Title 4. Division of Development Finance — Subtitle 3. Down Payment and Settlement Expense Loan Program
Statutes in effect as of October 1, 2026.
Md. Code Ann., Hous. & Cmty. Dev. § 4-301 (2026)
Title 4. Division of Development Finance
Subtitle 3. Down Payment and Settlement Expense Loan Program
§ 4–301LinkCopy Citation
(a)
In this subtitle the following words have the meanings indicated.
(b)
“Eligible homebuyer” means an individual who meets the qualifications under § 4-305 of this subtitle.
(c)
“Fund” means the Homeownership Programs Fund.
(d)
(1)
“Homebuyer education” means instruction in preparing for homeownership, shopping for a home, getting a mortgage loan, loan closing, and life as a homeowner.
(2)
“Homebuyer education” includes housing counseling.
(e)
“Program” means the Down Payment and Settlement Expense Loan Program.
(f)
“Program loan” means a loan that the Department makes under this subtitle.
(g)
(1)
“Settlement expenses” means money that must be paid at the time of the purchase of real estate.
(2)
“Settlement expenses” includes:
(i)
fees and premiums for title examination, title insurance, and similar expenses;
(ii)
fees for preparing deeds, settlement statements, and other documents;
(iii)
payments owed at settlement for property taxes and hazard insurance coverage;
(iv)
escrows for future payments of taxes and hazard insurance;
(v)
fees for notarizing deeds and other documents;
(vi)
appraisal fees;
(vii)
fees for credit reports;
(viii)
transfer and recordation taxes and fees;
(ix)
fees and premiums for mortgage insurance; and
(x)
loan discount points and origination fees.
Md. Code Ann., Hous. & Cmty. Dev. § 4-302 (2026)
Title 4. Division of Development Finance
Subtitle 3. Down Payment and Settlement Expense Loan Program
§ 4–302LinkCopy Citation
There is a Down Payment and Settlement Expense Loan Program.
Md. Code Ann., Hous. & Cmty. Dev. § 4-303 (2026)
Title 4. Division of Development Finance
Subtitle 3. Down Payment and Settlement Expense Loan Program
§ 4–303LinkCopy Citation
The purpose of the Program is to provide financing for down payment and settlement expenses to enable eligible homebuyers to purchase homes.
Md. Code Ann., Hous. & Cmty. Dev. § 4-304 (2026)
Title 4. Division of Development Finance
Subtitle 3. Down Payment and Settlement Expense Loan Program
§ 4–304LinkCopy Citation
(a)
The Department may:
(1)
charge an application fee or other fee to a Program loan applicant or lender;
(2)
purchase or make commitments to purchase Program loans made by mortgage lenders;
(3)
make contracts with third parties to make or service mortgage Program loans made for the Department;
(4)
acquire any property that secures a Program loan under this subtitle by gift, purchase, foreclosure, or otherwise, and sell or otherwise dispose of the property or an interest in the property;
(5)
delegate to a political subdivision any administrative or operational element of the Program not assigned to the Department under subsection (b) of this section;
(6)
take any other action necessary or convenient to operate the Program; and
(7)
require a political subdivision that administers its own down payment and settlement expense loan program to inform the Department of the political subdivision’s homebuyer education requirements.
(b)
The Department shall:
(1)
administer the Program;
(2)
attach to a Program loan the terms needed to carry out the Program;
(3)
establish eligibility standards for Program loans, considering State, regional, and county housing costs, median incomes, and household sizes;
(4)
establish guidelines to determine what parts of the down payment and settlement expenses may be covered by the Program loan; and
(5)
adopt regulations to carry out the Program.
(c)
The sale or purchase of property that the Department acquires or disposes of under this section need not be approved or executed by the Board of Public Works or the Department of General Services.
Md. Code Ann., Hous. & Cmty. Dev. § 4-305 (2026)
Title 4. Division of Development Finance
Subtitle 3. Down Payment and Settlement Expense Loan Program
§ 4–305LinkCopy Citation
An individual qualifies as an eligible homebuyer if the individual:
(1)
will purchase and occupy a single-unit principal residence and has household income not exceeding upper limits that the Secretary establishes; or
(2)
will purchase and occupy a residential building with no more than four units and agrees to rent all units other than the owner’s unit to households with income not exceeding upper limits that the Secretary establishes.
Md. Code Ann., Hous. & Cmty. Dev. § 4-306 (2026)
Title 4. Division of Development Finance
Subtitle 3. Down Payment and Settlement Expense Loan Program
§ 4–306LinkCopy Citation
The Program shall be operated with money in the Fund.
Md. Code Ann., Hous. & Cmty. Dev. § 4-307 (2026)
Title 4. Division of Development Finance
Subtitle 3. Down Payment and Settlement Expense Loan Program
§ 4–307LinkCopy Citation
(a)
Proceeds of a Program loan shall be used only to make a down payment or pay settlement expenses for an eligible homebuyer to purchase a personal residence.
(b)
A Program loan shall be secured by a mortgage lien that:
(1)
may be subordinate to other mortgage liens; and
(2)
may include terms, including deferred payment of principal and interest, that the Department considers necessary to make housing purchases affordable to eligible homebuyers.
(c)
In reviewing an application for a Program loan, the Department shall:
(1)
consider the eligible homebuyer’s financial resources, including savings available to make a down payment or pay settlement expenses, in relation to:
(i)
the purchase price of the home; and
(ii)
the down payment requirements of the lender; and
(2)
give high priority to eligible homebuyers of low income within the income limits established under § 4-304(b)(3) of this subtitle.
(d)
Notwithstanding any other law, the Department may require that Program loans become due and payable on the later sale or transfer of the property, but the Department may allow an eligible homebuyer who purchases the property to assume the Program loan.
(e)
If a borrower defaults, the Department may modify the interest rate, the time or amount of payment, or any other term of a Program loan to facilitate repayment of the Program loan and to achieve the purpose of the Program.
Md. Code Ann., Hous. & Cmty. Dev. § 4-308 (2026)
Title 4. Division of Development Finance
Subtitle 3. Down Payment and Settlement Expense Loan Program
§ 4–308LinkCopy Citation
(a)
Subject to subsection (b) of this section, a recipient of a Program loan shall complete homebuyer education that meets the requirements of the Department.
(b)
The Department’s homebuyer education requirements shall:
(1)
allow a Program loan recipient to use the online homebuyer education for a HUD–approved product and contact a HUD–approved counseling agency to receive a certificate; and
(2)
enable one political subdivision’s certificate to be used in another political subdivision.
(c)
This subtitle does not alter or preempt the authority of a political subdivision to establish homebuyer education or counseling requirements for a down payment assistance program operated by the political subdivision.
Md. Code Ann., Hous. & Cmty. Dev. § 4-309 (2026)
Title 4. Division of Development Finance
Subtitle 3. Down Payment and Settlement Expense Loan Program
§ 4–309LinkCopy Citation
(a)
(1)
A person may not knowingly make or cause to be made a false statement or report in a document required to be submitted to the Department under an agreement relating to a Program loan.
(2)
A loan applicant may not knowingly make or cause to be made any false statement or report to influence an action of the Department on a Program loan application or a Program loan already made.
(b)
A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both.