First Time Home Buyers in Annapolis, MD: A Step-by-Step 2026 Guide

by Jen Holden

Updated on: November 2, 2026

By Jen Holden Updated November 2026

First-time home buyers in Annapolis, MD, meaning anyone who has not owned a home in the past three years, can finance a purchase with Maryland Mortgage Program loans and Anne Arundel County assistance through ACDS.

Key Takeaway

Qualifying first-time buyers in Annapolis can pair a Maryland Mortgage Program loan with Anne Arundel County (ACDS) assistance, and the order matters. Before you go under contract, finish the required education and counseling and get pre-approved by a participating lender, because ACDS counseling must be finished before you sign a contract and assistance must be approved before closing (Step 2). Budget for the full monthly payment, including taxes, insurance and HOA or condo fees, and check the first-time buyer transfer tax relief in Step 5.

Who This Guide Is For

People buying their first home, or their first in three years, in Annapolis or elsewhere in Anne Arundel County.

First-Time Home Buying in Annapolis at a Glance

First-time buyer: no home owned in the past three years.
ACDS loan: up to $50,000, income at or below 100% of AMI.
MMP income limits: $140,759 (1 to 2 people), $164,520 (3 or more).
ACDS counseling: finish before signing a contract; allow 2 to 4 months.
First-time Maryland buyers: state transfer tax drops to 0.25%, seller pays.

What First-Time Buyers Should Expect in the Annapolis Market

Current prices set your first decision: which property type fits both your budget and the program caps. Check the current median home price in Annapolis, MD, and compare it with the MMP purchase-price cap for Anne Arundel County. Townhomes and condos are the common entry points for first-time buyers. Well-priced homes draw competition, so have a pre-approval in hand before you tour seriously (Step 1). Annapolis housing market trends shift through the year, so review recent comparable sales before you set an offer price.

What First-Time Buyers Get in Maryland and Anne Arundel County

Annapolis buyers can draw on three kinds of help:

statewide Maryland Mortgage Program loans
the county's ACDS assistance loan
price-restricted MPDU homes

ACDS assistance can be used together with an MMP loan.

Maryland Mortgage Program (MMP)

MMP loans are 30-year fixed-rate mortgages made through state-approved lenders listed on Maryland DHCD's MMP site. The 1st Time Advantage line offers zero-interest, deferred second-lien down payment assistance:

1st Time Advantage 6000: a $6,000 loan for down payment and closing costs, with no payments until the first mortgage ends through sale, refinance, transfer or payoff.
Percentage options: 3%, 4% or 5% of the first mortgage, on the same zero percent deferred terms.
Partner Match: available only with the 1st Time Advantage 6000 or Flex 6000 product. MMP matches a contribution from a participating partner, such as an employer, union or builder, with up to an additional $2,500. Ask your employer, union or builder whether it participates before you choose a product.

You must meet the credit score and other requirements of your chosen loan type. Specialty products include:

HomeAbility for buyers with disabilities
SmartBuy for paying off student debt (SmartBuy 3.0 requires a 720 credit score)
Flex loans for repeat buyers

As of June 24, 2026, Anne Arundel County income limits are $140,759 for a household of one or two and $164,520 for three or more, with higher limits in targeted areas. The Maryland HomeCredit Program, a mortgage credit certificate, is offered statewide but cannot be combined with 1st Time Advantage loans.

ACDS Mortgage Assistance Program

ACDS offers deferred loans for down payment and settlement costs on homes in Anne Arundel County. The loan carries zero percent interest and no payments. It comes due when you sell or transfer the home or after 30 years, whichever comes first.

To qualify, you must contribute at least 1% of the sales price from your own funds and graduate from the ACDS Homeownership Counseling Program.

County Executive Steuart Pittman and ACDS CEO Erin Karpewicz expanded the program from 80% of area median income and a $40,000 maximum to 100% of AMI and the current maximum, making almost half of the county workforce eligible. As of June 1, 2026, that income cap runs from $93,500 for one person to $154,875 for six.

Moderately Priced Dwelling Units (MPDUs)

MPDUs are price-restricted homes sold through a county program administered by ACDS. To buy one:

You must live in Anne Arundel County or have worked there for at least six months.
You must earn at or below area median income for the Baltimore-Columbia-Towson area, adjusted for household size.
You need homebuyer classes from ACDS, the Anne Arundel County Community Action Agency or another HUD-certified counselor.
You need an ACDS Certificate of Eligibility before signing a sales contract.

The City of Annapolis MPDU program also requires that you not currently own a home. ACDS asks MPDU applicants for a lender pre-approval as part of the application, so get pre-approved (Step 1) before you apply.

Rules That Apply to Every Program

The home must be your primary residence. MMP is statewide, while county and city programs follow the location of the home you buy. A buyer weighing a home in Baltimore City or Baltimore County should check that jurisdiction's program. Terms for each Annapolis homebuyer program change, so confirm amounts with the agency before you apply.

Step 1: Set Your Budget and Get Pre-Approved

Work through these in order:

Credit: pull your credit report and score, and dispute errors early.
Savings: total what you have for the down payment and closing costs. The state and county assistance above can cover part of both.
Loan type: FHA requires 3.5% down with a 580 score or higher, or 10% down with a score of 500 to 579. Fannie Mae HomeReady and Freddie Mac Home Possible require 3% down on a one-unit home. VA loans need no down payment or mortgage insurance for eligible veterans with full entitlement.
Full monthly payment: add principal, interest, property taxes (Annapolis owners pay both city and county tax), homeowners insurance, mortgage insurance and HOA or condo fees. Lenders count HOA and condo fees in your debt-to-income ratio, so a cheaper condo with high fees can shrink the loan you qualify for.
Documents: ID, recent pay stubs, W-2s or 1099s, tax returns, and bank and investment statements.
Lender: get pre-approved by a lender on DHCD's MMP list or an ACDS associate lender, because only participating lenders can include the assistance. Compare rates and fees, and expect a hard credit pull.

How much house you can afford in Annapolis comes from that full payment, not the list price.

Step 2: Complete Homebuyer Education and Apply for Assistance

Take the required course, then apply through the participating lender. Assistance is funded as part of your loan closing, so it must be approved before then and cannot be added afterward.

MMP education: the ACDS Homeownership Counseling Program and other HUD-certified agencies, such as the Anne Arundel County Community Action Agency, satisfy the state requirement. Online and in-person certificates are both accepted, and the ACDS certificate is valid for one year.
ACDS counseling: you must finish before signing a contract, and ACDS does not accept clients already under contract. The course is four classes totaling eight hours, and the first class is often booked six to eight weeks out. Completion takes two to four months on average, so start before you begin house hunting.
Checking a program: a real grant or assistance program appears on Maryland DHCD's MMP pages or the ACDS or Anne Arundel County site. You apply through an approved lender or the agency itself. Be wary of any site that charges a fee to "apply" for a grant.

Step 3: Choose Where and What to Buy

Compare property types on objective trade-offs:

Condos: often the lowest price and least exterior upkeep, but they come with monthly fees and association rules on rentals, pets and parking. Financing can depend on the building.
Townhomes: more space than most condos, with some exterior maintenance and often an HOA with rules on exterior changes.
Single-family detached homes: the highest price and full maintenance responsibility, with more control over the property and typically no shared walls.

Route 50 toward Washington and I-97 toward Baltimore are the main commuter routes, so test the drive at rush hour. Confirm a home's school assignment with the Anne Arundel County Public Schools locator, because listing school information can be out of date. When comparing Annapolis neighborhoods, score each one on the same price, fee and commute criteria. Buyers narrowing down their location can read our ultimate guide for Annapolis.

Step 4: Make an Offer, Inspect, and Check Annapolis-Specific Issues

These items shape your offer and your inspection period:

Buyer agency agreement: read the agreement your agent asks you to sign, including how your agent is paid, before you tour homes together. When choosing a buyer's agent in Annapolis, ask how they handle assistance-program timelines and condo resale packages.
Offer terms: price, earnest money deposit, a financing contingency (important when assistance approval adds time), an appraisal contingency, and a home inspection contingency. You pay for the inspection.
Historic district: exterior changes to homes in the Annapolis Historic District can require approval from the city's Historic Preservation Commission. Check with the city before budgeting for windows, siding, additions or other exterior work.
Flood risk: enter the address in FEMA's Flood Map Service Center (msc.fema.gov) to see the flood zone. If the home sits in a Special Flood Hazard Area, federal law requires flood insurance on a federally backed mortgage. Maryland sellers currently disclose only two things: whether water stands more than 24 hours after heavy rain, and whether the property is in a flood zone. A more detailed form under HB 200 is not required until July 1, 2027. Get a flood insurance quote before your inspection period ends.
Condo documents: the complete resale package is normally due at least 15 days before closing. Once you receive it, you have 7 days to cancel in writing without penalty.
HOA documents: if you did not receive the package at least 5 calendar days before signing, you have 5 calendar days after receiving it to cancel in writing.

Read fees, reserves, special assessments and rules in either package.

Step 5: Closing Costs and Closing Day

Transfer and recordation taxes are among the largest closing costs:

State transfer tax: 0.5% of the price, customarily split between buyer and seller. For a first-time Maryland homebuyer buying a principal residence, it drops to 0.25% and the seller must pay all of it.
Anne Arundel County transfer tax: 1.0% under $1 million (1.5% at $1 million or more). An owner-occupant buyer who files the required affidavit is exempt on the first $50,000 of the price.
County recordation tax: $7.00 per $1,000 of the price (0.7%).

Except for the first-time buyer rule, the contract can change who pays each tax.

On closing day:

Compare your Closing Disclosure with your Loan Estimate before settlement.
Do a final walkthrough.
Bring ID and funds as the title company instructs.
Confirm wiring instructions by phone with the title company before sending money.

The title company or settlement attorney handles the paperwork. An itemized list of buyer closing costs in Annapolis adds lender, title and prepaid items to these taxes. If you are planning your first purchase, talk with Jen Holden about your timeline and options.

Frequently Asked Questions

Who Is Considered a First-Time Homebuyer in Maryland?

Generally, it is someone who has not owned a primary residence in the past three years, so previous homeowners can qualify again. MMP waives the requirement in designated targeted areas, and a participating lender confirms whether a home's location qualifies.

Do I Need to Take a Homebuyer Education Class in Maryland?

Yes, to use MMP or ACDS assistance. MMP requires a state-approved course, and ACDS requires graduation from its own Homeownership Counseling Program, which also meets the state requirement.

What Is the Maximum Purchase Price for MMP Assistance in Anne Arundel County?

MMP caps the purchase price, called the maximum acquisition cost, by county. Anne Arundel's caps appear in the same table as its income limits, with different limits in targeted areas. The caps change periodically, so have your loan officer confirm the one for your loan product before you make an offer.

Is the First-Time Homebuyer Tax Credit Still Available?

In Maryland, yes. The state's HomeCredit Program issues mortgage credit certificates through MMP to buyers statewide, including in Annapolis. Your lender can show whether HomeCredit or 1st Time Advantage assistance saves you more, and a tax professional can confirm any federal credit claim before you count on it.

Is the $25,000 First-Time Home Buyer Grant Real, and How Do I Apply?

No. The $25,000 grant comes from the Downpayment Toward Equity Act of 2025 (H.R. 4069, introduced June 23, 2025, and S. 967, introduced March 11, 2025). Neither bill has passed either chamber, so there is nothing to apply for in 2026. The real local options are MMP down payment assistance and the ACDS loan.

Can I Use First-Time Buyer Assistance on a Condo or Townhome in Annapolis?

Yes. MMP covers detached, semi-detached and townhouse homes and condo units, and ACDS lists the same property types within Anne Arundel County. A condo building must meet lender project approval standards, such as FHA, VA or Fannie Mae and Freddie Mac review, before MMP financing can be used, so ask your lender whether it qualifies before you make an offer.