First Time Maryland Homebuyer
Sunday, October 28th, 2007
Thank you for everybody that came to the GCAAR Free Contracts Basics class. It was a great class. As always whenever their is a free class about half show up. We had 135 registered - something in that range, and we had 50 actually show up. But I was very happy with everyone that showed up. We had some great questions during that class. One of the questions was on the Maryland first time homebuyer tax exemption.
The entire confusion was over the difference between the federal and state law speaking about the definition of first-time homebuyer. To make it very simple I have explained below what all the laws say about “First-time Homebuyer”
Federal law says that an individual is a first-time home buyer when they have had ” . . . no ownership in a principal residence during the 3-year period ending on the date of purchase.” While Maryland law says “. . . individual who has never owned in the State”
So if you want to be exempt from paying your portion of the State Transfer Tax (.25% of the Sales Price) you can never have bought a home in MD, even within a 3 year period, which is allowed in the federal definition.
Federal Guidelines:
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 Guidelines:
Maryland law defines First-time home buyers as the following:
1. “First-time Maryland home buyer” means an individual who has never owned in the state residential real property that has been the individual’s principal residence.
2. Affidavit must be signed which says that they will be occuping their principal residence OR that the grantee is on title only as a purchase money mortgage and will not occupy
3. If the property is used except by primary residence the elimination of transfer tax to the buyer is not available.
4. State transfer Tax will be reduced from .5 to .25 which will be entirely paid by the seller.
5. 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.
To read a document that explains the MD Transfer Tax Exception in entirety you can go here
The Clue report by far is the largest change made by the insurance industry in attempts to reduce loss, but at whose cost? The Clue report is similar to a database that keeps track of all of the insurance claims filed by the homeowner, as well as phone calls. Every time a homeowner just makes a phone call, no matter what the substance of that phone call; it goes onto the homeowner’s clue report. 
