Maryland first-time home buyer programs: the basics

The Maryland Mortgage Program is provided by the Maryland Department of Housing and Community Development (DHCD). Its Division of Development Finance, also called the Community Development Administration, is the state’s housing finance agency.

Two things to know up front:

• Every MMP home loan is a 30-year fixed-rate mortgage.
• You apply through an approved lender, not through the state directly. MMP lists more than 100 approved lenders, and the loan officer helps put the application together.

For the MMP 1st Time Advantage loans, you are treated as a first-time buyer if it has been more than three years since you owned a principal residence. There are two main exceptions:

• you are buying in one of the program’s targeted areas, and you will sell your current home before you close on the new one, or
• you are an honorably discharged veteran who has not used the first-time homebuyer exception before.

• 1st Time Advantage. For eligible first-time buyers. MMP describes it as the program’s lowest 30-year fixed rate.
• Flex loans. For first-time or repeat buyers, with options that include extra funds for the down payment and closing costs.
• Specialty options. These include a loan for buyers with eligible student debt (Maryland SmartBuy) and a program for teachers and first responders.

Much of MMP’s help comes as a zero-interest, deferred second loan alongside the first mortgage. Depending on the product, it can be a set dollar amount or a percentage of the first mortgage. For some products, the second loan comes due when the first mortgage ends, such as when you sell or refinance. MMP also matches assistance from approved partner organizations for some products.

Amounts, rates and limits change, so we don’t quote them here. Ask an MMP-approved lender what is available now.

• A homebuyer education class. The 1st Time Advantage loans require an approved class. Take it early.
• Income, credit score and purchase price limits. These vary by product and by county, and MMP publishes the current figures.
• A pre-approval from an MMP-approved lender before you shop.

Separate from MMP, Maryland law lowers the state transfer tax for a first-time Maryland home buyer who will live in the home as a principal residence: the rate drops from 0.5% to 0.25%, and the law says the seller pays all of it (Tax-Property §13-203). For this break, a first-time Maryland home buyer is someone who has never owned a principal residence in Maryland, and each buyer signs a statement under oath.

Note that this definition is different from MMP’s three-year rule. County transfer and recordation taxes are separate. Your settlement company will confirm what applies in your county.

1. Find an MMP-approved lender and ask which products fit you.
2. Take the homebuyer education class.
3. Get pre-approved, then start touring homes with us.

Talk to your lender, settlement company or tax advisor about your own situation.