Down payment assistance in Prince George's County: what to do when Pathway to Purchase is out of funds

A while back I wrote about Pathway to Purchase, the Prince George's County program that puts up to $50,000 toward a down payment and closing costs.

Here is where it stands today. Pathway is out of money, and the county doesn't expect new funding until November at the earliest.

Two other county programs have funding right now, and both allow higher incomes than Pathway does.

Is Pathway to Purchase still available?

The program still exists. It just has nothing to lend at the moment.

Its income limit has always been the tight part. Pathway caps household income at 80% of area median income, which is $93,050 for one person and $132,900 for a family of four.

If you earn more than that, the next two programs are where to look.

What is the Critical Workforce Housing Assistance Program?

This one is built for essential workers. The county names teachers, police officers, firefighters, emergency medical personnel and healthcare professionals, along with other critical workforce employees.

It offers up to $50,000, or 25% of the purchase price, whichever is less.

Household income can run up to 120% of area median income. That's $139,500 for one person and $199,300 for a family of four.

The money comes as a loan at 0% interest with no monthly payment. It forgives at 10% a year, the same as Pathway, so after 10 years you owe nothing. If you sell the home, transfer it, or stop living in it before then, you pay back the part that hasn't been forgiven yet.

Any residential property in Prince George's County qualifies, including resales, foreclosures, short sales and new construction.

What is the Homeownership Equity Program?

This one has no job requirement. It offers up to $30,000, with the same 120% income limit.

What's different is location. The home has to sit inside the Capital Beltway, I-495.

It's also a 0% loan with no monthly payment. It forgives at 20% a year, so after 5 years you owe nothing. If you sell, transfer the home or move out before then, you pay back the part that hasn't been forgiven yet.

How much can you earn and still qualify?

What else do you have to do?

Both programs use the same debt rules. Your housing payment can't be more than 35% of your income, and all your monthly debts together can't be more than 47%.

You also have to complete an 8-hour housing counseling course from a HUD-certified agency. Classroom and online both count.

The home has to be your primary residence.

How do you apply?

You don't apply to the county, and calling them for an application will only send you back to a lender.

The order matters:

1. Get pre-approved with a lender from the county's participating lender list.
2. Take the 8-hour counseling course.
3. Find the home and get a ratified contract.
4. Your lender gets a conditional approval on your first mortgage, then submits your assistance application to the county.

One timing rule trips people up. The county won't accept an application unless at least 21 business days remain on your contract, and federal holidays don't count. Build that into your settlement date from the start.

Which one fits you?

After helping hundreds of homeowners in the DMV over the last 24 years, I've learned that most people rule themselves out on income without ever checking the actual number. The 120% limits above are higher than most buyers expect.

If you're buying in Prince George's County, call or text our office at 240-255-9027 and we'll set up a brief 15 minute call with me or another member of The Heyward Homes Team. We'll look at your income, your price range and which program fits. Our preferred lender, 1st Step Financial Services is an approved lender for both of these programs, so I can handle the pre-approval and the county application from there.

Program terms come from Prince George's County Department of Housing and Community Development materials. Funding, income limits and program rules change, so confirm current details with the county or an approved participating lender before relying on them.