A true grant of $1,500 to help buyers with their closing costs is now available from the State of Maryland that adds a little more sizzle to their loan products.
The grant assistance runs from June 28th to September 30th 2017 in EVERY County throughout Maryland. A buyer wishing to use the grant must have their loan registered during that time period. The grant funds can only be used for closing costs and cannot be used for the down payment, but it can be combined with the other State of Maryland down payment programs. It also must be used for conventional loans only which require a minimum 640 credit score.
Scenario #1: A buyer wants to purchase a home for $200,000. The minimum the buyer has to contribute is 3% for the down payment. The Grant Assist program will cover the ENTIRE down payment. The closing costs are approximately $9,000 and the seller has agreed to give 2.5% or $5,000. The Grant Assist program gives an additional 1% or $2,000 towards closing costs leaving a balance of $2,000 for the buyer to pay. The buyer can now receive an ADDITIONAL $1,500 for closing cost assistance so their out of pocket is $500 ($2,000-$500). All monies received are fully forgivable and do not have to be repaid back to the State of Maryland.
Scenario #2: A buyer wants to purchase a home for $200,000. The minimum the buyer has to contribute is 3% for the down payment. The buyer can use the SELP monies of $5,000 to be applied towards the down payment leaving them to pay an additional $1,000 for the down payment ($6,000-$5,000). The closing costs are approximately $9,000 and the seller has agreed to give 3% or $6,000 leaving the buyer to pay $3,000 in closing costs. The buyer can now receive an ADDITIONAL $1,500 for closing cost assistance so their out of pocket is $2,500 ($1,000 for the down payment and $1,500 for closing costs). The SELP monies of $5,000 are not forgivable and have to be repaid back to the State of Maryland while the $1,500 in closing cost grant assistance are completely forgivable.
As with any program that is offered through the State of Maryland, it has to meet their guidelines and household income limits which are very high (Contact us for a lender referral to obtain the household income limit chart). Buyers have many choices now about the down payment program(s) that will help them into a home. The State of Maryland programs are just the tip of the iceberg. There are many more available programs available to buyers specific to the County they are purchasing in. Now, more than ever before it is vital that you work with a Loan Officer who know these programs because there are many facets to the programs.