The state of Maryland is cutting the interest rate and boosting down payment assistance for its primary homebuyer assistance program.

Borrowers obtaining mortgages through the state's Maryland Mortgage Program will be able to obtain an interest rate of 4.25 percent, down from 4.5 percent previously, while the base amount for down payment and closing cost assistance will be raised to $5,000, up from $3,500.

The changes were announced Monday by Maryland Department of Housing and Community Development Secretary Raymond Skinner.

"Buying a home is still a good investment," Skinner said. "Right now is a great time to buy with lots of inventory from which to select, and we believe that by lowering our interest rate and increasing our down payment assistance, we are offering an attractive opportunity to first time homebuyers to make that investment and purchase a home."

The program is primarily targeted at first-time buyers, though repeat buyers can qualify if they purchase a home in a designated "targeted area." Borrowers are also required to participate in a homeowner education workshop in order to qualify for a mortgage.

The down payment and closing cost assistance is provided in the form of an interest-free loan that is paid back when the buyer sells the home, refinances or pays off the mortgage. The down payment and closing cost assistance may be supplemented with additional aid through other programs, including House Keys 4 Employees, an employer matching fund program; the Builder/Developer Incentive Program; and the Community Partner Incentive Program.

For more information, see the Maryland Mortgage Program web site.

Published on August 10, 2010