Maryland Down Payment Assistance (DPA) Program Guide

Guide to the Maryland Down Payment Assistance (DPA) Program

The Maryland Down Payment Assistance (DPA) Program is designed to help eligible homebuyers in Maryland with the upfront costs of purchasing a home. This program provides financial assistance to cover down payments and closing costs, making homeownership more affordable for Maryland residents. The program continues to offer valuable support in 2025, assisting both first-time homebuyers and those who need help covering the costs of homeownership. Below is an overview of the Maryland DPA Program and how to apply.

1. Program Overview:

• Purpose: The Maryland DPA Program is aimed at making homeownership more accessible by offering financial assistance to cover down payments and closing costs. This program helps reduce the financial barrier to homeownership, ensuring that eligible buyers can afford the initial costs associated with purchasing a home.
• Assistance Amount: Homebuyers can receive up to $5,000 in down payment and closing cost assistance. The amount varies based on eligibility and specific program guidelines, but this assistance significantly reduces the initial financial burden of buying a home.
• Loan Structure: The financial assistance is typically provided as a second mortgage, with no monthly payments required. The loan is deferred or forgiven under specific conditions, meaning you don’t need to pay it back unless you sell, refinance, or pay off your mortgage early.

2. Eligibility Requirements for 2025:

To qualify for the Maryland Down Payment Assistance Program, you must meet the following criteria:

• Income Limits: The program is designed to assist moderate-income homebuyers. Income limits vary depending on household size and the location of the property. These limits are set to ensure the program serves those who need assistance with the costs of buying a home.
• First-Time Homebuyer: The DPA program is primarily for first-time homebuyers, although there are exceptions for veterans or those purchasing in certain areas. A first-time homebuyer is generally defined as someone who has not owned a home in the last three years.
• Credit Score: A minimum credit score of 640 is generally required for eligibility. This ensures that applicants can handle the financial responsibility of a mortgage loan.
• Property Requirements: The home must be located in Maryland and must be used as your primary residence. The property must also meet price limits set by the program to ensure affordability.
• Homebuyer Education: All applicants are required to complete an approved homebuyer education course. This course helps you understand the homebuying process, including budgeting, mortgage terms, and long-term homeownership responsibilities. A certificate of completion is required to proceed with your loan application.

3. How to Apply:

Applying for the Maryland DPA Program is a simple process:

• Find a Participating Lender: The Maryland DPA Program works through approved lenders. You will need to contact one of these lenders to begin your application. The lender will assist you in verifying your eligibility, gathering necessary documents, and guiding you through the application process.
• Required Documentation: Be prepared to submit documentation such as proof of income, tax returns, credit reports, and a certificate of completion from the homebuyer education course.
• Submit Your Application: After preparing your documentation, submit your application to the participating lender. The lender will review your information and process your application. If you are eligible, they will guide you through the next steps in the approval process.

4. Homebuyer Education Course:

• Mandatory Requirement: Completing a homebuyer education course is required for all applicants. This course helps ensure that buyers are well-prepared for homeownership, offering information on mortgage management, financial planning, and home maintenance.
• Course Options: The course is available online and in-person, providing flexibility for your schedule. Upon completion, you will receive a certificate that is necessary to proceed with your loan application.

5. Down Payment and Closing Cost Assistance:

• Assistance Amount: The program offers up to $5,000 in down payment and closing cost assistance. This financial support helps to reduce the amount you need to cover when purchasing a home, making homeownership more affordable.
• Deferred Loan Terms: The assistance is provided as a second mortgage, which is deferred and does not require monthly payments. The loan is due when you sell, refinance, or pay off the first mortgage. In some cases, the loan may be forgiven after a certain period.

6. Finalizing the Loan:

• Approval Process: After your application is approved, your lender will guide you through the next steps, including reviewing and signing the loan documents.
• Closing Costs: While the program helps with down payment and closing costs, you may still be responsible for other fees. Your lender will explain the full list of costs involved in the home purchase and which fees are covered by the program.

Our team of experienced loan officers is here to assist you every step of the way. From applying for assistance to finalizing your loan, we will guide you through the process and ensure that you can make the most of the Maryland Down Payment Assistance Program. With their support, you’ll be able to take the first step toward homeownership with confidence.