Buying your first home in Maryland can feel daunting, with a competitive real estate market and home prices on an upward trend. In the past year, housing prices in the state have increased more than 5 percent, while the number of houses sold is up by almost 8 percent, according to Redfin.
First-time homebuyers in the state can take advantage of programs offered through the Maryland Department of Housing and Community Development. Let’s break these programs down and cover other assistance you may be eligible for.
Maryland homeownership statistics
- Median home price in the state, as of January 2025: $408,800 (Redfin)
- Median down payment in the state, as of December 2024: $67,000 (Attom)
- Most affordable counties: Allegany, Somerset, Baltimore City, Dorchester, Wicomico
Maryland first-time homebuyer programs
The Maryland Department of Housing and Community Development’s Maryland Mortgage Program (MMP) offers several options for aspiring homeowners.
Maryland Mortgage Program (MMP) 1st Time Advantage Direct
Maryland’s 1st Time Advantage Direct loan, a 30-year, fixed-rate mortgage, offers competitive, low-interest rate loans for first-time homebuyers. It’s also open to repeat buyers in targeted areas and veterans using their exemption for the first time. This loan can be paired with an external source of down payment assistance (DPA), but can’t be used in conjunction with a mortgage credit certificate.
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- Minimum credit score of 640
- Household income can’t exceed income limits (vary by family size and county)
- Mortgage amount can’t exceed certain limits (vary by county)
- Debt-to-income (DTI) ratio can’t exceed 50 percent for conventional loans (or 45 percent for most other loans)
- Can’t have liquid assets that exceed 20 percent of the home’s purchase price
- Must take a homebuyer education course
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Pros
- More affordable interest rates
- Open to first-time and repeat buyers (in targeted areas)
- More than 100 participating lenders
Cons
- Down payment assistance isn’t available — you’ll need to find an external source
- Can’t be used with a mortgage credit certificate
MMP Flex Direct
Maryland’s Flex Direct loans are similar to the 1st Time Advantage loans, with the main difference being that they’re offered for repeat homebuyers without any exceptions. These mortgages don’t come with down payment assistance, but other Flex loans do (more on that later).
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- Minimum credit score of 640
- Household income can’t exceed income limits (vary by family size and county)
- Mortgage amount can’t exceed certain limits (vary by county)
- Debt-to-income (DTI) ratio can’t exceed 50 percent for conventional loans (or 45 percent for most other loans)
- Can’t have liquid assets that exceed 20 percent of the home’s purchase price
- Must take a homebuyer education course
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Pros
- More affordable interest rates
- Open to all first-time and repeat buyers as long as you don’t own any other real estate at the time of closing
- More than 100 participating lenders
Cons
- Doesn’t provide down payment assistance
Maryland down payment assistance and grants
Maryland SmartBuy 3.0
The state of Maryland offers a unique, specific program for those with student loan debt. If you owe at least $1,000 in student loans, the SmartBuy 3.0 program can help you get a mortgage and pay off that debt in one transaction. The amount you can apply to student loan debt payoff is up to 15 percent of the home’s purchase price, with a cap of $20,000. This is a zero-interest loan, forgivable after five years.
You can also receive down payment assistance through the SmartBuy 3.0 program. The funds are provided as a zero-interest, deferred DPA loan. You can choose between a $6,000 DPA loan or, if you earn less than 50 percent of the area median income (AMI), a DPA loan equal to 6 percent of the first mortgage.
To qualify, you must meet all the requirements for the Maryland Mortgage Program, and the transaction must fully pay off your student debt.
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Pros
- Repayment isn’t required
- More than 80 participating lenders
Cons
- Only available for conventional loans
- Minimum credit score requirement is 720, which is higher than other loans
HomeAbility
If you or a member of your household is living with a disability, the HomeAbility program offers two separate loans:
- A primary mortgage in the form of a 30-year conventional loan for 95 percent of the purchase price.
- A secondary lien in the form of a zero-interest loan for up to 25 percent of the price (with a maximum of $45,000) to cover down payment and closing costs.
Payments on the secondary lien are deferred for the life of the primary mortgage, but they’re due in full if the home is sold, refinanced, paid off or ownership is transferred.
To qualify for HomeAbility, you must submit documentation to prove the disability.
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Pros
- Assistance funds can be used for a down payment or closing costs
- Open to a variety of property types, including single-family houses, townhouses, condos and modular homes
Cons
- Funds on the secondary lien must be paid back when you move or sell, refinance or transfer the home
1st Time Advantage 6000 and Flex 5000
The 1st Time Advantage 6000 provides $6,000 to use toward your down payment and closing costs, and the Flex 5000 program provides $5,000 to use towards those costs. The funds come in the form of a zero-interest second mortgage. You won’t have to make any payments on the second mortgage until your first mortgage term ends, either when you pay the loan off in full, refinance it or sell the home. At that point, you must repay the funds.
Through these programs, you can also receive a “partner match” if you’ve obtained other down payment assistance, such as funds or a grant from an employer, community organization, home builder or local government. These programs will match that assistance, up to $2,500, through an additional zero-interest second loan.
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Pros
- Funds can be used for a down payment or closing costs
- Open to first-time and repeat buyers (Flex 5000 only)
Cons
- Funds are repayable when you move, sell, refinance or transfer the property
1st Time Advantage 3% and Flex 3%
The 1st Time Advantage 3% and Flex 3% loans provide a zero-interest second mortgage, equal to 3 percent of your first mortgage, as down payment assistance. Like 1st Time Advantage 6000 and Flex 5000, they are deferred liens, and eligible for down payment partner matches.
1st Time Advantage also offers 4% and 5% down payment assistance loans for those who qualify.
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Pros
- Money can be put toward a down payment or closing costs
- Open to first-time and repeat buyers (Flex 3% only)
Cons
- Must repay the loan when you move, sell, refinance or transfer the home
HomeStart
For those at or below 50 percent AMI, Maryland offers a zero-interest, deferred DPA loan of 6 percent of the home’s purchase price. You’ll need to use it with an MMP first mortgage. Like other Maryland DPA loans, this one is due in full once the primary mortgage is paid off or refinanced, the home is sold or there’s a change in ownership.
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Pros
- Competitive interest rates
- Open to first-time and repeat buyers (in targeted areas)
- More than 100 approved lenders
Cons
- Loan isn’t forgivable; funds must be repaid when you pay off the first mortgage (or if you move, refinance, sell or transfer ownership)
City-specific homebuyer assistance programs
Montgomery Homeownership Program
If you’re looking to live in Montgomery County — the neighboring county to the nation’s capital — the Montgomery Homeownership Program offers up to $25,000 of down payment and closing cost assistance. The money is a zero-interest deferred loan that is due on sale, refinance, ownership transfer or full payment of the mortgage.
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- Must meet the requirements for an MMP loan
- Must purchase a home in Montgomery County
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Pros
- Favorable interest rates with an MMP loan
- Assistance funds can be used for a down payment or closing costs
Cons
- Can’t be used with MMP’s other DPA products
Montgomery Employee DPA Loan
If you’re a Montgomery County employee buying your first home, you can use this MMP program to get a 30-year primary mortgage and $25,000 in down payment and closing cost assistance. This is given as a zero-interest loan that’s deferred for the life of your first mortgage. If you don’t use the full $25,000, the remainder will be applied to your loan principal.
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- Must meet the requirements for an MMP loan
- Must be an eligible employee of Montgomery County
- Must purchase a home in Montgomery County
- Must contribute 1 percent of the home’s sale price from your own funds
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Pros
- Competitive interest rates with the MMP loan
- Assistance funds can be used for a down payment, closing costs and principal curtailment
Cons
- Can’t combine with other MMP DPA or Partner Match
Baltimore City Employee Homeownership Program
Full-time, permanent employees of Baltimore City agencies can use Live Baltimore’s Baltimore City Employee Homeownership Program to get up to $5,000 in down payment and closing cost assistance. This is a five-year forgivable loan available to employees using a fixed-rate loan to purchase a home in Baltimore City. Both first-time and repeat homebuyers are eligible for the program.
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- Home’s purchase price can’t exceed $731,400
- Must use at least $1,000 of your own funds for the purchase
- Must receive a homeownership counseling certificate (before making an offer on a home)
- Must attend a Live Baltimore Trolley Tour event and complete the related requirements
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Pros
- Doesn’t require repayment
- No income limits
- Open to first-time and repeat buyers
Cons
- Program has geographical and employment-related restrictions
Buying Into Baltimore
Live Baltimore’s lottery-style Buying Into Baltimore program is a five-year forgivable loan that provides $5,000 for down payment and closing cost assistance. It’s open to first-time and repeat buyers who take out fixed-rate mortgages to buy property in Baltimore.
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- Home’s purchase price can’t exceed $731,400
- Must use at least $1,000 of your own funds for the purchase
- Must receive a homeownership counseling certificate (before making an offer on a home)
- Must attend a Live Baltimore Trolley Tour event and complete the related requirements
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Pros
- No income restrictions
- Open to first-time and repeat buyers
- Can be used for a down payment or closing costs
Cons
- Tight timeline — you must make an offer, have it accepted, get a contract of sale and submit required paperwork within 12 business days of a Trolley Tour event
Howard County Settlement Downpayment Loan Program (SDLP)
If you’re buying a home in Howard County and can’t afford a down payment or closing costs, you could qualify for one of these DPA loans.
There are several options available, including HomeStarter, HomeSteader and DreamMaker loans, which are exclusively available for first-time buyers. Revitalization and workforce initiative loans can be used by first-time or repeat buyers.
For all loans (except the zero-interest workforce initiative loan), the interest rate is 2 percentage points less than the rate on the primary mortgage. Maximum loan amounts vary between $4,300 and $40,000, depending on the loan type.
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- House’s sale price can’t exceed $683,977
- Household income can’t exceed certain limits (vary by household size and loan type)
- Must contribute at least $1,000 toward the down payment and settlement
- Must have enough money for one month’s worth of principal, interest, taxes and insurance (PITI) in your bank account
- Must complete homebuyer education
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Pros
- Open to first-time and repeat buyers
- Can be used for a down payment or closing costs
Cons
- Most loans require repayment with interest
City of Gaithersburg Homebuyer Assistance Loan Program (GHALP)
The GHALP program is open to first-time buyers who purchase a home in the city of Gaithersburg corporate limits. If you meet those criteria (and the program’s other requirements), you could get up to $25,000 in down payment and closing cost assistance. The money is provided as a zero-interest deferred loan.
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- Minimum credit score of 620
- Household income can’t exceed 100 percent of AMI (or 120 percent for priority populations, such as teachers, city employees and police officers)
- Must have lived or worked in the city of Gaithersburg for at least one year (doesn’t apply to priority populations)
- Must complete a HUD-approved homebuyer education course
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Pros
- Open to a variety of property types, including single-family homes, condos and townhouses
- Can be applied to a down payment or closing costs
Cons
- For this program, “first-time buyer” means you haven’t owned a home in the previous five years (which is more than the usual three years)
Other Maryland first-time homebuyer loans
On a national level, there are loans geared toward first-time homebuyers that Marylanders can take advantage of. Some of the loans you can explore include:
- FHA loans: Loans insured by the Federal Housing Administration (FHA) have more lenient financial requirements than other loans. You can get an FHA loan with 3.5 percent down and a credit score as low as 580.
- VA loans: For active-duty military, veterans and surviving spouses, a loan guaranteed by the U.S. Department of Veterans Affairs (VA) is a great option. These loans typically come with lower interest rates and don’t require a down payment.
- USDA loans: Loans guaranteed by the U.S. Department of Agriculture (USDA) also require no down payment, but you’ll need to buy in a designated rural area and meet area-specific requirements.
- HomeReady and Home Possible loans: HomeReady and Home Possible are loan programs created by government-sponsored enterprises Fannie Mae and Freddie Mac. They’re specifically for first-time homebuyers, requiring only 3 percent down and having more flexible income requirements.
If you have a job in public service — for instance, as a firefighter, law enforcement officer or teacher — you might be eligible for the Good Neighbor Next Door program, as well, which also has a very low down payment minimum.
Get started
Ready to officially call yourself a Maryland first-time homebuyer? After you’ve researched the assistance you qualify for, here are the next steps to take:
- Learn about the market: Look into what it’s like to buy a home in Maryland. Knowing what to expect in the Maryland housing market will help you be a more educated homebuyer.
- Look for a lender: Next, read up on Maryland’s best mortgage lenders. Take the time to read each company’s online reviews — especially in terms of customer service and hours of operation. If you prefer an in-person experience, find out if there are any branch locations near you.
- Compare offers: Once you’ve found a few contenders, take the time to compare their Maryland mortgage rates. You’ll also want to consider each lender’s closing costs and mortgage terms before choosing one.
- Shop for homeowners insurance: In addition to finding the right home and lender, you’ll also need to get Maryland homeowners insurance. Be sure to shop around and compare each company’s premiums, coverage options and customer support availability.
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