Maryland Department of Housing and Community Development Maryland SmartBuy October 2017 Maryland Department of Housing and Community Development

Maryland Department of Housing and Community Development Maryland SmartBuy Program objectives: Increase homeownership among first time millennial buyers. Dispose of state-held REO properties at higher price and faster pace Stablilize communities with higher rates of owner-occupied homes October 2017 Maryland Department of Housing and Community Development

Maryland Department of Housing and Community Development Maryland SmartBuy How it works: DHCD CDA has financed more than 10,000 loans, through its mission to provide mortgage financing to primarily first-time homebuyers in Maryland A small percentage of some of those financed properties return to our possession through foreclosure DHCD appraises the homes for overall condition, selecting homes in attractive markets that can be made move-in ready through enhancements like repainting, new carpet, and new appliances Our in-house review committee then reviews the home for suitability for the program. Once approved for the program, the home is listed for sale exclusively as SmartBuy for at least 60 days October 2017 Maryland Department of Housing and Community Development

Maryland Department of Housing and Community Development Maryland SmartBuy Who is eligible: First time homebuyers, with limited exceptions Buyers who meet the approval requirements of the Maryland Mortgage program, including completing a HUD certified homeownership education program Buyers who agree to stay in the home as owner occupant for five years to obtain the full student debt relief Buyers whose student debt loan obligations are entirely repaid at time of settlement October 2017 Maryland Department of Housing and Community Development

Maryland Department of Housing and Community Development Maryland SmartBuy Financing: TWO MORTGAGES 1ST Mortgage: A conventional amortizing mortgage of 95% of the sales price. 2nd Mortgage: A forgivable loan of up to 15% of the purchase price, which will be used to pay off the student debt. This is a 0% deferred loan with no payments, forgivable over 5 years at 20% per year. The balance becomes due upon sale or refinance. DHCD also offers optional third mortgage providing $5,000 in Down Payment Assistance (DPA) in a zero percent deferred loan, third lien position October 2017 Maryland Department of Housing and Community Development

Maryland Department of Housing and Community Development Maryland SmartBuy Who benefits: First time homebuyers with student debt Maryland neighborhoods—SmartBuy REO homes sell at more than 98% of market price on average Maryland DHCD, through accelerated sales of REOs at stronger prices October 2017 Maryland Department of Housing and Community Development

Maryland Department of Housing and Community Development Maryland SmartBuy Key metrics: 30 homes have settled or are under contract through the program Average purchase price is $209,500 Average debt forgiveness is $25,250 75 Days on market October 2017 Maryland Department of Housing and Community Development

Maryland Department of Housing and Community Development Maryland SmartBuy The program is: Innovative. Initiated by Gov. Hogan and approved by General Assembly in 2016 Replicable. Other states can use this as a model to help dispose of REOs at market prices/ Responsive, by helping first time homebuyers overcome student debt. Measurable. Approximately 40 homes will be sold via the program this calendar year. Beneficial, helping stabilize communities where property values have been negatively affected by foreclosure. October 2017 Maryland Department of Housing and Community Development

Maryland Department of Housing and Community Development Maryland SmartBuy Approved lenders, available properties, and other SmartBuy information on our website: http://mmp.maryland.gov/Pages/SmartBuy/default.aspx Maryland Department of Housing and Community Development