To begin understanding the First Time Home Buyer Programs found in Annapolis, Maryland and how you might benefit from them, you must first start by understanding the different meanings of the term "First Time Home Buyer" .  The Federal and State governments define the term differently and some of the programs then add additional qualifiers to the base definitions.  The end result, you can qualify as a First Time Home Buyer under one program but not be eligible in another program.

Federal law defines "First Time Home Buyer" contained in HUD ML# 96-48 as:

1.  An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers.)

2.  A single parent who has only owned with a former spouse while married.

3.  An individual who is a displaced homemaker and has only owned with a spouse.

4.  An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.

5.  An individual who has only owned a property that was not in compliance with State, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure.

Maryland state law for the purchaser's exemption from paying the Maryland State Transfer Tax defines First Time Home Buyer in the Annotated Code of Maryland, Tax-Property Article, §13-203(b)(1) and (2) as an individual who has never owned in the State residential real property that has been the individual's principal residence. If there are two or more grantees, this subsection does not apply unless each grantee is a First Time Maryland Home Buyer or a co-maker or guarantor of a purchase money mortgage or purchase money deed of trust as defined in §12-108(i) of the Maryland Tax-Property Article for the property and the co-maker or guarantor will not occupy the residence as the co-maker's or guarantor's principal residence.

The Maryland Lender's Manual for the Maryland Mortgage Programs (MMP), dated January 11, 1999, § 2, paragraph 2.1-4 incorporates the Federal law definition and adds that:

1.  Borrowers purchasing in non-targeted areas must meet the Federal definition of First Time Home Buyer.

2.  Borrowers purchasing in targeted areas do not need to meet the Federal definition. However, they must sell or transfer their interest in any real property they own prior to the settlement on the MMP loan.

3.  Individuals who are separated or divorced and had an interest in real property during the last three years may be eligible if they can document that they did not live in the property during the last three years. In addition, they must no longer have title to the property or will divest themselves of title to the property before the closing of the MMP loan.

Exclusions:
A "present ownership interest" in a principal residence excludes:

• an ordinary lease, with or without a purchase option;
• the interest of a buyer under a standard residential purchase contract;
• an expectancy to inherit property; or
• a remainder or reverted interest.

A mobile home occupied as a borrower's principal residence will not disqualify the borrower unless the mobile home is/was permanently attached to real property owned by the borrower.

Targeted Areas:
The prohibition against borrowers having had a "present ownership interest" in their principal residence does not apply to borrowers purchasing homes in the federally designated targeted areas. They may no longer have title to the property or will divest themselves of the property before closing of the MMP loan.

Local governments or specific program administrations may add additional qualifiers to the First Time Home Buyer definitions depending upon the geographic focus of the program and/or the home buyer the program is intended to assist.