What Is the Maryland SmartBuy 3.0 Program?
The Maryland SmartBuy 3.0 program is an official initiative of the Maryland Mortgage Program (MMP). It allows qualifying homebuyers to consolidate home financing and student loan elimination into a single real estate closing transaction. Instead of saving for a down payment while simultaneously paying down student debt, buyers can resolve both financial milestones at once.
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How Much Student Debt Does Maryland SmartBuy Pay Off?
Maryland SmartBuy provides up to 15% of the home’s purchase price, capped at a strict maximum of $25,000.
- If your student debt is under $25,000: The program pays off the full remaining balance.
- If your student debt is over $25,000: The program pays up to $25,000, and the borrower must pay the remaining balance out of pocket at closing.
The financial assistance is issued as a 0% interest loan with no monthly payment. It features a 5-year forgiveness clause tied to primary residency occupancy.
Detailed Eligibility Requirements for Maryland SmartBuy 3.0
To qualify for the Maryland SmartBuy 3.0 program, applicants must meet all the following eligibility criteria:
- Student Loan Debt: Must have a minimum remaining student loan balance of Full
- Liquidation Requirement: The program must completely eliminate the student debt balance for at least one borrower at closing. Any balance exceeding the $25,000 cap must be paid out of pocket by the buyer at closing.
- Credit Profile: Must possess a minimum credit score of 720.
- First-Time Homebuyer Status: Must be a first-time homebuyer, unless purchasing a home located in a state-designated “Targeted Area.”
- Property Restrictions: Borrowers cannot own any other real property at the time of closing.
- Occupancy: Must occupy the purchased property as their primary residence.
- Education: Must complete an approved Homebuyer Education class
- MMP Framework: Must meet standard MMP eligibility requirements, including income limits, credit score, and purchase price limits
- Approved Network: Must work with an approved Maryland SmartBuy lender
Want to know what you can afford before you go further? Get your free rate quote.
Can I Combine Maryland SmartBuy With Down Payment Assistance?
Yes. Maryland SmartBuy can be combined with one standard MMP down payment assistance option, if you qualify:
- $6,000 Assistance: A deferred, 0% interest loan you can put toward your down payment and closing costs.
- 6% Assistance: A deferred, 0% interest loan equal to 6% of your first mortgage, available only if your household income is at or below 50% of the Area Median Income (AMI).
Is Maryland SmartBuy 3.0 Right for You?
Buying a home while carrying student debt can feel out of reach. If you meet the eligibility requirements above, Maryland SmartBuy 3.0 is built to make it possible, and pairing it with $6,000 or 6% Assistance can stretch your buying power further.
If you don’t meet SmartBuy’s specific requirements, our guide to first-time homebuyer loan options and programs covers other paths to homeownership with little to no down payment.
A DML loan officer who’s an approved Maryland SmartBuy lender can walk through your specific student loan balance, income, and credit profile to see what you qualify for.
How Do I Apply for Maryland SmartBuy 3.0?
- Take Homebuyer Education. Complete an approved class and get your certificate.
- Get pre-approved. Work with an approved Maryland SmartBuy lender to see what you can comfortably afford. Start your pre-approval with DML.
- Find a realtor. A realtor helps you find homes that fit your needs and budget.
- Submit an offer. Your realtor will guide you on a competitive offer and any contingencies.
- Complete the loan application. Your loan officer walks you through inspection, appraisal, and underwriting, and confirms your student debt payoff amount.
- MMP review. Your loan officer submits your file to the Maryland Mortgage Program team to confirm it meets state requirements, then schedules your closing.
- Close. Sign your paperwork, pay off your student debt, and get your keys. You’re a homeowner.
New to the process overall? Our step-by-step guide to buying a house walks through each stage in more detail.
Frequently Asked Questions
What is the maximum amount Maryland SmartBuy will pay toward my student loans?
Up to 15% of your home’s purchase price, capped at $25,000. If your student debt balance is higher, you cover the difference out of pocket at closing.
Do I have to be a first-time homebuyer to qualify?
Not always. You need to be a first-time homebuyer unless you’re purchasing in a Targeted Area, in which case repeat buyers can qualify too.
Can I use Maryland SmartBuy with other down payment assistance?
Yes, you may be able to combine it with one standard MMP option: the $6,000 Assistance loan, or the 6% Assistance loan if your household income is at or below 50% of the Area Median Income.
What credit score do I need for Maryland SmartBuy 3.0?
A minimum credit score of 720.
Does the student debt assistance loan have a monthly payment?
No. It’s a 0% interest loan with no monthly payment, forgiven in full after five years as long as you stay in the home.
What if I don’t have enough saved for a down payment even with SmartBuy?
SmartBuy addresses your student debt, not your down payment directly, though it can be paired with $6,000 or 6% Assistance. If you’re still short, our guide to zero-down FHA financing covers another route to homeownership with little to no money down.
Not Sure If You Qualify?
Down payment assistance programs come with specific income, credit, and purchase price limits set by the state. Talk with a Direct Mortgage Loans loan officer to see whether Maryland SmartBuy 3.0, paired with $6,000 or 6% Assistance, fits your situation.
See also: How to Buy a Home With Student Debt for a broader look at financing options if you’re outside Maryland or don’t meet SmartBuy’s requirements.
*Based on 30 year fixed rate loans. Loans are subject to Eligibility. Eligibility and approval is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, Veteran status and underwriting requirements. Direct Mortgage Loans, LLC NMLS ID# is 832799 (www.nmlsconsumeraccess.org). Direct Mortgage Loans, LLC office is located at 11011 McCormick Rd Suite 400 Hunt Valley, MD 21031. Equal housing lender.
