By Jerry Lyons, REALTOR® with Next Step Realty · October 2026

Buying your first home in Maryland is very doable. It just has more moving parts than most people expect. This guide walks through the money, the state programs, and a realistic order of operations, so you know what's coming before you start touring.

Step 1: Check Which "First-Time Buyer" Rules You Meet

"First-time buyer" doesn't mean the same thing everywhere, and it matters for both loans and taxes.

  • Maryland Mortgage Program (MMP) 1st Time Advantage loans: you generally qualify if you haven't owned a principal residence in the last three years. There are exceptions for some honorably discharged veterans and for buyers in certain targeted areas.
  • Maryland's transfer tax break: applies if you have never owned a home in Maryland that was your principal residence, and you'll live in the one you're buying.

You can meet one definition and not the other, so check both.

Step 2: Get Honest About the Budget

Rates are the first thing to look at. Freddie Mac's Primary Mortgage Market Survey put the average 30-year fixed rate at 7.40% as of October 8, 2026. At that rate, principal and interest run about $692 a month for every $100,000 you borrow, before taxes, insurance, and any mortgage insurance. Your own rate depends on credit, down payment, and loan type.

Then the down payment. It's usually less than people think:

  • FHA loans: as little as 3.5% down with a credit score of 580 or higher, under HUD's rules.
  • Conventional loans: Fannie Mae's HomeReady program allows down payments as low as 3% for borrowers who meet its income limits, and Fannie Mae's guidelines allow up to 97% financing on some other one-unit purchases. Mortgage insurance applies with less than 20% down.
  • VA and other programs: eligible service members and veterans should ask a lender about VA financing.

Don't forget closing costs and a cushion for the first few months of ownership. Your lender's Loan Estimate will show the closing costs line by line.

For context on prices, Baltimore County's median sold price was $365,000 in September 2026.

Based on information from Bright MLS for September 1, 2026 through September 30, 2026; data is reliable but not guaranteed.

Step 3: Look at Down Payment Assistance

The Maryland Mortgage Program, run by the state's Department of Housing and Community Development, offers 30-year fixed-rate loans through approved lenders. According to MMP, the current product lineup includes:

  • 1st Time Advantage Direct: no MMP assistance, but usually MMP's most competitive rate. Outside assistance can be added.
  • 1st Time Advantage 6000: a $6,000 loan toward down payment and closing costs.
  • 1st Time Advantage 3%, 4%, and 5%: assistance equal to that percentage of the first mortgage.
  • HomeStart: for households at or below 50% of area median income, with assistance equal to 6% of the first mortgage.
  • First Homes for First Responders and Teachers: assistance equal to 5% of the first mortgage.
  • Flex loans: similar options that are also open to repeat buyers.
  • Maryland SmartBuy: for buyers with student debt. It can pay off qualifying student loans at closing, up to 15% of the purchase price with a $25,000 maximum, and requires a 720 minimum credit score.

A few things to know:

  • The assistance is a 0% interest, deferred second loan, not a grant. It's due when the first mortgage ends: when you sell, refinance, or pay it off.
  • The 6000 products can add up to $2,500 more through MMP's Partner Match program, if you're also getting help from an approved partner like some employers or builders.
  • You must meet MMP's income limits, purchase price limits, and credit requirements, which vary by county.
  • Homebuyer education is required, and the certificate must be dated within 12 months before settlement. MMP suggests taking it before you sign a contract.
  • The Maryland HomeCredit program (mortgage credit certificates) can't be combined with the 1st Time Advantage loans.

Some counties and Baltimore City run their own assistance programs too. Products, terms, and funding change, so confirm what's available right now with an MMP-approved lender. No program is guaranteed until a lender approves you.

Step 4: Get Pre-Approved (Not Just Pre-Qualified)

A pre-approval means a lender has reviewed your income, credit, debts, and savings. Sellers take it seriously. A quick online pre-qualification doesn't carry the same weight.

Rates moved quickly this fall, so if your pre-approval is more than a few weeks old, ask your lender to re-run it before you write an offer. Avoid opening new credit or making big purchases until after closing.

Step 5: Sign a Buyer Agreement

Before you tour homes with an agent, you'll sign a written buyer agreement. It explains what the agent does for you and how they're paid. That compensation is negotiable. Read it, ask questions, and make sure you understand it before you sign.

Step 6: A Realistic Timeline

Every purchase is different, and your contract sets the real deadlines. As a rough planning guide:

  1. Prep (a few weeks to a few months): check credit, save, take the homebuyer class, talk to lenders, get pre-approved.
  2. Shopping (a few weeks to a few months): tour, compare neighborhoods, and write offers. In a competitive pocket, you may write more than one.
  3. Under contract (often 30 to 60 days): home inspection, appraisal, final loan approval, homeowners insurance, and title work.
  4. Settlement: final walk-through, sign, get keys.

State assistance loans can add some time because the file goes through an extra review, so build that into your closing date.

Step 7: Know Your Closing-Day Tax Break

If you're a first-time Maryland homebuyer moving into the home, state law cuts the state transfer tax to 0.25% and has the seller pay it. The seller also pays the county transfer tax and recordation tax unless your contract says otherwise. You'll sign a sworn statement at settlement to qualify, and if there are two or more buyers, each one generally has to qualify. It can save you thousands in closing costs, so make sure your contract is written with it in mind.

Common First-Timer Mistakes

  • Shopping at the top of your pre-approval instead of at a payment you're comfortable with
  • Skipping the inspection to "win" the house
  • Changing jobs or financing a car mid-process
  • Forgetting to budget for move-in costs, utilities, and early repairs

Thinking about whether to buy now or keep renting? Read Should You Rent or Buy in Maryland Right Now?, and see the latest numbers on the Market Reports page.

Sources: Maryland Mortgage Program: 1st Time Advantage; MMP Flex Loans; Maryland SmartBuy; Partner Match; MMP Homebuyer Education; HUD Single Family Housing Policy Handbook 4000.1; Fannie Mae HomeReady; Freddie Mac Primary Mortgage Market Survey (October 8, 2026); Maryland Code, Tax-Property §13-203; Maryland Code, Real Property §14-104; National Association of REALTORS®, The Facts; Bright MLS (Baltimore County, September 1–30, 2026, via this site's Market Reports).

This is general information, not legal, tax, or lending advice — talk to your attorney, CPA, or lender about your situation.