Becoming a Homeowner in Maryland: Understanding Down Payments, Closing Costs, Grants, and Smart Savings Strategies


As a realtor, I understand that one of the most significant hurdles for prospective homebuyers is coming up with the down payment and closing costs. In Maryland, like in many other states, these costs can seem daunting, but with the right information and some proactive saving strategies, homeownership can become a reality. In this article, we'll explore how much is required for a down payment and closing costs in Maryland, where to find grants to assist with your purchase, and some common and unique ways to save money for a down payment.

Down Payment and Closing Costs in Maryland:

The down payment is the initial upfront payment a buyer makes towards the purchase of a home. The amount required for a down payment in Maryland typically depends on the type of mortgage and the lender's specific requirements. Conventional loans usually require as little as 3% down payment, but typically 5% to 20% of the home's purchase price, while FHA loans may allow for a lower down payment, around 3.5%. Veterans and active-duty military personnel might qualify for VA loans with little to no down payment.

In addition to the down payment, buyers need to consider closing costs. Closing costs include various fees and expenses related to finalizing the home purchase, such as loan origination fees, appraisal fees, title insurance, attorney fees, and more. These costs generally range from 4% to 5% of the home's purchase price.

For example, if you're purchasing a home in Maryland for $300,000, a conventional loan with a 10% down payment would require $30,000 upfront, and closing costs might amount to approximately $9,000 to $15,000.

Finding Grants for Homebuyers:

The good news is that there are programs and grants available in Maryland to assist homebuyers, particularly first-time buyers, with their down payment and closing costs. Here are some resources to explore:

  1. Maryland Mortgage Program (MMP): Operated by the Maryland Department of Housing and Community Development, MMP offers various assistance programs, including down payment and closing cost grants, low-interest mortgage loans, and partner match programs. Eligibility requirements are that you must be a first time home buyer at least 18 years of age or older, and your income must be below certain limits which vary by county. You can visit
    for more information.
  2. Maryland SmartBuy: This program offers assistance to homebuyers who have student loan debt. The program provides up to $40,000 in student debt relief in exchange for purchasing a home in one of Maryland's designated SmartBuy communities. Click this Link for a fact sheet about the program.
  3. Federal Grants: Check for federal grant programs like the Neighborhood Stabilization Program (NSP) and the Community Development Block Grant (CDBG), which may provide funding for affordable housing initiatives.
  4. Nonprofit Organizations: Some nonprofit organizations in Maryland focus on housing affordability and may offer grants or assistance to homebuyers in need.
  5. Employer Assistance: Some employers offer homebuyer assistance programs as part of their benefits package. Inquire with your HR department to see if any such programs are available.
  6. Create a Budget: Establish a monthly budget to track your income and expenses. Identify areas where you can cut back on non-essential spending to increase your savings rate.
  7. Automate Savings: Set up automatic transfers from your checking account to a dedicated savings account specifically for your down payment fund. This approach ensures consistent contributions and minimizes the temptation to spend the money elsewhere.
  8. Side Hustles: Consider taking up a part-time job or freelance work to generate additional income that can be funneled towards your down payment savings.
  9. First-Time Homebuyer Savings Accounts: This program allows individuals to contribute up to $5,000 a year into a designated account and deduct that amount from their state taxes. Up to $50,000 may be contributed or earned tax free if that money is used to pay downpayment or closing costs within 15 years of establishing an account.
  10. Gifts and Windfalls: If you receive monetary gifts or unexpected windfalls, consider saving a portion or all of the money towards your down payment fund.
  11. Downsize or Rent Out: If you currently own a home, consider downsizing or renting it out to generate extra cash flow for your next home's down payment.
  12. Crowdfunding or Community Programs: Explore creative options like crowdfunding platforms or community-based down payment assistance programs.

Saving Strategies for a Down Payment:

Saving for a down payment requires discipline and planning. While it may seem challenging, there are various common and unique ways to save money for your dream home:


Becoming a homeowner in Maryland involves understanding the down payment and closing costs required for the purchase. Thankfully, there are grants and assistance programs available to help alleviate the financial burden. Additionally, implementing smart savings strategies can significantly contribute to reaching your down payment goal. As a realtor, I am here to guide and support you throughout this exciting journey, turning your dream of homeownership in Maryland into a tangible reality. With careful planning and determination, you'll soon be holding the keys to your very own home in the beautiful state of Maryland.

More News from Towson
I'm interested
I disagree with this
This is unverified