Alternative Financing?

     Everyone knows how tough it's gotten to get a 1st time home buyer into a home. The current lending environment has made it almost impossible for someone on a moderate income to purchase a home in a safe and moderately priced neighborhood. The challenges in this current market are not unlike those we experienced a few years ago. When the market was bustling, buyer's agents were trying to make their clients look like the seller's best choice. Now is no different. That is why we all need to be educated on the variety of programs and types of loans available to our clients. It's not enoughto just put your client in front of a lender, we need to know a little about how the lender works. By this i mean, we need to be on top of the changing trends and changing mortgage programs. Currently, lots of agents are using the non-profit organizations(ie..Genesis and Nehemiah) who receive money from the seller and pass it back to the buyer to cover closing expenses. This has been a great tool for the time being, but I really think the days of this type of circumventing the system are numbered. Besides, what will happen when the market stiffens up a bit and sellers are not reducing prices and not contributing to buyers' expenses? Maryland has many programs available to offset the expense of purchasing a home. There are several grant programs where buyers receive cash for closing costs or down payments, CDA (Community Development Administration) & D-SELP(Down payment & Settlement Expense Loan Program). There are loan programs that offer below market rates for buyer within a certain income bracket, CDA. There are also businesses that will contribute to their employees closing costs and the state will match it up to certain amounts, HK4E ( House Keys 4 Employees) .

     You might think that these programs are only for those with low incomes, but the limits on most of these programs are very generous. Te programs above are not the complete answer for a buyer who has demonstrated poor decision making, but they could mean the difference for someone just needing some help to get over the "hump". There are required classes for some of the different programs and they typically need to be completed prior to entering into a contract of sale, but one or two evenings is well worth it to someone who is only a few thousand dollars away from either buying a home or renewing a lease!