Options for First-Time Homebuyers in DC, Virginia, and Maryland

Options for First-Time Homebuyers in DC, Virginia, and Maryland

  • 03/14/23

Congratulations on your decision to become a homeowner! Buying a home in Maryland, DC, or Virginia, in areas such as Arlington or Silver Spring can be daunting. Thankfully, with the right knowledge and resources, it is an exciting and rewarding experience.

The agents at The Rutstein Group have outlined everything you need to know about the first-time home buyer programs available in DC, Virginia, and Maryland. We'll discuss down payment assistance programs, mortgage tax credits, and other incentives that can help make buying a home more affordable and simplified. We'll also provide some tips on how to maximize your chances of success when applying for these programs. So whether you're just starting to explore your options or you're ready to start the application process, read on for everything you need to get started.

Maryland First-Time Home Buyer Programs

There are numerous programs and credits as a first-time home buyer in Maryland to utilize. Learn the different programs available, eligibility criteria, and everything you need to know to make the most of these opportunities.

Maryland Smartbuy 2.0

Designed to help homebuyers with qualifying student debt, the Maryland SmartBuy program (MMP) finances the payoff through the purchase of move-in-ready homes owned by the state. The Maryland SmartBuy 2.0 expands this opportunity by supporting homebuyers pursuing any home that meets Maryland Mortgage Program guidelines. For a limited time, this program provides Maryland students with the opportunity to purchase a home with SmartBuy while also making more homes eligible for relief from student debt.

Maryland Mortgage Program

The Maryland Mortgage Program (MMP) offers 30-year fixed-rate home loans to approved buyers investing in Maryland real estate. Although the long-term loans offered are comparable to many other home loan programs available, MMP distinguishes itself by virtue of its unique range of financial incentives and aids that open many doors to first-time home buyers.

Maryland Homecredit

Certain Maryland homebuyers may be eligible to receive a Maryland Homecredit mortgage credit certificate from the state's Department of Housing and Community Development. The certificate enables homeowners to claim federal tax credit at 25% of their annual mortgage interest payments, culminating in tens of thousands of dollars in savings over the course of a loan.

Washington DC First-Time Home Buyer Programs

From down payment assistance to tax credits and grants, we've got you covered on everything you need to know about the incredible opportunities awaiting you as a first-time home buyer in D.C.

DC Open Doors

Offering competitive interest and mortgage insurance costs rates on first-trust mortgages, the DC Open Doors (DCOD) program empowers first-time buyers to take the leap into home ownership. The DCOD program provides financial support through a deferred 0% non-amortizing loan, wherein there are no monthly payments. Said loan is payable under any of the following circumstances: 30 years from the loan closing date, upon the sale or transfer of the home, in the case that the property is no longer the owner's primary residence, or during the refinancing of the owner's first trust mortgage. Although you don't need to be a first-time homebuyer to qualify for the DC Open Doors program, you must purchase a home within the District of Columbia in order to participate.

The Mortgage Credit Certificate

The Mortgage Credit Certificate (MCC) incentivizes first-time homebuyers to invest in District of Columbia real estate by offering qualified borrowers the opportunity to claim a federal tax credit of 20 percent of the mortgage interest paid every year. Qualifications include income limitations, and the property must be a single-family home.

The Home Purchase Assistance Program

The DCHFA works in conjunction with the DC Department of Housing and Community Development to help first-time homebuyers through the Home Purchase Assistance Program (HPAP), which offers closing cost and down payment support through interest-free loans to approved applicants. Said loan applies only to primary residences, including single-family homes, condos, and cooperative units.

Virginia First-Time Home Buyer Programs

Fortunately, Virginia offers a range of assistance programs tailored to support and empower first-time Virginia home buyers on their journey to homeownership including the VHDA Down Payment Grant, VHDA FHA Plus loan, and the VHDA Mortgage Tax Credit Certificate.

VHDA Down Payment Grant

If you're a first-time buyer in Northern Virginia with a household income of $97,520 or less for one or two people or $113,840 or less for three or more people, you could qualify for a VHDA Down Payment Grant of 3 to 3.5 percent of the home price. You may be eligible for the grant if your home is worth less than $500,000.

First-time home buyers in Northern Virginia who have a FICO score above 660 and can demonstrate their ability to repay a loan often choose the Fannie Mae loan, which only requires a 3 percent down payment and has no mortgage insurance.


For first-time homebuyers who do not qualify for the VHDA Down Payment Grant, the VHDA FHA Plus loan offers a down payment of 3 to 5 percent through a second mortgage loan to be repaid at a low-interest rate over the course of 30 years. For families in Northern Virginia, the FHA Plus program has a maximum income of $125,700 for one or two people and $146,700 for three or more individuals. The maximum eligible home price is $500,000.

VHDA Mortgage Tax Credit Certificate

First-time home buyers who qualify for both the VHDA loan program and the FHA Plus program are also eligible for the VHDA Mortgage Tax Credit Certificate. As long as the borrowers maintain possession of the loan, they can take advantage of this tax credit. Rather than a deduction on their taxes, this gives them credit for the first 20 percent of mortgage interest paid, although a deduction is still available for the remaining 80 percent of the mortgage interest paid. This credit is only available to those who have a tax liability, which many upper-income earners in Northern Virginia may qualify.

Tips on how to apply to these programs

  • Be sure to research the eligibility requirements for each of these programs and make sure you meet them.

  • Prepare all necessary paperwork, including proof of income, credit history, identity documents, and other relevant information.

  • Make an appointment with a qualified mortgage lender in your area who can help you understand which programs best suit your needs and guide you through the entire application process.

  • Consider taking advantage of free counseling services to help you better understand the entire home-buying process and make decisions based on your unique financial situation.

  • Be sure to submit all necessary documents promptly and stay in contact with your lender throughout the application process.

  • Make sure you have a thorough understanding of the terms and conditions of each program before signing any documents.  This will help ensure that you are making the most informed decision possible when it comes to buying your first home.
The Rutstein Group would be happy to help you take advantage of the first-time homebuyer programs available in DC, Virginia, and Maryland. We know the ins and outs of the real estate market and can guide you to the perfect property for your needs. Whether you’re interested in Logan Circle, Capitol Hill, or Arlington real estate, contact us today to get started on your search for the perfect home.

*Header photo courtesy of Unsplash

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