“I was pretty clueless about it,” 35-year-old Jose Remedios said of his first home-buying experience in the Maryland real estate market. “I was at the level of, ‘Tell me how much I owe and I’ll pay you that.’” He and his wife had been living in a cramped Silver Springs apartment, but with a third baby on the way, they knew they needed more space. The Remedios family was disappointed to learn that lenders offering mortgages on Maryland real estate required a 20 percent down payment.
The Federal Housing Administration’s program allows buyers the ability to get a piece of Maryland real estate with as little as 3.5 percent down. The buyer can then secure a mortgage easier. If the buyer’s home is later foreclosed upon, the government will cover the lost down-payment money.
To be eligible for the FHA’s Maryland real estate program, buyers must put down 3.5 percent (it’s non-negotiable) and take out mortgage insurance (valued at 2.25 percent of the loan). If they’re looking at condos, the condos must be FHA-certified. If they’re looking at homes, they cannot look at “as is” Maryland real estate.
When subprime mortgages were the hot trend, only 3 percent of buyers wanted anything to do with the FHA program, but now 30 to 40 percent of Maryland real estate buyers are interested, says Steve Stamets of Union Mortgage Group in Rockville.
In my practice, I’ve helped many prospective Maryland real estate buyers get FHA loans. You may also be eligible for a state grant that will help you cover more of the down-payment. Never discount the possibility of becoming a homeowner! There are always ways to save yourself from throwing money away at rent each month.