Can You Buy a Home With Student Debt?

According to The Institute for College Access & Success, about 65% of college seniors who graduated in 2017 had student loan debt. In Maryland, the average amount of debt was $29,314. Many potential homebuyers think with a mound of student debt it will be nearly impossible to purchase a new home. Luckily, there are options for those with debt to buy homes. The Maryland Mortgage Program created the SmartBuy 2.0 program, which helps qualifying homebuyers pay off student debt during the purchase of their home.

The terms are pretty simple.

You must have a minimum existing student debt of $1,000 and the loan must be in your name. The program offers up to a maximum of $40,000 in financing to be used towards paying off your debt. The full, outstanding balance of the student debt must be paid off as part of closing; partial loan payment is not permitted. The student loan may be in repayment or deferred status.

Financing for student debt relief will be in the form of a 0% interest, deferred loan with no monthly payments. The loan is forgivable over 5 years; meaning if you are still living in the property after 5 years, your debt is forgiven, repayment is not needed. If you choose to sell or refinance the property within 5 years, the remainder of the student debt loan will be due.

This is a great program to utilize if you are a first-time homebuyer and have accrued student loans over the past few years. Contact one of our loan officers today to see if you qualify.

 

*Student debt information pulled from the Institute for College Access & Success website: https://ticas.org/posd/home

 

Special Assistance Grant Program from the Maryland Mortgage Program

The Maryland Mortgage Program has announced their new Special Assistance Grant Program to assist homebuyers with down payment and closing costs while purchasing a home.  The MMP offers a range of programs that help make purchasing and owning a home more affordable.  With this Grant, eligible borrowers will receive $2,500 or $1,500 (depending on the Area Median Income), which can be added on to the Maryland Mortgage Program’s existing programs.

Highlights of this product:

  • Grant of $2,500 for borrowers with income not exceeding 50% of the Area Median Income (AMI), Or a grant of $1,500 for borrowers above 50% and not exceeding 80% of the AMI
  • Used for both closing cost and down payment assistance
  • Conventional mortgages using Freddie MAC’s HFA Advantage™
  • May be used with other MMP products, such as Regular Conventional Loan Assist, Conventional Grant Assist,  Conventional Rate Assist, and 1st Time Advantage Loans
  • May not be combined with Maryland SmartBuy or refinance products
  • Regular down payment assistance may be layered with this product
  • Partner Match Program funds may be layered with this product
  • Maryland HomeCredit Program may be used (MMP will waive $450 MMP fee as an additional incentive)  
  • Must be purchasing in Maryland                 

          Income Eligibility Per County

     County                                Income Limit 80%/50% AMI                    

  1. Allegany                            $44,400/$27,750
  2. Anne Arundel                  $75,920/$47,450
  3. Baltimore                         $75,920/$47,450
  4. Baltimore City                 $75,920/$47,450
  5. Calvert                              $93,760/$58,600
  6. Caroline                            $57,040/$35,650
  7. Carroll                               $75,920/$47,450
  8. Cecil                                   $69,920/$43,700
  9. Charles                              $93,760/$58,600
  10. Dorchester                        $57,040/$35,650
  11. Frederick                           $93,760/$58,600
  12. Garrett                               $57,040/$35,650
  13. Harford                              $75,920/$47,450
  14. Howard                              $75,920/$47,450
  15. Kent                                    $59,680/$37,300
  16. Montgomery                     $93,760/$58,600
  17. Prince George’s                $93,760/$58,600
  18. Queen Anne’s                   $75,920/$47,450
  19. Somerset                           $57,440/$35,900
  20. St. Mary’s                          $82,720/$51,700
  21. Talbot                                $61,920/$38,700
  22. Washington                      $53,600/$33,500
  23. Wicomico                          $57,440/$35,900
  24. Worcester                          $57,440/$35,900

Want to see if you qualify for this Special Assistance Grant?  Contact one of our Maryland Loan Officers, today.

New Maryland Mortgage Program – 1st Time Advantage

The Maryland Mortgage Program (MMP) is offered by the Maryland Department of Housing and Community Development and provides borrowers with program options to purchase in the State of Maryland.  Currently, the MMP offers 30-year, fixed-interest rate mortgages while making down payment and closing cost assistance available to eligible homebuyers.  These assistance options make purchasing a home more affordable either in the form of a grant, or as a deferred, no-interest loan.

As of May 3, 2018, the MMP announced a new program – MMP 1st Time Advantage – that provides the lowest Maryland Mortgage Program interest rate to Maryland first-time homebuyers.  Additional features and requirements of this program are:

  • Down payment and closing cost assistance not available from MMP but assistance funds from external sources are allowed
  • Cannot be combined with other MMP products (including Partner Match, Homefront, HomeCredit or Refinance products)
  • Available to first-time homebuyers only (unless purchasing in targeted area or an honorably discharged veteran)
  • Homebuyer education required
  • Standard MMP eligibility applies

To learn more about the advantages of this program and other MMP programs, or how to get started, contact one of our Maryland licensed Loan Officers.

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