General Mortgage Loan Info
Maryland’s Department of Housing and Community Development runs the Maryland Mortgage Program. Homebuyers can find out if they are eligible under this program for down payment and closing costs assistance. There are several options under this program, including the first-time homebuyer eligibility.
To use these programs, you will need to stay within specific household income limits. Those limits can vary, depending on location and household size. There are also specific targeted areas, where income limits are slightly higher. The home must also be your primary residence.
VA Loans in Maryland
A VA loan is made by private lenders, but guaranteed by the Department of Veterans Affairs, so your lender needs to be licensed in Maryland. The VA loan program also offers a $0 money-down benefit, which can help veterans who might not have the ability to bring a large down payment to the closing table. As of January 1, 2020, VA borrowers with their full VA loan entitlement are not restricted by VA loan limits. Thus, you can borrow as much as the lender is willing to lend you without having a down payment. If you do not have your full VA loan entitlement, then you will be bound by Maryland’s VA loan limits, which can vary by county. Some VA buyers in Maryland may also be eligible for a property tax exemption if you meet one of the following conditions:
- If you are 100% disabled veteran, then you could qualify for a property tax exemption.
These loans have no mortgage insurance premiums, low closing costs, no prepayment penalty, and lower average interest rates. You can also reuse the program for veterans with entitlement remaining. There is no minimum credit score is set by the VA, but the individual lenders can set their own credit requirements.
FHA Loans in Maryland
Maryland FHA loans are available for those with less than perfect credit and a lower down payment. The FHA loans are insured through the federal government, which lowers the risk for lenders and allows homebuyers to take advantage of low interest rates.
With the lower down payment, however, you will have to pay MIP (mortgage insurance premiums) as part of your monthly mortgage payment. Your closing costs will also include an upfront premium (UFMIP), which can be paid at closing or rolled into the life of your loan.
USDA Loans in Maryland
The USDA offers a program that allows you to purchase a home without any down payment. You can also finance your closing costs. The mortgage insurance, referred to as the “guarantee fee,” is typically lower than MIP insurance through the FHA. All USDA loans come with a fixed interest rate that will not adjust or fluctuate throughout the life of your loan. Another benefit is that you do not have to be a first-time home buyer.
However, to qualify, you must meet the income limits, and the property must be in a rural area. You also have to use the property as your primary residence. There are no exact loan limits through the USDA program, since the amount you can borrow will be based primarily on your debt-to-income ratio.