Pathway To Purchase Program

Updated March 9, 2021

Get $10,000 in down payment & closing costs with Pathway To Purchase in 2020. We are a licensed Maryland real estate brokerage and Pathway To Purchase experts, here to walk you through the process!

(Looking for info on the Maryland Mortgage Program? That’s a different program.)

PATHWAY TO PURCHASE PROGRAM
BASICS

Ready to buy a house? Fantastic! For a limited time, ​​eligible homebuyers in Prince George’s County, Maryland can take advantage of an incredible homeownership program- PATHWAY TO PURCHASE. 

As a replacement for the My HOME Program, Prince George’s County released Pathways To Purchase which is available for 2020. The Pathway To Purchase Program is one of the many first time home buyer programs in Maryland. Pathway To Purchase provides first-time home buyers up to $10,000 in down payment and closing cost assistance. Home buyers can purchase a home anywhere in Prince George’s County, Maryland. 

Eligible residential properties include:

• new construction
• resale
• short sales
• foreclosures

Pathway to Purchase is a 0% interest loan program that must be paid back when the home is sold, transferred or ceases to be the primary residence of the buyer(s). However, the loan repayment has a 10% decrease per year. After 10 years the loan is forgiven and the lien is released.

Purchase Price Limits:
$337,000 for resale
$399,000 for new construction

APPLICANT ELIGIBILITY 

• Applicants must be first time homebuyers and must not have owned residential real estate, including cooperatives anywhere during the three years immediately preceding the date of the application to the PATHWAY TO PURCHASE program. (Investors or current owners of residential property are excluded from participation in this program).
• Applicants must be CREDIT WORTHY and able to qualify for a mortgage through a Participating Lender.
• Applicants must agree to live in the home being purchased as their principal residence.
• Applicants must attend an 8-hour housing counseling class.
• Applicant must have an eligible ratified Contract of Sale on a residential property located in Prince George’s County.

CREDIT

The Pathway to Purchase Program does not require a specific credit score. However, applicants must be able to meet all credit requirements or credit score benchmarks required by a Participating Lender to obtain a mortgage. 

Note: The Pathway to Purchase Program is not an alternative program for individuals with “challenged credit” or if you have been unable to obtain an approval for a mortgage by a Pathway to Purchase Participating Lender. 

HOUSEHOLD INCOME LIMITS 

Household income for qualification of assistance under the PATHWAY TO PURCHASE Program will be determined by calculating the income of all members of the household 18 years and above, regardless of whether the household member is an applicant for the first mortgage. 

For example, in the case of a husband and wife where the wife is the loan applicant because of more favorable credit, and the husband is not an applicant, the PATHWAY TO PURCHASE Program will count the income of both the husband and the wife in the eligibility decision.

Applicants for the PATHWAY TO PURCHASE Program must have gross annual household incomes at or below 80% of the area median, adjusted for family size (see Table I below). 

Table I

Household Size	Up To 80% Area Median
1	$70,600
2	$80,650
3	$90,750
4	$100,800
5	$108,900
6	$116,950
7	$125,000
8	$133,000

Annual household income is defined in 24 CFR 5.609, and is referred to as “Part 5 annual income.” The Part 5 definition of annual income is the gross amount of income of all adult household members that is anticipated to be received during the coming 12-month period, and income earned from assets. 

WHAT SHOULD I INCLUDE WHEN DETERMINING HOUSEHOLD INCOME?

Here are a few examples: 

General Category	Explanation
1) Income from wages, salaries, tips, etc.	The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services.
2) Business Income	The net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income.
3) Interest & Dividend Income	Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income.
4) Retirement & Insurance Income	The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount.
5) Disability & Unemployment & Income	Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation, and severance pay.
6) Alimony, Child Support, & Gift Income	Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling.
7) Armed Forces Income	All regular pay, special day and allowances of a member of the Armed Forces.

WHAT IS EXCLUDED WHEN DETERMINING HOUSEHOLD INCOME?

• Income of children 
• Foster car payments 
• Inheritance and Insurance Income
• Medical Expense Reimbursements
• Student financial aid
• Gifts
• Adoption Assistance payments
• Social Security income

PURCHASER’S MINIMUM CASH CONTRIBUTION

PATHWAY TO PURCHASE recipients must contribute 1.75% of the final purchase price or 50% of liquid assets over $3,000, whichever is greater. (Gift funds may not be used towards the 1.75% minimum cash contribution). 
NO WORRIES! We will help you figure this out.

Payments of any upfront costs by the purchaser including Earnest Money Deposit, lender application fees, appraisals, home inspection, housing counseling fee, hazard insurance, and termite inspection, may be credited to this requirement. 

In some cases, the purchaser’s contribution when considering EMDs (Earnest Money Deposits) and upfront costs, may exceed the required cash contribution, which is only a MINIMUM CASH REQUIREMENT, NOT A MAXIMUM REQUIREMENT. 

PATHWAY TO PURCHASE MORTGAGE | PROPERTY BASICS

ELIGIBLE PROPERTIES

Don’t stress, we will find you the right property! Single Family dwelling units, town houses and condominiums are all eligible for assistance under the PATHWAY TO PURCHASE Program. 

Eligible properties may be:
a. New Construction
b. Re-sales
c. Foreclosures
d. Short Sales

Seller must certify that property is owner occupied, vacant or not lawfully occupied by a tenant at the time of initial contract, and that seller has not unlawfully evicted a tenant occupant or refused to renew a lease in anticipation of an initial contract offer where the purchase is to be funded in part by PATHWAY TO PURCHASE funds. These certifications must be stated in an Affidavit signed by the Seller and attached as an addendum to the Contract of Sale. The form for the Affidavit will be provided by the PATHWAY TO PURCHASE Program.

ELIGIBLE ZIP CODES

All zip codes within Prince George’s County are eligible.

MAXIMUM PURCHASE PRICE

The maximum purchase price of homes utilizing PATHWAY TO PURCHASE assistance is: 
$337,000.00 for RESALES 
$399,000.00 for NEW CONSTRUCTION. 

Pathway To Purchase APPROVED LENDERS

Homebuyers must use an approved Pathway To Purchase Lender. Approved Participating Lenders are responsible for submitting applications for down payment and closing cost assistance to the Pathway To Purchase Program.

Note:  You must have an executed sales contract and a conditional 1st trust loan approval before your lender can apply for Pathway To Purchase Program down payment and closing cost assistance.

MORTGAGE

Applicants mortgage must be a fully amortized, fixed-rate mortgage. (No adjustable rate interest, interest only or negative amortization loans are acceptable). 

Applicants may use FHA or Conventional first mortgage loan products. Applicants may combine assistance from other down payment programs, for example, DSELP or CDA. Lender must provide an approval with the loan amount from 3rd party with the Pathway to Purchase submission package. This information is required to determine the Pathway to Purchase Program loan amount. The Pathway to Purchase Program loan amount is based on need up to $10,000. There is absolutely NO MONEY BACK to the purchaser at settlement. Pathway to Purchase loans will be placed in 2nd lien position on title.

There are four loan programs accepted with the Pathway to Purchase Program. The accepted loan programs are: 

• FHA  RECOMMEDNDED
• VA
• Maryland Mortgage Program
• Conventional Loan

LOAN TERM

The Pathway to Purchase loan has a 0% interest, deferred payment. (There will be no monthly payment on the PATHWAY TO PURCHASE loan.)

The Pathway to Purchase loan will be a deferred payment loan, secured on the property as a second trust, with the total amount due upon sale, transfer of the property, if the property ceases to be the primary residence of the borrower or if property doesn’t meet Pathway to Purchase guidelines when refinancing.

Purchaser Remains in HOME	Balance Due
	(As % of Total PATHWAYS TO PURCHASE loan Received)
Less than 1 year	100%
At least 1 year but less than 2 years	90%
At least 2 year but less than 3 years	80%
At least 3 year but less than 4 years	70%
At least 4 year but less than 5 years	60%
At least 5 year but less than 6 years	50%
At least 6 year but less than 7 years	40%
At least 7 year but less than 8 years	30%
At least 8 year but less than 9 years	20%
At least 9 year but less than 10 years	10%
Ten years or More	0%

LOAN FORGIVEN AFTER 10 YEARS. In the event of a default, the outstanding balance will accrue an annual interest at a rate of 5.75%.

Pathway To Purchase Required SELLER CONTRIBUTION

Sellers are encouraged to contribute up to 3% of the purchase price toward borrower’s closing costs. Borrowers are advised to consult with their lender before writing an offer to ensure that the seller contributions negotiated can be utilized. 

PRIMARY RESIDENCY RESTRICTIONS

Property must remain primary residence for a minimum of 10 years. At the closing of a Pathway To Purchase loan, the borrower will be required to sign documents agreeing to comply with the primary residency requirements.

Additionally, the Department of Housing and Community Development will require annual residency documentation to ensure compliance.

PATHWAY TO PURCHASE INSPECTIONS

HOUSING QUALITY STANDARD (HQS) INSPECTION

All homebuyers using Pathway to Purchase must pass a Housing Quality Standards (HQS) Inspection as part of the application process. (No worries! We will assist you with this step.)

The items listed below must be working or completed prior to the HQS Inspection.

• The unit must be empty/vacant from previous tenant.
• ALL Utilities (water, gas, electric) must be turned on for the completion of the inspection.
• No chipping or peeling paint inside or outside the unit.
• Stove must be clean, in working order and secured.
• Refrigerator must be clean and be in working order with a good door seal.
• There must be a permanently installed working heating system.
• Hot and cold running water in the kitchen and bathroom(s).
• There must be a shower or bathtub that works.
• There must be a flush toilet that works, is securely mounted and does not leak.
• The bathroom must have either an outside window or an exhaust fan vented to the outside.
• There must not be any plumbing leaks.
• There must not be any plugged drains (check for slow drains).
• All plumbing fixtures must have P-traps to prevent sewer gas from leaking into the unit.
• All windows and doors shall open and close as designed and must have working locks (if applicable).
• Doubled keyed dead bolts are not permitted on any doors.
• Each living space must have two means of fire egress (i.e. door & window)
• All electrical outlets/switches must have cover plates and be in good working condition.
• All ground fault circuit interrupters (GFCIs) must work properly.
• There must not be any missing, broken, or cracked windows.
• The roof must not leak. Indications of a leak are discolorations or stains on the ceiling.
• The hot water heater tank must have a temperature pressure relief valve with downward discharge pipe made
• of galvanized steel or copper tubing that is between six inches to eight inches from the floor or directed outside
• the unit (no PVC). CPVC is acceptable.
• The floor covering cannot be torn or have holes that can cause someone to trip.
• If there are stairs and railings, they must be secure.
• Four or more exterior stairs must have handrails 34 inches to 38 inches from the ground.
• Walk offs or porches 30 inches above grade must have guard rails 36 inches from the ground.
• There must be working smoke detectors properly mounted on each level of the unit including the basement and walk up attics.
• All security bars and windows must have a quick release mechanism.
• All sliding glass doors must have a lock or security bar on the door that works.
• All construction/rehabilitation (painting, carpet replacement, etc.) must be completed.
• The unit must be free from roaches or rodents.
• There must be stepping stones or walkway to the unit.

HOME INSPECTION

Per Pathway To Purchase Guidelines, borrowers are required to obtain a home inspection by a licensed home inspector and provide a copy of the invoice and the inspector’s license as proof that the home inspection was completed. (The inspection report is not required.)

PATHWAY TO PURCHASE + ASH | MCGINTY

7 Reasons to Work with ASH|MCGINTY Realtors®

ASH | MCGINTY Realtors® aren’t just agents. We’re professional members of the National Association of Realtors® (NAR), Maryland Association of Realtors®, Greater Capital Area of Realtors® and subscribe to the strict code of ethics.

1. Ethical service. We adhere to a strict code of ethics, which is based on professionalism and protection of the public. As an ASH|MCGINTY Realtor® client, you can expect honest and ethical service. The first obligation is to you, the client.
2. An expert guide. Buying a home requires dozens of forms, reports, disclosures, and various other documents. There’s a lot of industry jargon involved, so you want to work with a professional that can speak the language. Not to mention, a knowledgeable expert will help you prepare your best offer, and avoid unnecessary delays and costly mistakes. 
3. Objective information and opinions. An ASH|MCGINTY Realtor® can provide local information on utilities, zoning, schools, and much more. We will also provide objective, unbiased information about each property. By understanding both your needs and search area, we can also point out neighborhoods that you may not know much about, but might suit your needs.
4. Expanded search power. We can help you find opportunities not listed on search sites and help you avoid out-of-date listings that might be showing up as available online, but are no longer on the market.
5. Negotiation knowledge. There are many factors up for discussion in a deal. An ASH|MCGINTY Realtor® will look at various angles from your perspective, including crafting a purchase agreement that allows enough time for you to complete inspections and investigations of the property before you are bound to complete the purchase.
6. Up-to-date experience. Most people buy only a few homes in their lifetime, usually with quite a few years in between each purchase. Even if you’ve done it before, laws and regulations change. However, we have handled thousands of transactions..
7. Your rock during emotional moments. A home is so much more than four walls and a roof. For most people, your home represents the biggest purchase you’ll ever make. Having a concerned, yet objective, third party helps you stay focused on the issues that are most important to you.

Ready to get started with the PATHWAY TO PURCHASE PROGRAM? Complete the PATHWAY TO PURCHASE Buyer Questionnaire.

MORE ASSISTANCE AVAILABLE

We are here to help! Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Our real estate agents are estate experts with the Pathway To Purchase Program.In the maze of real estate contracts, mortgage documents, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more.

PATHWAY TO PURCHASE PROGRAM Buyer Questionnaire

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