Guide for First Time Home Buyers

Preparing to be a First-Time Homebuyer

Consider your timeframe.

Do you plan to live in your new home for at least three to five years? When would you be ready to buy a home? Are you waiting for your lease to end? Owning a home is a long-term commitment, not a short-term investment.

Understand your credit score.

Know your credit history. Get a copy of your credit report (there are three credit bureaus you can request a report from, Experian, Equifax, and TransUnion.) Check for any errors in your credit history six to twelve months before you apply for a loan. It takes time to make corrections to any errors you spot. (See “Financial Wellness” for information or our Take Control of Your Credit blog for more info)

Prepare your finances.

Financial preparation includes steady employment, a good credit score, cash for a down payment and/or closing costs, plus reserves. Start gathering documents that prove your finances for your lender, including tax returns, W2s, and bank statements. These are basic requirements to obtain a mortgage and provide a cushion to help with repairs and maintenance.

Create a monthly budget.

Review your budget to determine how homeownership will affect your monthly expenses. Think about monthly mortgage payment as well as taxes, utilities, HOA/condo fees, maintenance, etc. Your lender should be able to give you an estimate of your mortgage payment and taxes when you get pre-approved. Research can help you estimate other costs.

Determine your price range.

Your total housing expenses (mortgage principle, interest, taxes, insurance and other fees) should not exceed 28-30% of your gross income. Save enough cash to make a minimum down payment (as low as 3% of the price of the home for some first-time homebuyer programs), as well as all or a portion of the closing costs (roughly estimated to be 3%).

Make a home wish list of needs and wants

How many bedrooms or bathrooms do you need? Is a particular school district important? Do you want access to public transportation? Do you need a large yard? Be clear with your real estate agent about your priorities for your perfect home while understanding the difference between your needs and your wants. You might not get all of the items on your lists, but it’ll give you and your agent a good starting point for your search.

Lender Pre-Approval for First Time Home Buyers

Pre-Approval Letter

A pre-approved letter tells a seller that you are ready and able to commit and are eligible for financing for a home in a particular price range.

Interest Rates

Pre-approval does not necessarily lock you into an interest rate. Unless otherwise stated, the interest rate that the lender quotes may fluctuate with the market between the time you first meet with the lender and the time you have an executed contract.

Homebuyer Education

The lender will alert you if there is a requirement for homebuyer education classes for specific loan programs, so that you can complete it before you submit an offer.

First Time Home Buyer Programs in Maryland

Cumberland Neighborhood Closing Cost Assistance Grants:
Closing Cost Grants | Cumberland Housing

Anne Arundel County

Mortgage Assistance Program:
https://acdsinc.org/housing-resources/homebuyers/mortgage-assistance/

Habitat for Humanity of the Chesapeake:
https://www.habitatchesapeake.org/work/homeownership-program/

Annapolis MPDU Program:
Moderately Priced Dwelling Units (MPDU) | Annapolis, MD

Annapolis Settlement Expense Assistance Program:
MPDU Settlement Expense Assistance Program | Annapolis, MD

Baltimore City

Baltimore City Employee Homeownership Program:
https://dhcd.baltimorecity.gov/hho/homeownership-incentives

Buying Into Baltimore:
https://dhcd.baltimorecity.gov/hho/homeownership-incentives

First-Time Homebuyers Incentive Program:
https://dhcd.baltimorecity.gov/hho/homeownership-incentives

Live Near Your Work:
https://dhcd.baltimorecity.gov/hho/homeownership-incentives

Vacants to Value Booster:
https://dhcd.baltimorecity.gov/hho/homeownership-incentives

Healthy Neighborhoods Purchase and Repair Loans:
Our Loans | Healthy Neighborhoods

Habitat for Humanity of the Chesapeake:
https://www.habitatchesapeake.org/work/homeownership-program/

Baltimore County

Settlement Expense Loan Program (SELP):
Housing Opportunities and Finance | Baltimore County Government (baltimorecountymd.gov)

Habitat for Humanity of the Chesapeake:
https://www.habitatchesapeake.org/work/homeownership-program/

Lifebridge Health Employees Live Near Your Work Program:
Housing Opportunities and Finance | Baltimore County Government (baltimorecountymd.gov)

Calvert County

House Keys 4 Employees:
Housing Programs | Calvert County, MD - Official Website (calvertcountymd.gov)

Patuxent Habitat for Humanity – Purchase Program:
Homeownership | Patuxent Habitat for Humanity

Carroll County

Interfaith Housing Purchase-Repair Homeownership Program:
https://www.interfaithhousing.org/programs

Habitat for Humanity of Carroll – Homeownership:
Homeownership Program | Carroll County Habitat for Humanity (cchabitat.org)

Caroline County

Maryland Rural Development First-Time buyer:
Housing – Maryland Development Rural Corporation (mrdc.net)

Cecil County

Habitat for Humanity Homeownership Program:
Homeownership – Habitat for Humanity, Susquehanna (habitatsusq.org)

Maryland Rural Development First-Time buyer:
Housing – Maryland Development Rural Corporation (mrdc.net)

Charles County

House for Keys Employees:
https://www.charlescountymd.gov/government/human-resources/benefits/employee-benefits/sheriff-s-office-retirement-plan/house-keys-4-employees

First Time Home Buyers Settlement Expense Loan Program (SELP):
https://www.charlescountymd.gov/services/health-and-human-services/housing-services/housing-authority

Dorchester County

Habitat Choptank – Homeownership:
Homeownership | Habitat for Humanity Choptank | Maryland Charities (habitatchoptank.org)

Maryland Rural Development First-Time buyer:
Housing – Maryland Development Rural Corporation (mrdc.net)

Frederick County

Frederick County Homebuyer Assistance Program:
https://frederickcountymd.gov/6375/Homebuyer-Programs

Frederick Habitat Land Trust:
Affordable Housing - Habitat for Humanity Frederick (frederickhabitat.org)

Interfaith Housing Purchase-Repair Homeownership Program:
https://www.interfaithhousing.org/programs

City of Frederick MPDU Program:
Housing Counseling Office | The City of Frederick, MD - Official Website (cityoffrederickmd.gov)

City of Frederick House Keys 4 Employees:
House Keys for Employees Program | The City of Frederick, MD - Official Website (cityoffrederickmd.gov)

City of Frederick Community Partners Incentive Program:
Community Partners Incentive Program | The City of Frederick, MD - Official Website (cityoffrederickmd.gov)

Garrett County

Garrett County Habitat – Homeowner:
Become a Homeowner | Garrett County Habitat for Humanity

Garrett County Community Action – Homebuyer Program:
Garrett County Community Action Committee Inc. | Empowering Individuals and Families to turn Aspirations into Achievements (garrettcac.org)

Harford County

Home Partnership Inc Downpayment Assistance:
Down Payment & Closing Cost Assistance — Home Partnership, Inc. (homepartnershipinc.org)

Habitat for Humanity Homeownership Program:
Homeownership – Habitat for Humanity, Susquehanna (habitatsusq.org)

Howard County

Settlement Downpayment Loan Program – Includes HomeStarter, HomeSteader, DreamMaker, Revitalization and Workforce Initiative Loans:
https://www.howardcountymd.gov/DHCD-SDLP

Moderate Income Housing Unit (MIHU) Program:
https://www.howardcountymd.gov/DHCD-MIHU-Program

Habitat for Humanity of the Chesapeake:
https://www.habitatchesapeake.org/work/homeownership-program/