Maryland SmartBuy 3.0 (Student Debt Payoff)

At a glance

Amount

Pays off up to 15% of the purchase price in student loans, capped at $25,000, plus optional $6,000 or 6% down payment help

Type of help

Forgivable loan

Where

Statewide, Maryland

Run by

Maryland Department of Housing and Community Development, Community Development Administration (Maryland Mortgage Program)

First-time buyer

First-time buyers, with exceptions

Income limit

Yes, see below

Price limit

Yes, see below

Minimum credit score

720

Homebuyer education

Required

How the forgivable loan works

A second loan with no payment that is forgiven over time or after a set number of years in the home.

• Interest: 0% on the student debt note and on any MMP second loan
• Monthly payment: None
• Forgiveness: 20% forgiven on each anniversary of closing, fully forgiven after 5 years if you have not sold the home
• When you would repay: Sell before year 5 and the unforgiven balance of the student debt note is due. Any MMP down payment second loan is due when the first mortgage ends

Who qualifies

• First-time buyers, with exceptions. First-time means no principal residence owned in the last 3 years. Waived for Targeted Area purchases and for honorably discharged veterans using the one-time exemption. You cannot own any other real property at closing.
• Income. The standard MMP county income table applies (effective 2026-06-24), by household size. See the full 24-jurisdiction table on the MMP 1st Time Advantage 6000 page. Buyers above and below 80% AMI both qualify. Only borrowers at or below 50% AMI can take the 6% down payment option instead of the flat $6,000.
• Price. Standard MMP maximum acquisition cost by county (effective 2026-06-24), for example $782,118 in the Baltimore metro counties and $1,306,974 in Montgomery and Prince George's. The first mortgage cannot exceed $832,750.
• Property types: Single-family detached, Townhouse, Condo, Modular home. Must be your primary residence.
• At least $1,000 in student loan debt that shows on your credit report, was used for your own education at an accredited school, and is current. Personal loans from individuals do not count.
• The entire student loan balance for at least one borrower must be paid to zero at closing. Partial payoffs are not allowed. If the balance is above the SmartBuy cap, you pay the difference yourself.
• Conventional 30-year first mortgage only, up to 97% of the price, with combined loan-to-value up to 105%.
• Principal residence only. DHCD-owned REO homes are not eligible.

Income limits below are the shared table published for MMP 1st Time Advantage 6000, which this program uses too.

How to apply

1. 1Choose a lender from the MMP approved lender directory (the directory lets you filter for lenders who offer SmartBuy).
2. 2Gather a current statement from each student loan servicer showing the payoff balance. Your lender confirms the debt qualifies and fits the 15% / $25,000 cap.
3. 3Finish an approved homebuyer education course within 12 months before settlement.
4. 4After your contract is ratified the lender reserves the loan. At closing the student debt is paid off directly and the payoff appears on your Closing Disclosure. Post-closing, the lender documents that the balance is zero.

Watch out for

• The 720 minimum credit score is higher than the 640 standard for other MMP products.
• The payoff must clear the whole balance for at least one borrower. If you owe $40,000 and the cap on your price is $25,000, you bring $15,000 to closing or SmartBuy is not a fit.
• Forgiveness is tied to keeping the home. Sell in year 3 and you repay the remaining 40% of the note.
• A rate-and-term refinance can keep the note on its forgiveness schedule if CDA or the servicer is notified, but any MMP down payment second loan is due if you refinance outside MMP.
• Partner Match cannot be added to SmartBuy.

Straight answers

Sources

• Maryland SmartBuy Loan product page (read Sep 22, 2026)
• MMP fact sheet: Maryland SmartBuy 3.0 (updated 2026-06-01) (read Sep 22, 2026)
• MMP Directive 2026-03: Maryland SmartBuy Loan Limit Increase to $25,000 (read Sep 22, 2026)
• MMP Directive 2026-04: 2026 Income and Purchase Price Limits (read Sep 22, 2026)

Program details are summarized from public sources and change without notice. Funding badges reflect the last time we checked, not a guarantee of availability. This is buyer education from a real estate agent, not a loan pre-approval or a commitment to lend. Eligibility is decided by each program administrator and your lender. Equal Housing Opportunity.