With recent news of the termination of down-payment assistance programs such as Nehemiah and AmeriDream, borrowers find themselves having to put at least 3% down from their own funds on a purchase. That is, unless they are fortunate enough to have a family member willing to gift them the funds, which is still allowable.
One exception to the “free money” rule is still available for buyers of primary residences in Montgomery County, MD. The Housing Opportunities Commission (HOC) offers qualified first time buyers some excellent financing options, including the opportunity to receive a 3% purchase assistance grant from HOC. The grant may be used for down payment, closing costs, points, escrows, or other prepaid expenses. The borrowers must demonstrate a true need for the grant in order to be eligible.
Three programs are offered by HOC, all with below market fixed interest rates and zero points. The following program descriptions and information reflect rates effective as of August 11, 2008, and are subject to change at any time.
30 Year Step Rate: This program gives borrowers a lowered interest rate for the
first two years of the loan.
Year 1 = 4.40%
Year 2 = 5.40%
Years 3-30 = 6.40%
30 Year Fixed Rate: This program is a standard 30 Year Fixed program.
30 Year Fixed Rate with 3% Purchase Assistance: This program is a standard
30 Year Fixed where the borrower receives a 3% grant from the HOC to be
used for the down payment.
Borrowers total household income must fall below the maximum limits which are:
1 Person Household: $82,650
2 People Household: $118,080
3 People Household: $137,760
The maximum sales price allowable is $429,619.