To begin understanding the First Time
Home Buyer Programs found in Rockville, Maryland and
how you might benefit from them, you must first start
by understanding the different meanings of the term "First
Time Home Buyer" . The Federal and State governments
define the term differently and some of the programs
then add additional qualifiers to the base definitions. The
end result, you can qualify as a First Time Home Buyer
under one program but not be eligible in another program.
Federal law defines "First Time Home Buyer" contained
in HUD ML# 96-48 as:
1. An individual who has
had no ownership in a principal residence during
the 3-year period ending on the date of purchase
of the property. This includes a spouse (if either
meets the above test, they are considered first-time
homebuyers.)
2. A single parent who has only owned with a
former spouse while married.
3. An individual who is a displaced homemaker
and has only owned with a spouse.
4. An individual who has only owned a principal residence not permanently
affixed to a permanent foundation in accordance with applicable regulations.
5. An individual who has only owned a property that was not in
compliance with State, local or model building codes and which cannot
be brought into compliance for less than the cost of constructing a permanent
structure.
Maryland state law for the purchaser's exemption from
paying the Maryland State Transfer Tax defines First
Time Home Buyer in the Annotated Code of Maryland,
Tax-Property Article, §13-203(b)(1)
and (2) as an individual who has never owned in the State residential
real property that has been the individual's principal residence. If
there are two or more grantees, this subsection does not apply unless
each grantee is a First Time Maryland Home Buyer or a co-maker or guarantor
of a purchase money mortgage or purchase money deed of trust as defined
in §12-108(i) of the Maryland
Tax-Property Article for the property and the co-maker or guarantor
will not occupy the residence as the co-maker's or guarantor's principal
residence.
The Maryland Lender's Manual for the Maryland Mortgage Programs (MMP),
dated January 11, 1999, § 2, paragraph 2.1-4 incorporates the
Federal law definition and adds that:
1. Borrowers purchasing in non-targeted areas
must meet the Federal definition of First Time Home
Buyer.
2. Borrowers purchasing in targeted areas do
not need to meet the Federal definition. However, they
must sell or transfer their interest in any real property
they own prior to the settlement on the MMP loan.
3. Individuals who are separated or divorced
and had an interest in real property during the last
three years may be eligible if they can document that
they did not live in the property during the last three
years. In addition, they must no longer have title
to the property or will divest themselves of title
to the property before the closing of the MMP loan.
Exclusions:
A "present ownership interest" in a principal residence
excludes:
- an ordinary lease, with or without a purchase option;
- the interest of a buyer under a standard residential
purchase contract;
- an expectancy to inherit property; or
- a remainder or reverted interest.
A mobile home occupied as a borrower's principal residence
will not disqualify the borrower unless the mobile home
is/was permanently attached to real property owned by
the borrower.
Targeted Areas:
The prohibition against borrowers having had a "present ownership interest" in
their principal residence does not apply to borrowers purchasing homes in the
federally designated targeted areas. They may no longer have title to the property
or will divest themselves of the property before closing of the MMP loan.
Local governments or specific program administrations may add additional qualifiers
to the First Time Home Buyer definitions depending upon the geographic focus
of the program and/or the home buyer the program is intended to assist. |
