Maryland first-time home buyer programs: who qualifies and how

The main Maryland first time home buyer program is the Maryland Mortgage Program, run by the Maryland Department of Housing and Community Development. You get a 30-year fixed-rate mortgage from an approved lender, who adds down payment help, usually a 0% loan you repay later. To qualify, you need income under your county's limit, a homebuyer class and no other home at closing.

What help does the Maryland Mortgage Program offer?

Most Maryland Mortgage Program loans come with a second loan, at 0% interest, for your down payment, the part of the price you pay up front. The first mortgage is your main home loan, with the same interest rate for all 30 years, and the down payment help is the second, smaller loan:

Each down payment loan has a 0% rate and no monthly payments. The $6,000 loan can also pay closing costs. That $6,000 loan comes due all at once when your first mortgage ends. That happens when you sell the home, refinance (replace your mortgage with a new one) or pay the mortgage off. HomeStart's 6% loan is deferred for 30 years, which means no payments during that time. The 3%, 4% and 5% loans have no monthly payments either. Ask your lender: is the 3%, 4% or 5% loan due when I sell, refinance or pay off the first mortgage?

Example. On a $300,000 first mortgage, a 3% loan is $9,000 and a 5% loan is $15,000. You pay nothing on either loan each month, but you repay it when it comes due.

Say you choose the $6,000 loan and also get down payment help from an employer, builder or local government the program has approved. The program then matches that help with up to $2,500 more, as another 0% loan with no monthly payments.

How does Maryland SmartBuy pay off student debt?

SmartBuy pays off your student loans when you buy a home, up to 15% of the price or $25,000, whichever is less. The whole student debt of at least one borrower must be paid off at closing, the day you sign the final papers and the home becomes yours. If that debt is more than the limit, you pay the rest yourself. The payoff is a 0% loan with no monthly payments, and it is fully forgiven after five years if you still live in the home.

To use SmartBuy, you need at least $1,000 of student debt, a credit score of at least 720 and a SmartBuy-approved lender. You must be a first-time buyer, unless you buy in a targeted area, and take a homebuyer class. You can add one down payment option to SmartBuy. It can be the $6,000 loan, or the 6% loan if your income is at or under 50% of the area median income.

Who qualifies for the Maryland Mortgage Program?

Every buyer must meet the program's basic rules:

• Be at least 18 and have a valid Social Security number. You don't need to be a U.S. citizen.
• Own no other home or residential property at closing, and live in the home you buy.
• Have cash and savings worth no more than 20% of the price; more may affect whether you qualify, so ask your lender.
• Earn under the household income limit for your county, the most a household can earn and still qualify, counting every adult who will live in the home.
• Buy a newly built home only if it is in a Priority Funding Area, a place the state has marked for growth; check the address in the program's map.

A first-time buyer is someone who hasn't owned a home in the past three years, and can buy anywhere in Maryland. Repeat buyers can use Flex loans anywhere, or any of the program's loans in a targeted area. A veteran who was honorably discharged can use a one-time veteran exemption to buy without being a first-time buyer.

A targeted area is a part of the state where federal tax rules allow easier terms. Under federal tax law, it can be a census tract, a small neighborhood area the Census Bureau draws. The tract counts if at least 70% of its families earn 80% or less of the state's median family income. A targeted area can also be an area of long-term economic hardship that the state names and the federal government approves.

In a targeted area, you don't have to be a first-time buyer, the price limits are higher, and in some counties the income limits are higher too. Check an address in the program's mapper before you make an offer.

What are the income and price limits in Maryland?

The Maryland Mortgage Program's limits from June 24, 2026 depend on the county and household size. These are the limits outside targeted areas; the price limit, which the program calls the maximum acquisition cost, is the most the home can cost:

Baltimore City and Allegany, Caroline, Dorchester, Garrett, Kent and Somerset counties are targeted areas in full. There, the income limit is $164,520 for one or two people and $191,940 for three or more. The price limit is $955,922 in Baltimore City and $692,211 in the six counties. Your loan also can't be larger than the program's mortgage limit for your county, which is never more than $832,750.

Do you need a homebuyer class in Maryland?

Yes. Every buyer must finish a homebuyer class before the loan is approved, and the program suggests taking it before you sign a contract on a home.

Ask your lender which class it accepts, then book that one, because some loans accept only certain classes. Classes are taught by housing counselors that HUD, the federal housing department, approves. The two companies that buy most home loans also offer online classes: Fannie Mae's free HomeView course and Freddie Mac's CreditSmart. A housing counselor from the Consumer Financial Protection Bureau's counselor search can help you choose and get ready. To compare classes, see what homebuyer classes cover.

What other help is there in Maryland?

Many employers, home builders, community groups and local governments also give grants or loans, and the program lists the ones it works with by type. Montgomery County and Prince George's County have their own down payment programs through the Maryland Mortgage Program. Montgomery County also sells lower-priced homes by lottery, a random drawing: see how its moderately priced homes program works and check the housing lotteries open now.

The Maryland HomeCredit is a mortgage credit certificate, which lowers your federal income tax each year by part of the mortgage interest you pay. It can't be combined with the 1st Time Advantage loans.

How do you apply, step by step?

1. Find a state-approved lender in the program's lender directory, and ask how much you could borrow and which help you qualify for.
2. Ask which loan and down payment help fit your county, income, credit score and any student debt.
3. Take the homebuyer class your lender accepts, and keep the certificate.
4. Check the address in the program's mapper for a targeted area or a Priority Funding Area.
5. Compare other help in down payment assistance programs, and use our qualify check to see which homes for sale fit your household's size and income.

Never pay a fee to get a grant. The Federal Trade Commission says the government doesn't call out of the blue about grants, and no government agency will ask you to pay to get one. To see homes you can apply for now, search homes for sale.