Overview
Maryland's typical home value sits around $430,000, with Montgomery and the D.C. suburbs running well above that and parts of the Eastern Shore and Western Maryland below. For first-time buyers, the twin hurdles are the down payment and the student-loan balances that crowd out mortgage qualifying, a real issue in a state full of federal and healthcare workers. The Maryland Department of Housing and Community Development (DHCD) runs the Maryland Mortgage Program (MMP), which combines a below-market first mortgage with flexible down payment assistance built to clear exactly these obstacles.
MMP's down payment assistance comes in two main lines. The 1st Time Advantage and Flex products each offer either a flat $6,000 or a percentage (3% or, on some products, 5%) of the first mortgage as a zero-interest deferred second loan, with no monthly payments due. Because it's deferred rather than forgivable, the balance is simply repaid when you sell, refinance, or pay off the first mortgage, so it never adds to your monthly cost. The 1st Time Advantage line is reserved for first-time buyers (no ownership in the prior three years), while Flex products are also open to repeat buyers, and income and purchase-price limits apply by county.
State Programs
Maryland Mortgage Program (MMP) 1st Time Advantage
Below-market first mortgage with optional zero-interest deferred second loan (DPA)MMP Flex Loans
First mortgage with optional zero-interest deferred second loan (DPA)Maryland SmartBuy 3.0
Student-debt payoff loan (zero-interest, forgiven after 5 years)MMP Partner Match
Matching down payment assistance (added to a 6000 DPA loan)Montgomery Homeownership Program / MEDPAL (county specialty products)
Zero-interest deferred second mortgage(s) for down payment/closing costsFederal Programs Available in Maryland
These nationwide programs can be combined with Maryland state assistance for maximum benefit.
FHA Loan Program
Low down payment mortgageVA Home Loan
Zero down payment mortgageUSDA Rural Development Loan
Zero down payment mortgageTips for First-Time Buyers in Maryland
Maryland's signature program is SmartBuy 3.0, which tackles student debt head-on: it provides up to 15% of the home's purchase price to pay off your student loans, and as of June 1, 2026 DHCD raised the cap from $20,000 to $25,000. That payoff portion is a zero-interest loan fully forgiven after five years in the home. You can also layer the Partner Match program, which matches assistance from approved community partners up to an additional $2,500 when you use a 1st Time Advantage 6000 or Flex 6000 loan, stacking multiple sources of help into one purchase.
Maryland's tax picture has two layers. The state income tax is graduated, running 2% up to 5.75%, and for 2026 the legislature added new 6.25% and 6.5% brackets for high earners plus a 2% capital-gains surtax on filers with federal AGI of $350,000 or more, though those top tiers won't touch most first-time buyers. On top of the state tax, every county (and Baltimore City) levies a local income tax, now ranging from about 2.25% up to 3.30% after the 2026 cap increase. Property taxes average roughly 0.92%-1.05% effective, so a $430,000 home runs about $4,200-$4,500 a year. Maryland's Homestead Tax Credit caps how fast your taxable assessment can rise (10% statewide, lower in many counties).
County-level help is generous in Maryland. Montgomery County offers products like the Montgomery Homeownership Program (a second mortgage up to $50,000) and MEDPAL ($25,000 for eligible employees), while Prince George's, Baltimore City, and others run their own assistance, so ask an MMP-approved lender what's layered in your county. Military buyers near Fort Meade, Joint Base Andrews, Aberdeen Proving Ground, or Naval Academy Annapolis can combine these with a VA loan. To begin, complete the required MMP homebuyer education course, meet with a HUD-approved housing counselor, and apply through an MMP-approved lender who can confirm your county's income limits and assistance options.
Frequently Asked Questions
For educational purposes only -- not financial or tax advice. Program details, eligibility requirements, and benefit amounts are subject to change. Verify all information directly with the administering agency before applying. Last verified: June 15, 2026.