First-Time Homebuying Tips and Programs

Buying your first home is an exciting and sometimes overwhelming process. That’s why Securityplus Federal Credit Union is here to support you through each step. If you’re a first-time homebuyer, you may be able to take advantage of special government programs to help lower your costs. Regardless of the type of mortgage you select, there are a variety of important tips to consider when buying your first home in Maryland.

Special Programs & Government Assistance for First-Time Homebuyers

Owning a home is part of the American Dream. To make that dream a reality, both the federal and state governments have created special programs to help first-time homebuyers get into a house of their dreams, or at least one they can afford. Here are some of the federal and state agencies that are making homeownership more affordable:

HUD and FHA Home Loan Programs

The U.S. Department of Housing and Urban Development (HUD) and Federal Housing Administration (FHA) offer several programs to help homeowners afford their home:

• HUD’s Good Neighbor Next Door Program: If you are a police officer, pre-K through 12th grade teacher, emergency medical technician or firefighter, you may qualify for a substantial discount (up to 50%) on your home.
• HUD’s Public Housing Resident Program: If you are currently a resident of public housing, you may be able to convert your rent to a mortgage with this program.
• HUD’s Indian Home Loan Guarantee Program: If you are a Native American or Alaska native, you may be able to take advance of a lower down payment and flexible underwriting.
• FHA Loans: HUD oversees the FHA (Federal Housing Administration) and offers a first-time homebuyers program that can help lower your down payment, lower your closing costs and help you qualify. FHA loans have a lower minimum credit score than conventional mortgages. Through Securityplus Federal Credit Union, you may be eligible for an FHA loan that offers competitive terms and financial advantages.
• Habitat for Humanity Home Application: For those willing to actively participate in building their new home with other volunteers, consider applying to live in a Habitat home. This program is offered independently of Securityplus Federal Credit Union.

First Time Homebuyer Programs in Maryland

In addition to federal programs, many states including Maryland offer special help to homeowners. Here are some of our top picks for prospective homeowners offered through The Maryland Mortgage Program.

• MMP 1st Time Advantage: Offers eligible first-time homebuyers the lowest 30-year fixed interest rate available from the program for a home loan. 
• MMP Flex Loans: 30-year, fixed-rate home loan products accompanied by additional funds for down payment and closing costs. The assistance is available in the form of no-interest, deferred loan. 
• Montgomery County Specialty Products: The Montgomery Homeownership Program and the Montgomery Employee Down Payment Assistance Loan (MEDPAL) are initiatives that provide down payment and closing cost assistance loans to help eligible homebuyers purchasing in Montgomery County.
• HomeAbility: HomeAbility is a special product designed to assist Maryland homebuyers with disabilities to finance their home purchase.
• Maryland SmartBuy Program: Maryland SmartBuy 3.0 gives homebuyers an opportunity to purchase any home in Maryland that meets Maryland Mortgage Program guidelines while paying off student debt. 
• Maryland Mortgage Program FHA Limited 203(k) Loans: The Maryland Mortgage Program is offering an acquisition-rehabilitation product designed to help Maryland homebuyers purchase, restore and modernize a home in Maryland.

First-Time Homebuyer Tips

Besides special homebuying programs, there are a lot of tips that first-time homebuyers in Maryland should consider:

• Separate your wants versus needs: Focus on essentials like location, layout, and safety. Amenities like a pool may be desirable but not necessary.
• Figure out how much home you can afford: A great place to start is our mortgage calculator to get a high-level estimate of what your mortgage payment may be. Remember to account for taxes, PMI, your down payment, closing fees and home insurance. Bankrate recommends spending no more than 28% of your income on your home, but ultimately you need to decide what makes you comfortable. Remember: a house payment that stresses you out doesn’t make for a home you will love.
• Don’t forget about closing costs: It’s a good idea to get an understanding of how much you’ll need to set aside or finance to close on your home. According to Redfin, the average closing costs in Maryland are 2 to 5% of the purchase price.
• Get your credit in line: It’s a great practice to pull your free annual credit report if you are in the market to buy a home because the higher your credit score, the lower the interest rate on your home loan. Find out if there are any errors and take the time to resolve any issues.
• Find out if you qualify for any tax breaks: In addition to federal and state programs for first-time and prospective homebuyers, there are several tax credits you may be able to take advantage of, like the mortgage interest credit, energy efficiency credits and lower-income housing credits.

Want to learn more about buying your first home or get pre-qualified? Contact us to set up an appointment or speak to a mortgage officer at Securityplus Federal Credit Union.