Maryland First-Time Homebuyer Programs

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Updated on Monday, April 1, 2019

Maryland is a state that has something for everyone. From quiet small towns to the bustling urban life of the Washington, D.C., suburbs to the historic Inner Harbor of Baltimore, first-time homebuyers can find the perfect home in the perfect spot. Maryland offers several programs to help first-time homebuyers make their homeownership dreams a reality. These programs provide down payment assistance to make it easier to purchase a home.

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We’ll go over those programs in this guide. We’ve researched statewide programs available in February 2019, as well as six county programs.

Maryland first-time homebuyer programs

Maryland’s first-time homebuyer programs are available through several agencies, including the Maryland Department of Housing and Community Development, county housing departments and city housing authorities. Eligibility requirements vary by program, but you’ll typically need to meet income limitations. Some programs also require that you purchase a home in a specific area.

Requirements for Maryland assistance

The state of Maryland offers several programs to first-time homebuyers through the Maryland Mortgage Program (MMP). All MMP programs have basic eligibility requirements:

  • Have a valid Social Security number (U.S. citizenship is not required)
  • Meet income limits, which range from $92,500 to $154,420, depending on the location and household size
    • Targeted areas have higher income limits. Targeted areas include Baltimore City, plus Allegany, Caroline, Dorchester, Garrett, Kent and Somerset Counties
    • The following counties have no targeted areas: Calvert, Carroll, Cecil, Charles, Howard, Queen Anne’s, St. Mary’s, Talbot and Worcester
    • Other counties may have targeted areas within them
  • Live in the property once you buy it
  • Not own any other residential properties
  • Have less than 20% of the purchase price in liquid assets. (There are some exceptions, though, so it’s best to talk to a lender before ruling yourself out based on your assets.)

Maryland also has several local programs for first-time homebuyers, some of which can be combined with funds from the statewide programs. Local programs set their own eligibility requirements, which may differ from the MMP requirements listed above.

MMP: 1st Time Advantage and 1st Time Advantage With 3% Assistance

What is it?

The MMP 1st Time Advantage program offers:

  • 30-year fixed-rate mortgage
  • The lowest rates available for a Maryland Mortgage Program loan. You can check current interest rates here.

The MMP 1st Time Advantage With 3% Assistance program offers:

  • Low mortgage rates. You can check current interest rates here.
  • A 3% deferred, no-interest second loan
    • Can be used for a down payment or for closing costs
    • No payments are due until the first mortgage is paid off, transferred or refinanced
    • If the loan exceeds the amount you need to cover your down payment and closing costs, the balance can be applied to your mortgage principal

Requirements

  • For both programs, you must:
    • Be a first-time homebuyer, or
    • Not have owned a home in more than three years, or
    • Be buying a home in a targeted area, or
    • Be an honorably discharged veteran who has not previously used the first-time homebuyer exemption.
  • The 1st Time Advantage program can’t be combined with the Maryland HomeCredit Program

How to apply

More than 80 Maryland lenders are state-approved for the 1st Time Advantage programs. To get started, contact one or more approved lenders and let them know that you’re interested in the programs Because lenders’ offerings vary, it’s wise to contact more than one so you can compare.

MMP: Loan Assist

What is it?

The Loan Assist program offers:

  • Low-interest mortgages
  • Up to $5,000 in down payment and closing cost assistance through a no-interest, deferred loan
  • Can be combined with other programs, including Partner Match

Requirements

The standard MMP program requirements apply, including:

  • Must be a first-time homebuyer unless you’re buying a home in a targeted area

How to apply

To get started with the Loan Assist program, contact one or more approved lenders directly. All lenders are trained to help homebuyers find the right program for their financial situation and needs.

MMP: HomeAbility

What is it?

The HomeAbility program is part of the Loan Assist program and is intended to help disabled persons buy a home. It offers:

  • A conventional home loan (check here for interest rates)
  • Plus, up to 25% of purchase price as a no-interest, deferred second mortgage
  • No mortgage insurance required
  • Second mortgage is due when the first mortgage is paid off, or when you sell, transfer or refinance the home.

Requirements

  • One of the borrowers must be disabled, or be a caregiver for, guardian of, or live with a disabled person
  • The borrower’s income must be at or below the area median income limits
  • The disability must be documented by submitting one or more of the following:
    • A CDA certificate of disability
    • Proof of disability income from Social Security, the VA or a former employer
    • Proof that you applied for Social Security Disability and their decision letter

How to apply

Lenders must have silver or gold status with the MMP to offer a HomeAbility loan. To find a lender with that status, visit their lender page and download the printable list of approved lenders, which is sorted by status. Contact a silver or gold lender and let them know you’d like to apply for HomeAbility.

MMP: SmartBuy and SmartBuy 2.0

What is it?

The SmartBuy programs are also part of the Loan Assist program. They offer:

  • Financing for up to 15% of the home purchase price to pay off student loans (SmartBuy 2.0 has a maximum of $40,000)

Requirements

  • You must have at least $1,000 in student loan debt
  • For SmartBuy, you must purchase a move-in-ready home from the state of Maryland. For SmartBuy 2.0 you can buy any property in Maryland that meets MMP requirements.

How to apply

To apply for the SmartBuy program, you need to work with an official SmartBuy lender. You can find a list of SmartBuy lenders on the MMP website. Lenders who have closed more than 10 SmartBuy loans are highlighted on the list.

MMP: Grant Assist

What is it?

The Grant Assist program offers:

  • Grant funds for a down payment and closing costs
  • Two programs:
    • 4% Grant Assist, which offers 4% of the value of the first mortgage
    • Special Assistance Grant, which offers funds based on income
      • $2,500 for borrowers at or below the area median income
      • $1,500 for borrowers at 51% to 80% of the area median income

Requirements

To qualify for the 4% Grant Assist program:

  • You must meet standard MMP requirements
  • You can’t combine the grant with other MMP programs, including Partner Match

To qualify for the Special Assistance Grant:

  • You must use a Freddie Mac Advantage conventional mortgage to purchase your home
  • You must meet income requirements
  • You must meet standard MMP requirements
  • You can combine the Special Assistance Grant with other programs

How to apply

To find out which grant program is the best fit for you, the MMP recommends getting in touch with a program lender. Contact one or more lenders and let them know you’d like to look at the grant assistance programs.

MMP: Rate Assist

What is it?

The Rate Assist program offers:

  • 30-year fixed-rate mortgage with the lowest MMP rates, which you can find here

Requirements

  • The standard MMP program requirements apply
  • Can’t be combined with MMP down payment assistance programs or the Partner Match Program
  • Can be combined with the Maryland HomeCredit

How to apply

The MMP works with more than 80 lenders to offer programs to Maryland residents. Contact one or more of these lenders to find out more about the Rate Assist program.

MMP: Partner Match

What is it?

The Partner Match program offers:

  • Matching funds for homebuyers using any MMP Loan Assist program, to be used as extra down payment assistance.
  • Funds come from participating employers, homebuilders, community organizations and local governments.
  • Up to $2,500 as a no-interest, deferred loan, which is payable when your mortgage is paid off.

Requirements

  • The standard MMP program requirements apply
  • Must meet any Partner program residency requirements

How to apply

To get started with the Partner Match program, contact one of the partner organizations that provide matching funds. You’ll find links to searchable databases on the program page. Additional information is available for state of Maryland employees. To learn more about the Loan Assist program, which is required for the Partner Match program, talk to one of the MMP lenders.

MMP: Maryland HomeCredit

What is it?

The Maryland HomeCredit program offers:

  • A federal tax credit of 25% of the value of the mortgage interest payments you make each year (maximum of $2,000)
  • Credit is available every year until the home is sold, paid off, refinanced or transferred

Requirements

  • The standard MMP program requirements apply
  • You must apply for the HomeCredit program when you apply for a mortgage

How to apply

Not every lender is a Maryland HomeCredit lender who can submit your HomeCredit application. To find lenders who can help you apply for the HomeCredit, visit the MMP lenders page and check the box next to “Maryland HomeCredit Lender.”

Howard County Settlement Down Payment Loan (SDPL)

What is it?

The Howard County SDPL offers:

  • Five different loans for a down payment and settlement costs (closing costs): HomeStarter, HomeSteader, DreamMaker, Revitalization and Workforce Initiative loans
  • Interest rates are 2 points below the primary mortgage interest rate for all loans except the Workforce Initiative loan, which has a 0% interest rate
  • Deferred repayment until you sell the home, refinance or (in the worst-case scenario) default. For Workforce loans, principal amount is reduced 10% per year, and completely forgiven in year 10.

Requirements

To qualify for a Howard County SDPL, borrowers must:

  • Be a first-time homebuyer (for the HomeStarter, HomeSteader and DreamMaker loans)
  • Purchase a home that costs no more than the price limit of $476,471
  • Have at least $1,000 to contribute to the settlement and down payment costs
  • Have enough money saved to cover one month’s mortgage payment
  • Not have the funds on hand to pay for your total settlement and down payment costs
  • Qualify for a fixed-rate mortgage loan
  • Complete homebuyer education
  • Meet the income limits, which vary by loan type and household size.

How it works

To apply for one of the SDLP programs, talk to an approved lender and let them know you’d like to apply. You will need to complete an application and submit it through your lender. You can find an approved lender at the link below.

Arundel Community Development Services (ACDS) Mortgage Assistance Program

What is it?

The ACDS Mortgage Assistance Program offers:

  • A loan of up to $20,000 for closing costs, down payment assistance and mortgage write-downs
  • No monthly payment required
  • 0% interest
  • You repay the loan when you sell, transfer or move out of the home, or in 30 years, whichever comes first.

Requirements

To qualify, you need to:

  • Complete the ACDS Homeownership Counseling Program before you enter into your contract
  • Meet the income limits, which vary by family size
  • Purchase a home in Anne Arundel County for maximum of $281,000 for an existing home, or $372,000 for new construction
  • Contribute at least 1% of the sales price from your own funds
  • Pass an asset test if you have more than three months’ worth of mortgage payments plus your 1% contribution in liquid assets
  • Purchase a home that passes a property inspection
  • Have a debt-to-income ratio (DTI) of 45% or less

How to apply

The first step in applying for the ACDS Mortgage Assistance Program is to apply for their homeownership counseling. You can do that by visiting the ACDS Mortgage Assistance website and scrolling down to the “How to Apply” section and then clicking on the link for new ACDS clients.

Baltimore County Settlement Expense Loan Program (SELP)

What is it?

SELP offers:

  • A loan of up to $10,000 to help pay closing costs
  • Payment deferral while you live in the home
  • Loan forgiveness if you live in the home for 15 years

Requirements

To qualify, borrowers must:

  • Attend a first-time homebuyer two-part class and workshop
  • Meet with a housing counselor
  • Not have signed a contract for a home

How to apply

The first step in qualifying for SELP is attending a first-time homebuyer class. The teacher will provide more details on the application process during your class. You can find a list of local agencies that provide homebuyer classes on the SELP website.

Frederick County Homebuyer Assistance Program (HAP)

What is it?

The HAP offers:

  • Loans that can be used for closing costs or to help with a down payment
    • Loans are 0% interest, payment-deferred and up to $10,000, depending on your income.
    • You pay back the loan when you sell, transfer or move out of the home.
    • Can be used in conjunction with other programs

Requirements

  • To qualify for the HAP, you need to:
  • Live or work in Frederick County
  • Meet the income limits, which vary by household size and loan size
  • Purchase a home in Frederick County
  • Complete a first-time homebuyer education class
  • Qualify for a 30-year fixed-rate mortgage
  • Occupy the home as your primary residence
  • Contribute at least $500 of your own funds
  • Purchase a one-year home warranty
  • Pass a home inspection

How to apply

To apply for the HAP, you must have a sales contract in place. Your lender will submit your application. If you’re just starting the homebuying process, talk to potential lenders about your interest in the HAP. You can also contact the housing program coordinator with questions. Their contact information is on the Frederick County Homebuyer Programs website.

Prince George’s County Purchase Assistance Program (PGCPAP)

What is it?

  • Loan of up to $15,000 with 0% interest, to be used for a down payment, closing costs or to reduce the mortgage principal
  • Loan repayment is deferred until the home is sold, transferred or is no longer the homebuyer’s primary residence
  • Homebuyers in the following occupations may be eligible for an additional $5,000:
    • Nurses
    • EMTs
    • Police officers
    • Deputy Sheriffs
    • Teachers
    • Firefighters

Requirements

In order to qualify, you must:

  • Purchase a single-family home, a townhouse or condo
  • Be buying a home in Prince George’s County
  • Make the home your principal residence
  • Contribute 1.75% of the purchase price or 50% of your liquid assets over $3,000 (whichever is more)
  • Have income that does not exceed income limits, which vary by household size

How to apply

The first step to apply for the PGCPAP is to contact an approved, participating lender. They’ll help you see if you qualify and walk you through the lending process.

Gaithersburg Homebuyer Assistance Loan Program (GHALP)

Note: applications are not being accepted for this program until July 1, 2019.

What is it?

The GHALP offers:

  • 0% deferred loans to help cover closing costs and down payments
  • Loans are available for up to $25,000 (maximum is 10% of the sales price) depending on where the home is located and whether you are a resident of Gaithersburg at the time of application

Requirements

To qualify for the GHALP:

  • You must have a credit score of 620 or higher
  • You can’t own any other residential property
  • You must complete homeownership counseling
  • The property must be within the Gaithersburg city limits
  • There may be restrictions on the purchase price depending on where you get your mortgage funding
  • You must meet income limits, which vary by household size

How to apply
To qualify for the GHALP, you must work with an approved lender. Your lender can assist you with completing the application.

National assistance

Maryland offers a wealth of programs to help first-time homebuyers purchase the home of their dreams. Some of these programs can be combined with other first-time homebuyer programs. There are several national first-time homebuyer programs, including FHA loans and VA loans for veterans. To find out more about national first-time homebuyer programs, check out LendingTree’s guide to national first-time homebuyer programs. (LendingTree owns MagnifyMoney.)