When you start looking for your first home, the first hurdle you encounter is the down payment. Hearing that you need to save a certain percentage of the home price in cash makes you wonder if you need to rent for a few more years.

However, during consultations, many people surprisingly don't know about state government down payment assistance programs and go all the way to the contract stage without this knowledge. Today, I'll outline where to start looking based on Maryland.

The starting point is the Maryland Department of Housing and Community Development (DHCD), which operates the Maryland Mortgage Program, abbreviated as MMP. Most state assistance funds are provided through this program, bundled with the first mortgage.

The most commonly used product is the 1st Time Advantage series. As the name suggests, it's designed for first-time homebuyers.

The criteria for first-time homebuyers are broader than you might think. MMP considers you a first-time buyer if you haven't owned a residential property in the last three years.

This means that if you owned a home in Korea or sold a house in the U.S. more than three years ago, you may still qualify. There are exceptions if you buy in a targeted area or are a veteran meeting certain conditions.

There are two main types of assistance. One is a percentage of the first mortgage amount, and the other is a fixed amount of assistance.

According to MMP official materials, the 1st Time Advantage 5% product provides 5% of the first mortgage amount as assistance. There's also a 3% product, and a fixed amount of $6,000 available through the $6000 product.

Looking at the numbers helps clarify things. If the first mortgage is $300,000, the assistance for the 5% product would be $15,000, while the 3% product would provide $9,000.

However, remember that this is not free money; it's a second lien. The interest is 0%, and there are no monthly payments.

Instead, you must repay it all at once when you sell the house, refinance, or pay off the first mortgage. If you plan to switch homes in a few years, it's wise to factor this into your calculations.

If your household income is at or below 50% of the area median income (AMI), there's also a product called HomeStart. This program is structured to provide assistance of up to 6% of the first mortgage.

Additionally, all MMP borrowers must complete homebuyer education before closing. This education must be from a program approved by HUD, Fannie Mae, or Freddie Mac.

I've seen cases where people tried to cram this education in right before the contract, leading to scheduling conflicts. I recommend finishing it before you start looking at homes.

You don't apply for MMP directly; you go through an approved lender. So, when choosing a bank, the first step is to ask if they participate in this program.

That covers the state-level assistance, and next is county and city-level support. These can sometimes be used together if you meet the criteria, so it's essential to look at both.

The MMP website has a separate list of down payment assistance programs by region. You can find the relevant local programs and contact information by searching by county and city name.

There are significant regional differences. Some areas, like Montgomery County or Prince George's County, offer up to $50,000 in assistance.

For example, in western Maryland, Hagerstown has provided down payment and closing cost assistance of up to $7,500 through the Hagerstown Homeownership Initiative.

This program is structured so that a 0% interest loan can convert to a grant if certain conditions are met. If you live there as your primary residence for more than five years, the entire amount is forgiven.

The home must be within city limits, and it's first-come, first-served, with applications needing to be submitted at least 30 days before closing. First-time buyers and current renters are given priority.

However, the city's website has posted a notice that the budget for the 2026 fiscal year has been exhausted. You'll need to check directly with the city's housing department to see if the new fiscal year budget has opened.

These local programs can close immediately when funds run out. Making a quick phone call at the start of your home search can make a difference.

If you find it challenging to navigate this on your own, you can use HUD-approved housing counseling agencies. For residents of Washington County, non-profit organizations like Hagerstown Neighborhood Development offer both purchase counseling and credit counseling.

Let's recap the steps. First, complete the homebuyer education.

Next, get pre-approved through an MMP-approved lender while checking your eligibility for the 1st Time Advantage product. Finally, check the MMP regional list for available county and city assistance.

Income limits and purchase price limits vary by county and household size and change frequently. It's safest to refer to the latest information on mmp.maryland.gov rather than relying on blog or advertisement numbers.

Personally, I recommend looking at the repayment conditions before the amount of assistance. Even if it's the same $10,000, the implications of money forgiven after five years versus money that must be repaid when selling the house are entirely different.

If I were preparing to buy my first home, I would first decide how many years I plan to live there and then consider combining grant-based local assistance with MMP loans. If you've been hesitating due to the down payment, take a look at the list for your area today.