First-time home buyer programs in Maryland: assistance, loans and real costs
Before the program names: maryland’s first-time buyer transfer tax break is statutory — the seller must pay the whole reduced state tax — which often saves a buyer $1,000 to $2,000 if the contract and settlement company apply it correctly.
| State housing agency | Maryland Department of Housing and Community Development (DHCD) |
|---|---|
| Median home price (approx.) | $420,000 — statewide order of magnitude; metros differ |
| 3.5% / 5% / 20% down | $14,700 / $21,000 / $84,000 on the median |
| Property tax (effective) | about 1.01% — roughly $4,242 a year on the median |
| Mortgage credit certificate | Yes — mortgage credit certificate offered |
| Transfer tax | Maryland’s state transfer tax is 0.5% (reduced to 0.25% and paid entirely by the seller for first-time buyers of a principal residence), plus county transfer taxes of 0% to 1.5% and state recordation tax that varies by county; totals of 1.5% to 3% are common, typically split. |
State programs for first-time buyers in Maryland
The Maryland Mortgage Program (MMP), run by the Department of Housing and Community Development, offers 1st Time Advantage loans with down payment assistance, Flex loans for repeat buyers, SmartBuy for buyers with student debt, and Partner Match funds from employers and localities. Maryland HomeCredit is the state’s MCC.
Down payment and closing cost assistance
MMP assistance comes as a 0% deferred second loan (commonly $5,000 to $6,000 depending on the product, or a percentage of the loan with some options) due on sale, refinance or payoff; Partner Match can double employer or local contributions, and SmartBuy pays off eligible student debt at closing.
Read the lien type before the dollar figure: grant (no repayment), forgivable second (repaid only if you leave early), deferred second (repaid at sale or refinance), or repayable second (a monthly payment that counts in your debt-to-income ratio). See how down payment assistance programs work.
The MCC: a federal tax credit for the life of the loan
Maryland HomeCredit is a Mortgage Credit Certificate giving a federal tax credit on a portion of annual mortgage interest; it can be paired with an MMP first mortgage or used alone.
Eligibility limits
MMP income limits vary by county and household size (highest in the Washington suburbs) and purchase price limits apply; minimum credit scores start around 640 and homebuyer education is required for most products.
Closing costs, transfer taxes and who pays them in Maryland
Maryland’s state transfer tax is 0.5% (reduced to 0.25% and paid entirely by the seller for first-time buyers of a principal residence), plus county transfer taxes of 0% to 1.5% and state recordation tax that varies by county; totals of 1.5% to 3% are common, typically split.
Maryland is among the costlier states to close in because of layered transfer and recordation taxes; even with the first-time buyer reduction, buyer costs commonly run 3% to 4% of the price in the Baltimore and Washington suburbs. Sellers can pay a share of these costs within program limits — see seller concessions — and our closing costs guide covers the rest.
The numbers on a typical Maryland home
The numbers below assume Maryland’s approximate median price of $420,000 and a 6.5% rate chosen for illustration, not quoted. Property tax is estimated from the state’s effective rate of about 1.01% — $4,242 a year at this price — and will differ by county. Add homeowners insurance and, below 20% down, mortgage insurance.
| Structure | Down payment | Loan amount | P&I at 6.5% (30 yr) | Property tax / mo (est.) |
|---|---|---|---|---|
| FHA, 3.5% down | $14,700 | $405,300 | $2,562 | $354 |
| Conventional, 5% down | $21,000 | $399,000 | $2,522 | $354 |
| Conventional, 20% down (no PMI) | $84,000 | $336,000 | $2,124 | $354 |
Illustrative rate and approximate state figures — not an offer or a quote. Full payment tables cover $150,000 to $800,000 at 5% to 8%; the affordability guide explains how lenders size the loan.
Frequently asked questions
Does Maryland have down payment assistance for first-time buyers?
MMP assistance comes as a 0% deferred second loan (commonly $5,000 to $6,000 depending on the product, or a percentage of the loan with some options) due on sale, refinance or payoff; Partner Match can double employer or local contributions, and SmartBuy pays off eligible student debt at closing. Funding rounds open and close; ask a participating lender what is available today rather than relying on last year’s cap.
Is there a first-time home buyer tax credit in Maryland?
Maryland HomeCredit is a Mortgage Credit Certificate giving a federal tax credit on a portion of annual mortgage interest; it can be paired with an MMP first mortgage or used alone. MCCs reduce federal income tax owed each year for as long as you keep the loan and live in the home; they are applied for through the lender at purchase.
What are typical closing costs when buying a house in Maryland?
Maryland is among the costlier states to close in because of layered transfer and recordation taxes; even with the first-time buyer reduction, buyer costs commonly run 3% to 4% of the price in the Baltimore and Washington suburbs. Maryland’s state transfer tax is 0.5% (reduced to 0.25% and paid entirely by the seller for first-time buyers of a principal residence), plus county transfer taxes of 0% to 1.5% and state recordation tax that varies by county; totals of 1.5% to 3% are common, typically split.
Before you apply
- Twelve first-time home buyer mistakes — and the cheap fix for each
- Earnest money explained: how much, who holds it, and how you lose it
- Appraisal gap: what happens when the home appraises below your offer
- Down payment assistance programs: how they work and how to find yours
Other Maryland pages: hard money rules in Maryland · foreclosure in Maryland.