Gov. Larry Hogan, building on the SmartBuy Initiative for Maryland homebuyers, announced increases to student debt relief and home loan options for residents purchasing homes in the state.
The expanded funds will allow up to $50,000 in student loan debt elimination and additional down payment and closing cost loans for borrowers with low incomes. According to the Department of Housing and Urban Development, those median incomes in Maryland would be no higher than $41,150 for a single person or $58,750 for a family of four.
Hogan said that he expects this expansion to aid more families across the state.
“As the country continues to deal with an inflation crisis, we are again taking steps to provide relief to Marylanders,” Hogan said in a statement. “Our SmartBuy initiative — the first of its kind in the country — has established a national model for removing persistent roadblocks to homeownership and financial security, and this expansion will allow us to help even more families.”
Under the Maryland Mortgage Program, up to 95% of the purchase price of the property would need to be financed by a 30-year, conventional Fannie Mae or Freddie Mac mortgage. The buyer would need to have a 5% down payment.
To eliminate student loan debt, the borrower would thing take out a second loan for five years. The loan could be up to 15% of the purchase price of the property but not more than $50,000. The loan would be used to erase the student loan. Previously, the program eliminated up to $30,000.
Additionally, those with income at or below 50% of the average median income can get a 6% down payment and closing cost loan from the state — those who want a $6,000 or 4% down payment and closing cost loan will have access to that option.
Maryland Department of Housing and Community Development Secretary Kenneth C. Holt said that the five-year-old program is specifically tackling student debt as a “significant barrier for many potential homeowners.”
“As interest rates increase and demand drives housing prices up, the State of Maryland is always looking for innovative ways to help make homeownership affordable,” Holt said.
The program has provided roughly $5.1 billion in mortgage assistance, $121.7 million for down payments and $25 million in debt relief.