Leggett Announces Loan Program for Home Buyers
Individuals can receive interest-free loans up to $40,000 to pay for a down payment and closing costs when buying a new home in Montgomery County
Montgomery County Executive Ike Leggett announces the county's new home ownership assistance program Friday at the North Bethesda Marriott Hotel and Conference Center
Montgomery County Executive Ike Leggett on Friday unveiled a new initiative designed to help prospective homebuyers overcome often-expensive down payment and closing costs when purchasing a home in the county.
The Montgomery Homeownership Program provides homebuyers who qualify with up to a $40,000, interest-free loan to pay for the down payment or closing costs on a home that costs up to $429,000 in the county—or in some more expensive county home markets—up to $525,000.
“One of the biggest challenges for homebuyers is saving for down payment and closing costs,” Leggett said Friday morning during a press conference at the Affordable Housing Conference of Montgomery County at the North Bethesda Marriott Hotel and Conference Center. “And Montgomery County has the highest housing cost in Maryland. It’s particularly challenging to save enough funds to purchase a new home in Montgomery County.”
Leggett said home ownership provides a predictable and affordable way for families to pay for housing. The down payment loans are repaid when the home is sold, Leggett said.
"A typical family will save about $150 per month throughout the Montgomery Homeownership Program," Leggett said.
The county has allocated $1 million for the program that launched this month. One- or two-member households can qualify for a loan if their annual income is less than $130,320 while three- or more member households can qualify with an income less than $152,040.
County officials said Friday the program is designed to help those homeowners who shy away from buying a home because even though they can afford a monthly mortgage payment, they don’t have the funds to pay the initial costs.
“The down payment is an absolutely critical part for people in terms of home ownership,” County Council member Marc Elrich said. “One reason I helped tenants organize to buy their own buildings was that ownership is less expensive than rent in many cases.”
He added that owning a home can help families accumulate equity that can later be used to pay for their retirement and children’s college education.
The county partnered with the state’s Department of Housing and Community Development on the program, which will administer the program and help homebuyers access federal tax credits and other benefits available to first-time and other homebuyers.
State Housing Secretary Ken Holt said Friday the program will make buying a house “a reality for many who thought it would always be out of reach.”
Buyers approved for the county program will also receive a below-market rate Maryland Mortgage Program Loan to complete the buying process.
Elrich said the county had been developing the details for the program for the past two years. The county previously offered up to $5,000 in down payment assistance, Elrich said.
County Council President Roger Berliner said the program will provide an opportunity for renters to continue to live in the county by buying their own homes.
“The county’s program, by going up to $40,000, will allow people to close the deal they actually need to close to buy a home in Montgomery County,” Berliner said.
The county has more information about how individuals can apply for the loans on its Montgomery Homeownership Program website.