Montgomery County Homeownership Assistance Fund Phase Six Announced (McHAF)

As a result of five very successful McHAF programs, the Housing Opportunities Commission (HOC) is pleased that they will again offer the Montgomery County Homeownership Assistance Fund (McHAF) to assist eligible homebuyers purchasing a home in Montgomery County. HOC is releasing $1.5M from the Montgomery County Department of Housing and Community Development to fund this program.

The Montgomery County Homeownership Assistance Fund (McHAF) in combination with HOC’s MPP will provide substantial down payment and closing cost assistance granting up to 40% of the qualifying income for a maximum of $25,000.

Let's take a quick example. A buyer wants to write an offer for $500,000 and needs 3% for the down payment or $15,000. The closing costs are approximately $17,000 and the program will help with $25,000. The out of pocket cost to the buyer is $7,000 ($15k + $17k -$25k) rather than $32,000. That is a HUGE savings to the buyer not to mention it will help make your offer stronger if you don't have to ask for seller help.

Montgomery County Homeownership Assistance Fund

• Montgomery Homeownership Program Assistance Funds will be a second lien at zero percent and forgiven after 10 years of occupancy in the home.
• Maximum assistance will be 40% of total qualifying income up to a maximum of $25,000 (buyer's qualifying income has to be around $63,000 for the maximum $25,000 assistance).
• Down payment funds may be used for down payment and/or closing costs.
• Home buying counseling must be completed.
• No minimum contribution by the buyer.
• Reduced mortgage insurance rates for conventional loans.
• Borrowers must meet all agency requirements with a minimum 640 credit score and allowable 50% debt to income ratio with a credit score above 680.
• Must be a first time home buyer defined as having not owned a home in the past three years.
• Buyers that work in Montgomery County are also eligible for a $10,000 loan for closing costs repaid back over ten years at an interest rate of 5%. The loan amount is calculated at 5% of the sales price.
• Income limits of $119,532 for a 1 person household, $170,760 for a two person household and $199,220 for a three person household or more.
• Maximum loan limit of $726,200 and maximum sales price of $806,598.
• Buyer cannot have more than 20% of the sales price in liquid assets. A liquid asset is defined as something that can be readily converted into cash.

As always, please feel free to contact us with any questions or to begin the prequalification process with one of our expert Preferred Lenders.