Maryland First-Time Home Buyer 2022: Programs and Grants

What to know about buying a house in Maryland

Maryland offers lots of help for first-time home buyers. You can get counseling and advice as well as home buyer education courses. And, if you’re eligible, you might be in line for cash assistance to help cover your down payment and closing costs. Here’s how to get started.

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Maryland home buyer overview

The median sales price for homes in Maryland was $390,000 in April 2022, according to Maryland Realtors. That was up by 8% year over year.

These sorts of rises can be challenging first-time home buyers who are saving for a down payment. If you’re in that position, be sure to read on about Maryland’s down payment assistance programs. Because those could help you bridge the gap between your savings account balance and your down payment needs.

Maryland home buyer stats

Average Home Sale Price in Maryland1	$390,000
Minimum Down Payment in Maryland (3%)	$11,700
20% Down Payment in Maryland	$78,000
Average Credit Score in Maryland2	716
Maximum Home Buyer Grant in Maryland3	4% of main mortgage as a nonrepayable grant (Maryland DHCD Flex 4% Grant)

Down payment amounts are based on the state’s most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you’re eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Maryland

If you’re a Maryland first-time home buyer with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20% down. But the good news is, you don’t need that much. Not by a long shot.

Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

• Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
• FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance until you refinance to a different type of mortgage, move home, or pay off your loan
• VA loan: Only for veterans and service members, reservists, and National Guard. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
• USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
• Maryland Mortgage Program: May include competitive interest rates and can be used with down payment assistance. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender can help you find the right match based on your finances and home buying goals.

Maryland first-time home buyer programs

The Maryland Department of Housing and Community Development (DHCD) offers the Maryland Mortgage Program (MMP), which provides a vast array of mortgage choices to first-time buyers.

The DHCD website explains: “Loan terms are competitive with other home loan products on the market, but what makes MMP unique is the range of associated financial incentives and other assistance that, for many homebuyers, means the difference between being able to purchase and continuing to rent.”

It adds, “MMP down payment assistance can only be obtained with an MMP first mortgage; it is not a stand-alone option.” So you have to get one of DHCD’s mortgages to obtain down payment assistance.

There are other conditions, too. For most programs you must:

• Buy a home in the state of Maryland
• Choose one of 80 participating lenders from DHCD’s list
• Undergo a home buyer education course in most cases
• Have a household income at or below the local income limit
• Not own any other real estate
• Live in the home once you’ve bought it (meaning its a “primary residence”)

Those eligibility criteria vary for each mortgage program and you’ll have to drill down on the website for the details of the one you want. You can also ask a lender on the DHCD approved list for help.

Maryland first-time home buyer grants

Maryland DHCD has a number of down payment assistance programs, including:

• MMP 1st Time Advantage: Qualifying first-time buyers may be eligible for a low fixed-rate mortgage. However, mortgage credit certificates may not be layered with this loan type
• Partner Match: Funds provided come in the form of a no-interest, deferred loan to be applied to the down payment and closing costs. Only available with the 1st Time Advantage 5000 or Flex 5000 loans
• Flex 5000: A $5,000 no-interest loan with no monthly payments. However, you must repay the original $5,000 when your first mortgage ends. That might be when you sell, refinance, transfer, or finish paying down the mortgage
• Flex 3% Loan: Borrow 3% of your first (main) mortgage on the same terms as the Flex 5000 loan
• Flex 3% Grant: Receive 3% of your mortgage loan amount in the form of a grant that never needs to be repaid
• Flex 4% Grant: Another grant that you don’t repay. But this time you get 4% of your main mortgage amount

Clearly, everyone would choose the Flex 4% grant if they could. So expect the eligibility criteria to get tougher as you go down that list.

Maryland SmartBuy

Another program, called Maryland SmartBuy, can help eligible homebuyers with large amounts of student debt. Its website says:

“To qualify for the Maryland SmartBuy 3.0 program, homebuyers must have an existing student debt with a minimum balance of $1,000. Maryland SmartBuy 3.0 financing provides up to 15% of the home purchase price for the borrower to pay off their outstanding student debt with a maximum payoff amount of $30,000.”

SmartBuy is available through approved lenders and borrowers will have to meet special eligibility criteria.

Also remember that DHCD mortgage assistance programs, including Flex loans, grants, and SmartBuy, are only available if you also use its proprietary Maryland Mortgage Program.

If you’re not using that loan program, look into other local DPA options. There may be help available from a county, city, or local government that works with the type of home loan you’re using. Your loan officer can help you find and apply for programs for which you might be eligible.

Buying a home in Maryland’s major cities

Of the Old Line State’s three most populous cities, only Baltimore saw a decrease in home prices during the 12 months prior to April 2022. Home prices held steady in both Columbia and Germantown.

Still, saving for a down payment is challenging for any first-time homeowner. So read on for local programs that can help with down payment and sometimes closing cost assistance in each of those cities.

Baltimore first-time home buyers

The median home price in Baltimore was $210,000 in April 2022, according to Realtor.com. That was actually down 2.2% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $6,300 for 3% down payment
• $42,000 for 20% down payment

The Live Baltimore website lists several state and city down payment assistance programs. The most interesting appear to be those provided by the Maryland DHCD (above). But it’s worth scrolling through the list to see if others might suit you better.

Three programs stand out:

• Buying Into Baltimore: $5,000 for down payment and closing cost assistance that’s forgiven over five years. So you owe nothing at the end of the loan term. No household income requirements. But this is a lottery with only 20 winners each year
• Baltimore City Employee Homeownership Program: For full-time, permanent city staff only. Get a $5,000 loan that’s forgiven over five years
• Baybrook Boost: Open only to those buying in the Brooklyn and Curtis Bay neighborhoods. Get $10,000 or $20,500 depending on your household income. You receive an interest-free loan with no monthly payments. But you have to pay it back when you sell, refinance, transfer or finish paying down your main mortgage

You may find other programs that meet your particular needs if you click that Live Baltimore link above.

Columbia first-time home buyers

The median home price in Columbia was $425,000 in April 2022, according to Realtor.com. That was a 6.3% list price increase year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $12,750 for 3% down payment
• $85,000 for 20% down payment

Columbia’s down payment assistance programs are provided by Howard County. It doesn’t specify the amounts that can be borrowed. But these are deferred loans that fall due upon sale of the home, refinance or default. These loans are not interest-free; you pay a low rate of 2 points below the primary mortgage interest rate.

Germantown first-time home buyers

The median list price in Germantown was $409,000 in April 2022, according to Realtor.com. That was up 5.4% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $12,270 for 3% down payment
• $81,800 for 20% down payment

Germantown down payment assistance programs are administered by Montgomery County. You can borrow the most (5% of the purchase price, up to $10,000) using the Revolving Closing Cost Assistance Program (RCCAP). But that comes as a loan with a 5% interest rate that you pay back in equal installments over 10 years in parallel with your main mortgage.

A more attractive alternative may be Option 2 of the MPP program. You can borrow only up to 3% of the purchase price. But this comes in the form of a forgivable loan that expires after five years. So you’ll owe nothing after the loan term concludes, providing you don’t move, sell, refinance or transfer during that time.

There’s also a third program for county employees. You can find more details on that and the two other programs on the website linked above.

Where to find home buying help in Maryland

All the organizations we’ve listed above should provide advice freely to any Maryland first-time home buyer.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists for statewide, regional, and local resources. Here’s the list direct from HUD:

Statewide and regional first-time home buyer programs in Maryland

Maryland home buyer programs by city/town

Maryland home buyer programs by county

What are today’s mortgage rates in Maryland?

You can see today’s live mortgage rates in Maryland here.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders.

Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

¹Source: Maryland REALTORS Monthly Monthly Housing Statistics Report
²Source: Experian.com study of 2021 and 2020 data
³Based on a review of the state’s available DPA grants at the time this was written