To begin understanding the
First Time Home Buyer Programs found in Annapolis, 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. |