Maryland First-Time Home Buyer Guide

A MD first-time home buyer, per HUD guidelines, is someone who hasn’t owned a principal residence in the past three years and is applying for a home loan in Maryland. We published this post to detail the trusted and proven Maryland first-time home buyer programs, including down payment assistance, grants, and local incentives, with two case studies to demonstrate their impact.

Maryland’s housing market, with a median home price of approximately $412,000 as of February 2025, presents challenges for first-time buyers due to high demand and rising housing costs, particularly in areas near Baltimore, Columbia, and Washington, D.C. However, the state offers a robust array of programs through the Maryland Mortgage Program (MMP), local initiatives, and federal options to make homeownership more accessible.

Maryland First-Time Home Buyer Loan Programs

Administered by the Maryland Department of Housing and Community Development (DHCD), the MMP provides competitive 30-year fixed-rate mortgages (FHA, VA, USDA, or conventional) paired with financial incentives to reduce upfront costs.

These programs are available to first-time buyers, with exceptions for honorably discharged veterans or buyers in targeted areas.

Eligibility typically requires a minimum credit score of 640, a debt-to-income (DTI) ratio below 50% for conventional loans (45% for others), and completion of a homebuyer education course. Household income and purchase price limits vary by county and household size.

1. 1st Time Advantage Program

The 1st Time Advantage program offers 30-year fixed-rate mortgages with competitive interest rates for first-time buyers. It includes three DPA options:

• 1st Time Advantage 3%: A 0% interest, deferred second mortgage equal to 3% of the first mortgage for down payment or closing costs, repayable upon sale, refinance, or transfer.

• 1st Time Advantage 6000: A 0% interest, deferred second mortgage of $6,000, with the same repayment terms.

• 1st Time Advantage Direct: No DPA but offers low rates and reduced mortgage insurance for eligible buyers.

Details are available at MMP 1st Time Advantage.

2. Maryland SmartBuy 3.0

SmartBuy 3.0 assists first-time buyers with at least $1,000 in student loan debt by providing up to 15% of the home’s purchase price (capped at $30,000) as a 0% interest, forgivable second mortgage to pay off student debt. The loan is forgiven at 20% per year over five years, with no monthly payments. Requirements include:

• Paying off all student debt at closing.

• Contributing 5% of the purchase price from personal funds.

• Completing a homebuyer education course.

Learn more at MMP SmartBuy.

3. Flex Programs

Flex programs extend similar benefits to repeat buyers but are also available to first-time buyers. Options include:

• Flex 3% and Flex 5000: Provide 3% or $5,000 as a 0% interest, deferred second mortgage for down payment or closing costs, repayable upon sale or refinance.

• Flex 6000: Offers $6,000 with the same terms, ideal for buyers needing extra assistance.

• HomeStart: Provides up to 6% of the loan amount for buyers with income at or above 50% of the area median income (AMI).

Visit MMP Flex Programs.

4. Partner Match Program

The Partner Match Program matches contributions from employers, builders, or community organizations up to $2,500 for buyers using 1st Time Advantage 6000 or Flex 6000 loans. Combined with the $6,000 base assistance, this can provide up to $8,500 in 0% interest, deferred loans. Contact an MMP-approved lender for partner eligibility at MMP Partner Match.

5. HomeAbility Program

For buyers with disabilities (or households with a disabled member), HomeAbility offers a 95% first mortgage and a 0% interest second mortgage covering up to 25% of the purchase price (max $45,000) for down payment and closing costs. Income and credit requirements align with MMP standards. Details at MMP HomeAbility.

6. Mortgage Credit Certificate (MCC)

The MCC provides a federal tax credit of up to 25% of annual mortgage interest, capped at $2,000, reducing tax liability. It cannot be combined with 1st Time Advantage loans but can pair with other MMP mortgages. See MMP MCC.

Local First-Time Home Buyer Incentives

1. Baltimore City Incentive Programs

Baltimore offers several programs through its Department of Housing & Community Development, requiring homeownership counseling and a $1,000 minimum buyer contribution:

• First-Time Homebuyers Incentive Program (FTHIP): Provides $10,000 as a five-year forgivable loan for buyers with income at or below 80% AMI. An additional $5,000 is available for renters purchasing their leased home or buyers with disabilities.

• Buying Into Baltimore: A $5,000 forgivable loan for buyers attending a Trolley Tour event, with a tight 12-day application timeline.

• Baybrook Boost: Offers $10,000–$20,500 for buyers in Brooklyn or Curtis Bay, based on income, as a 0% interest, deferred loan.

• Vacants to Value Booster: Provides $10,000 for purchasing and renovating properties with a prior Vacant Building Notice.

Details at Baltimore DHCD.

2. Prince George’s County Pathway to Purchase

This program offers up to $25,000 in down payment and closing cost assistance as a 0% interest, deferred loan, forgiven after 10 years. The home must be a primary residence in Prince George’s County. As of May 2025, $279,434.24 remains available. Learn more at Pathway to Purchase.

3. Montgomery County Homeownership Program

Montgomery County provides up to $25,000 in DPA as a 0% interest, deferred loan, repayable upon sale or refinance. Germantown buyers can access the Revolving Closing Cost Assistance Program, offering up to $10,000 at 5% interest, repayable over 10 years. Visit Montgomery County Housing.

4. Gaithersburg Down Payment Assistance Program (DPA)

Gaithersburg offers up to $40,000 in 0% interest, deferred loans for first-time buyers (no homeownership in the past five years) purchasing within city limits. Applicants must have lived or worked in Gaithersburg for one year (waived for priority groups like teachers or police). Starting July 2025, an MMP-approved lender is required. See Gaithersburg DPA.

5. Howard County DPA Programs

Howard County’s HomeStarter, HomeSteader, and DreamMaker loans offer interest-free DPA or loans at 2% below the primary mortgage rate, repayable at the end of the first mortgage. Details at Howard County Housing.

6. Baltimore County Homeownership Assistance

Baltimore County provides up to $10,000 in closing cost assistance for low- and moderate-income buyers in Community Conservation Areas. Contact Baltimore County Housing.

7. Frederick County Community Partners Incentive Program (CPIP)

Frederick County matches MMP’s DPA up to $2,500 for buyers using an MMP loan, offering a total of $7,500 when combined with Flex 5000. See Frederick County Homebuyer Programs.

Case Study 1: The Carter Family in Baltimore

The Carters, a family of three earning $65,000 annually, aimed to buy a $250,000 rowhouse in Baltimore. As first-time buyers, they qualified for the MMP 1st Time Advantage 6000, receiving a $6,000 deferred loan for closing costs. They also secured a $10,000 forgivable loan through Baltimore’s FTHIP, as their income was below 80% AMI. An employer contribution of $2,500 via the Partner Match Program was matched by MMP, adding $5,000 to their DPA. With an FHA loan requiring 3.5% down ($8,750), they covered the down payment with personal savings and assistance, closing on their home in 2024. The MCC further reduced their tax liability by $1,800 annually, easing monthly expenses.

Case Study 2: Elena Martinez in Gaithersburg

Elena, a single teacher earning $55,000, wanted a $300,000 condo in Gaithersburg. With $10,000 in student loan debt, she used the SmartBuy 3.0 program to secure a $15,000 forgivable second mortgage to pay off her debt, fully settled at closing. She also received $25,000 from the Gaithersburg DPA program, a 0% interest deferred loan, to cover her 3.5% FHA down payment ($10,500) and closing costs. After completing a HUD-approved homebuyer course, Elena closed on her condo in 2025. The forgivable SmartBuy loan and deferred Gaithersburg loan eliminated upfront financial strain, allowing her to focus on building equity.

Tips for Maryland First-Time Home Buyers

1. Get Pre-Approved: Work with an MMP-approved lender to determine your budget and strengthen your offer.

2. Combine Programs: Pair MMP loans with local DPA or Partner Match funds to maximize assistance.

3. Complete Education Courses: HUD-approved courses, required for most programs, provide valuable financial insights. Find courses at HUD Housing Counseling.

4. Check Targeted Areas: Some programs waive first-time buyer requirements in designated areas. Check MMP Targeted Areas.

5. Monitor Credit and DTI: Maintain a credit score above 640 and a DTI below 45–50% to qualify for most programs.

Challenges and Considerations

Maryland’s median down payment was $35,585 in 2024, reflecting high upfront costs. Programs have income and price limits, which may exclude buyers in high-cost counties like Montgomery. DPA loans often require repayment upon sale or refinance, and some, like Gaithersburg’s, are not forgivable. Limited funding, such as for Buying Into Baltimore’s lottery, can restrict access. Buyers should act quickly and work with experienced lenders to navigate requirements.

Takeaway on Buying Your First Home in Maryland

Maryland’s first-time home buyer programs, from MMP’s 1st Time Advantage and SmartBuy to local incentives in Baltimore, Prince George’s, and Gaithersburg, provide critical support for overcoming financial barriers. By combining these with federal options like FHA or VA loans, buyers can minimize upfront costs and achieve homeownership. Contact MMP-approved lenders, complete required education, and explore local programs to maximize benefits and turn the dream of owning a home in Maryland into reality.

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