Maryland's Blueprint for Maryland's Future sets a goal that every public school teacher earns at least $60,000 starting in 2026. That is a real step up for new teachers in many counties, but it raises an obvious question: what does $60,000 buy in a state where prices around Baltimore and Washington keep climbing? Here are three worked examples using the state's new First Homes for First Responders and Teachers loan.
How lenders decide what you can afford
Lenders look at your debt-to-income ratio (DTI): your total monthly debt payments, including the new house payment, divided by your gross monthly income. For Maryland Mortgage Program loans, automated underwriting generally allows up to 45% with a credit score under 680, and up to 50% with a score of 680 or higher.
Your house payment includes four pieces: principal and interest, property taxes, homeowners insurance and, on most low-down-payment loans, mortgage insurance. Car loans, student loans and credit card minimums count against the same limit.
Assumptions behind the numbers
- FHA loan with 3.5% down, financing the 1.75% upfront mortgage insurance premium
- First Homes government-loan rate of 7.125% from the MMP rate sheet dated October 2, 2026
- Annual FHA mortgage insurance of 0.55% of the loan
- Property taxes estimated at 1.1% of the price per year; Baltimore City and some municipalities run higher
- Homeowners insurance of $125 a month
These are estimates to help you plan. Your lender will run exact figures for your address and credit.
Example 1: A first-year teacher earning $60,000
Gross monthly income is $5,000. With a credit score under 680 and a $400 car payment, the 45% limit leaves about $1,850 a month for housing.
- Estimated price: about $216,000
- Loan amount: about $212,400
- Principal and interest: about $1,431 a month
- 5% assistance: about $10,600
The FHA down payment on that home is about $7,560, so the assistance covers it in full with roughly $3,000 left toward closing costs. At $216,000, this buyer is looking at condos and townhomes in much of the state, or single-family homes in parts of Baltimore City, Western Maryland and the Eastern Shore.
Example 2: A firefighter earning $75,000
Monthly income is $6,250. With the same $400 in other debt and a score under 680, the housing budget is about $2,410 a month.
- Estimated price: about $287,000
- Principal and interest: about $1,898 a month
- 5% assistance: about $14,100
That is a meaningful jump in options: many townhomes in Baltimore, Harford and Frederick counties fall in this range.
Example 3: A teacher and firefighter buying together
A household earning $135,000 combined has $11,250 a month. With a 680+ score, the 50% limit and $800 in other debt, housing can run about $4,825 a month.
- Estimated price: about $589,000
- Principal and interest: about $3,899 a month
- 5% assistance: about $28,900
Before chasing that number, check the program limits. In Baltimore County, for example, the non-targeted household income limit is $140,759 for one or two people and $161,873 for three or more, and the maximum purchase price outside Targeted Areas is $782,118. This couple fits. In some counties a household at this income would be close to the line, so look up your county before you shop.
What the lower First Homes rate adds
We ran the same three examples at 7.625%, the rate for the regular MMP 1st Time Advantage 5% loan on the same day. The lower First Homes rate adds roughly $8,000 of buying power for the $60,000 teacher, $12,000 for the $75,000 firefighter, and $23,000 for the two-income household, with the same monthly budget.
What about VA and USDA loans?
First Homes is offered on government loans, which include FHA, VA and USDA, as well as conventional loans through Fannie Mae and Freddie Mac. The math changes a little with each:
- VA loans require no down payment for eligible veterans and service members, so the full 5% assistance can go toward closing costs. VA loans carry a one-time funding fee instead of monthly mortgage insurance, unless you are exempt.
- USDA loans also allow zero down in eligible rural areas, with a guarantee fee and a small annual fee. Much of Western Maryland and the Eastern Shore can qualify.
- Conventional loans can make sense with a credit score in the 700s. The First Homes conventional rate on October 2, 2026 was 7.500%, and private mortgage insurance can be removed once you build enough equity.
Ask your loan officer to price at least two loan types for the same home. The cheapest option depends on your credit score and service history.
Ways to stretch your budget
- Pay down a car loan or card first. Every $100 of monthly debt you eliminate adds roughly $12,000 to $13,000 of purchase price at today's rates.
- Raise your credit score above 680. Crossing that line can move your DTI limit from 45% to 50%.
- Look at Targeted Areas. They come with higher income and price limits. Our guide to Maryland Targeted Areas explains how they work.
- Use outside help. First Homes can be combined with assistance from employers, builders and nonprofits that meets program rules.
What you need cash for
The 5% assistance usually covers the FHA down payment and part of closing costs, but plan for an earnest money deposit with your offer, a home inspection and an appraisal, which are often paid before closing. A small cushion of savings also makes underwriting easier. Keep in mind that if liquid assets top 20% of the purchase price, the lender has to run an extra asset test.
Next step
These examples are a starting point. To see your own numbers, use the calculator on our First Homes overview or take the eligibility check, and a loan officer who offers the program will price it for your county and credit.