the Housing Opportunities Commission (hocmc.org) and The City of Gaithersburg.
Dan Krell is a Realtor® with RE/MAX All Pro in Rockville, MD. You can access more information at www.DanKrell.com.\