Maryland first-time homebuyer programs

Maryland Mortgage Program options

The Maryland Mortgage Program (MMP) is the state's flagship effort to help low- and moderate-income residents purchase a home. MMP offers conventional loans as well as government-supported loans like Federal Housing Administration (FHA), VA and USDA-insured mortgages.

Most of the options provided by MMP target first-time homebuyers, said Elena Novak, real estate analyst at PropertyChecker.com, though repeat purchasers may qualify in specific areas or under certain programs.

MMP programs have income and homebuyer education requirements, depending on the type of loan you’re applying for. While requirements may differ by loan type, all MMP loans require you to be at least 18 years old with a valid Social Security number.

Types of MMP loans

The Maryland Mortgage Program offers three types of MMP loans:

• 1st Time Advantage Direct: Competitive 30-year fixed-rate financing for first-time homebuyers in Maryland
• Flex loans: Available to repeat buyers with competitive interest rates and optional down payment support (like Flex 5000)
• Specialty loans: Targeted support for buyers with student debt, disabilities or other specific needs

Down payment assistance programs

Homeowners who meet the eligibility criteria in the state of Maryland might qualify for various down payment assistance programs. It’s important to understand that these options require the amount borrowed to be repaid; rather than a gift or grant, these programs provide money in the form of a zero-interest second mortgage that doesn’t have to be paid back until the first mortgage is paid off.

These first-time buyer benefits are helpful for those who have decent credit and can afford monthly mortgage payments but may not be able to save the large amount of funds traditionally required for a down payment on a home.

Here are some of Maryland’s down payment assistance programs:

• 1st Time Advantage 6000: Provides $6,000 to use toward a down payment and closing costs
• Flex 5000: Provides $5,000 to use toward a down payment and closing costs
• 1st Time Advantage with 3% Assistance: Allows you to take a deferred, zero-interest second loan for 3% of the mortgage amount to use for down payment and closing costs.
• 1st Time Advantage 4% and 5%: Same as the 3% option but with larger loan amounts of 4% and 5% respectively
• HomeStart 6% Down Payment Assistance Loans: Provide an interest-free 30-year deferred loan for first-time homebuyers in Maryland with incomes at or below 50% of the area median income (AMI) to use toward a down payment

» COMPARE: Best mortgage lenders for first-time buyers

Pathway to Purchase program

The Pathway to Purchase program is a flexible housing assistance program specific to Prince George's County in Maryland. The program was designed in part to address the county’s growing problem of unaffordable housing for its residents.

Under this program, first-time homebuyers in the county can receive up to $10,000 in down payment and closing cost assistance. Since it's an interest-free loan forgiven after five years of property ownership, it's well-suited to individuals who intend to remain in their home long-term, Novak told us.

While the assistance can be used on single-family homes as well as multifamily dwellings and even foreclosure properties, the property must be located within the confines of Prince George’s County. Below are the eligibility requirements for the Pathway to Purchase program:

• Completion of homebuyer education counseling
• Credit score of 640 or higher
• First-time homebuyer status (no mortgage in the past three years)
• Income below 80% of the AMI
• Property must be used as a primary residence

Specialized programs for unique needs

Maryland also provides homeowner assistance to those with special circumstances, like those with a qualifying disability or heavy student loan debt. The two most popular programs are Maryland SmartBuy 3.0 and HomeAbility.

First-time homebuyer grants and loans

Maryland offers both loans and grants to help first-time homebuyers, but they come from different sources. The MMP provides deferred or forgivable loans, not grants, while some cities and counties offer true grants that don’t need to be repaid.

MMP loans are designed for buyers who qualify for a mortgage but need help with upfront costs. These second loans usually have no interest and typically don’t need to be repaid unless the homeowner sells, refinances or moves out early.

Some local governments and employers offer direct grants, like Baltimore’s $10,000 Live Near Your Work program, which helps buyers purchase homes near participating job centers. These grants don’t accrue interest and don’t have to be repaid if the eligibility terms are met.

“They’re an inexpensive means of covering closing expenses without putting your budget under strain,” Novak said. “They greatly alleviate the cash entry barrier for prospective purchasers, which makes them a great first-time homebuyer benefit.”