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Image of Harrison Greenough, REALTOR®, a Baltimore area real estate agent licensed in Maryland
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Image of Harrison Greenough, REALTOR®, a Baltimore area real estate agent licensed in Maryland

Maryland SmartBuy for Homebuyers with Student Debt

Oh, you.

Student debt can affect both savings and mortgage qualification. Maryland SmartBuy combines an eligible Maryland Mortgage Program home loan with assistance intended to fully pay off qualifying student debt for at least one borrower, subject to current program rules, underwriting, available funding, and approval by a SmartBuy-approved lender.

Student-debt assistance

The maximum SmartBuy student-debt assistance is the lesser of:

  • the qualifying student-debt balance being paid off;
  • 15% of the home purchase price; or
  • $25,000.

The transaction must completely pay off the eligible student debt of at least one borrower. If that borrower’s qualifying balance exceeds the assistance ceiling, the borrower must pay the difference at closing. The assistance is not cash paid to the buyer, and unused eligibility is not paid out.

Core eligibility points

  • At least one borrower must have a qualifying student-debt balance of $1,000 or more.
  • The debt receiving assistance must belong to the borrower, have been used for that borrower’s education, appear on the borrower’s credit report, and meet the current documentation and eligible-institution rules.
  • The borrower must be current on the qualifying student-debt obligation at reservation and closing.
  • The minimum required middle credit score is 720.
  • The borrower must satisfy the Maryland Mortgage Program’s first-time-homebuyer rule or a current official exception. Current detailed terms include targeted-area and qualifying veteran provisions; a SmartBuy-approved lender must confirm whether an exception applies.
  • The borrower may not own any other real property at closing.
  • The purchased home must be an eligible Maryland property used as the buyer’s primary residence. Current SmartBuy terms exclude DHCD REO properties.
  • The transaction must use a SmartBuy-approved Maryland Mortgage Program lender and an eligible SmartBuy mortgage product.
  • The borrower must complete an approved Homebuyer Education class before closing.
  • Maryland Mortgage Program household-income, purchase-price, asset, debt-to-income, property, mortgage-insurance, investor, underwriting, and other requirements apply.

Forgiveness and repayment

The student-debt assistance is documented by a 0% deferred promissory note. Current official terms forgive 20% on each anniversary over five years, with no monthly payment during that period. If the property is sold before the five-year forgiveness period ends, the remaining unforgiven balance must be repaid. Ask a SmartBuy-approved lender to explain the official note, including the effect of a future sale, refinance, transfer, or occupancy change, before relying on the assistance.

Optional down-payment assistance

If eligible, a SmartBuy borrower may select one of the current SmartBuy down-payment-assistance options:

  • a $6,000 DPA loan; or
  • a DPA loan equal to 6% of the first mortgage, available only when household income is at or below 50% of Area Median Income.

These DPA options are 0% deferred second mortgages due upon sale, payoff, transfer, or refinance of the first mortgage. The Maryland Mortgage Program Partner Match is not available with SmartBuy 3.0. Other outside assistance may be permitted only when all Maryland Mortgage Program, investor, underwriting, and combined-loan-to-value requirements are met.

How to prepare

  1. Review the current official SmartBuy page and fact sheet.
  2. Use the official lender directory and filter for a SmartBuy-approved lender.
  3. Ask the lender to identify which borrower’s qualifying debt would be fully paid and to calculate any borrower-paid difference.
  4. Gather current student-loan statements and payoff documentation.
  5. Complete the required approved Homebuyer Education class.
  6. Confirm that the property, loan product, income, purchase price, and contract timing satisfy current rules before relying on assistance.

Frequently asked questions

Can SmartBuy pay only part of my student loan? The eligible student debt of at least one borrower must be completely paid off. When the qualifying balance exceeds the assistance ceiling, the borrower must pay the difference at closing.

Does every borrower need student debt? Not necessarily. At least one borrower whose debt receives assistance must satisfy the current debt and payoff requirements. A SmartBuy-approved lender must review the complete borrower structure.

Can I use any Maryland Mortgage Program lender? No. The lender directory must identify the lender as approved for SmartBuy.

Can SmartBuy finance an investment property? No. The purchased home must be the buyer’s primary residence.

Is the assistance automatically forgiven at closing? No. The current promissory note is forgiven over five years at 20% per anniversary, subject to its terms.

Official SmartBuy resources

Important program information

Last reviewed: July 28, 2026. Program details, funding, limits, approved products, and eligibility can change. This page is educational and is not a commitment to lend, approval, legal or financial advice, or a guarantee of assistance. Official Maryland Mortgage Program documents control. Confirm every term with the program and a SmartBuy-approved lender before relying on it.

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