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FAQ: Mortgage Purchase Program

Home > Housing Opportunities > Homeownership > Mortgage Purchase Program > FAQ: Mortgage Purchase Program

HOC's Single Family Mortgage Purchase Program (MPP) helps Montgomery County residents achieve their dream of homeownership by making purchasing and owning a home more affordable.

  • No more than 15% of the property can be used in a trade or a business.
  • HOC does not allow non-occupant cosigners on the mortgage.
  • If the home is sold within nine years after purchase, the seller may be required to pay a Recapture Tax to the federal government.
  • FHA loans may be assumable by another income eligible first-time home buyer.
  • You can pay off the first mortgage at any time without a penalty.
  • Does not control the sales price for a resale, unless an MPDU property.
  • Does not control when the owner can sell.

Feel free to call HOC at (240) 627-9798 or email homeownership@hocmc.org

Typically no, however, if you have been in the FSS (Family Self Sufficiency Program) for two or more years and have an income of $40,000 and above, you may be eligible to participate if you are one of the randomly selected families chosen by HOC.

No. HOC is for Montgomery County properties only. If you plan to purchase a home in another county, call that county’s local housing authority to see if it has a program similar to HOC.

No. The MPDU Program and HOC’s First Trust Mortgages are two different programs run by two separate agencies. HOC offers financing once you have a contract on a home.

MPDU offers below market priced homes through builders. https://www.montgomerycountymd.gov/DHCA/housing/singlefamily/mpdu/

Barring no complications, the loan process should take no more than 45 days.

This is when you sign all of the loan documents and you become the owner of the property.

An appraisal is a formal written estimate of the current market value of a home. It also is referred to as the process by which a value estimate is obtained.

Yes. HOC requires a home inspection for all resale properties. A home inspection report identifies potential problems, items that need to be repaired or replaced, and an estimate of the useful life of major systems and equipment. Your contract should be contingent upon your home inspection.

  1. Downpayment: The difference between the sales price and your mortgage amount.
  2. Closing costs: Various lender fees, legal and recording fees paid at settlement.

No. Once you get the pre-qualification or pre-approval letter you have to find the property yourself by contacting a REALTOR®, builder or homeowner selling their property and sign a contract to purchase (ratified contract).

The lender will estimate this amount at application. You will need enough for the down payment and closing costs.

  1. Pre-Qualifying: The lender evaluates how much of a house you can afford prior to finding a property. It is based on information you give and may not involve a credit review.
  2. Pre-Approval: A firm commitment by the lender of credit approval. It is given to you prior to finding a property.

Your income & debt will determine the amount you may qualify for. The lender will determine this during the application.

The following and any other information as requested by the lender:

  • Most recent (three years) federal tax returns of all borrowers.
  • Most recent two months’ bank statements.
  • Verification of all liquid assets.
  • Employment/Income verification. Two most recent pay stubs and two years W-2’s (Needed for all household members whether on the loan or not for eligibility determination).
  • Prior bankruptcy, provide a copy of the petition.

If the lender does not call you, please feel free to contact any of our other lenders or call or email HOC.

No. Once you have contacted one of HOC’s participating lenders, you will be asked to complete a loan application. The lender will pre-qualify or pre-approve you and advise how much you can afford.

No. The amount of income you need to qualify will depend on the size of the mortgage you want. Your total household income can not exceed the maximum income. (Maximum Income includes all members of the household, 18 years of age and older who have an income).

Yes. Rates are determined by HOC and only participating lenders have HOC financing. To get HOC’s financing, you must use a lender that is participating in the program.

First time home buyer means not having an ownership interest in a primary residence anywhere during the last 3 years. All adult occupants of the property must be a first time home owner.