What down payment assistance is available in Montgomery County?
A county layer, an employee layer and a municipal layer
Montgomery County buyers have access to more assistance than almost anywhere else in Maryland:
- Montgomery Homeownership Program — up to $50,000, capped at 40% of household income, as a zero percent deferred second mortgage, for any Maryland Mortgage Program-eligible buyer in the county.
- MEDPAL — up to $50,000 for approved Montgomery County employees, forgiven at 30 years.
- City of Gaithersburg Downpayment Assistance — up to $40,000 inside Gaithersburg’s corporate limits.
- The statewide Maryland Mortgage Program, which the county programs are built on top of.
Unusually, the two county programs are delivered through the Maryland Mortgage Program rather than separately from it.
The $25,000 figure you may have seen is out of date
A great many third-party sites still describe the Montgomery Homeownership Program as offering up to $25,000. The Maryland Mortgage Program’s own Montgomery County page states a maximum second mortgage of $50,000, not exceeding 40% of household income.
If a lender or article quotes you $25,000, that is a sign the source has not been refreshed. Verify against current program materials.
Montgomery Homeownership Program (MHP)
MHP is the county’s main assistance product, offered as a specialty product within the Maryland Mortgage Program. That structure matters: you access it by taking an MMP first mortgage, not by applying to the county separately.
| Feature | Terms |
|---|---|
| Maximum assistance | $50,000, not exceeding 40% of household income |
| Structure | Zero percent interest second mortgage |
| Use | Down payment and closing costs |
| Repayment | Deferred until sale, refinance, transfer, or 30 years — whichever happens first |
| Income limit | Published Maryland Mortgage Program household income limits |
| First mortgage | Any Maryland Mortgage Program-eligible product |
| Homebuyer education | Required for all borrowers |
| Geographic area | Montgomery County |
The 40% cap is the real constraint
The $50,000 headline is a ceiling, not an entitlement. The assistance cannot exceed 40% of your household income.
Work the arithmetic backwards: to reach the full $50,000 you would need household income of $125,000, because 40% of $125,000 is $50,000. A household earning $80,000 is capped at $32,000. A household earning $60,000 is capped at $24,000.
This produces a counter-intuitive result — higher-earning eligible households can access more assistance, up to the MMP income limits. Knowing your own cap before you shop prevents a painful recalculation later.
MEDPAL — for Montgomery County employees
The Montgomery Employee Down Payment Assistance Loan is operated by the county’s Department of Housing and Community Affairs in partnership with the state, and delivered as an MMP specialty product.
| Feature | Terms |
|---|---|
| Maximum assistance | $50,000 second mortgage |
| Structure | Zero percent interest second mortgage, with a principal curtailment option |
| Repayment | Repayable if the property is sold, transferred or refinanced; forgiven at the end of 30 years |
| Who qualifies | Approved Montgomery County employees |
| Income limits | Must meet MMP limits and Montgomery County Workforce Housing Income Limits |
| First mortgage | Maryland Mortgage Program first mortgage products |
| Homebuyer education | Required for all borrowers |
The 30-year forgiveness is the standout feature. Stay in the home long enough and the loan is written off rather than repaid — which is a materially better deal than the standard county product, and a genuine reason for eligible county employees to check MEDPAL before anything else.
Note the double income test: MEDPAL applicants must satisfy both the Maryland Mortgage Program’s limits and the county’s separate Workforce Housing Income Limits.
City of Gaithersburg Downpayment Assistance
Gaithersburg runs its own program, funded by HUD Community Development Block Grant money and administered by the City’s Housing and Community Development office. It is a genuinely separate layer from the county programs.
| Household income | Maximum assistance |
|---|---|
| Up to 80% AMI | Up to $40,000 |
| 81% – 120% AMI | Up to $25,000 |
Gaithersburg requirements
- Property must be within Gaithersburg’s corporate limits — not merely carry a Gaithersburg mailing address
- First-time homebuyer — never owned a home, or not owned one for at least three years prior to settlement
- Must occupy the unit as your only residential property
- Credit score of 620 or higher
- Income at or below 120% of area median income
- Must work with a Maryland Mortgage Program approved lender
- HUD-approved first-time homebuyer counseling required
- Lawful presence verification through the SAVE system, as a federally funded program
Gaithersburg DPA loans are not forgivable
The City states this explicitly. The funds are a 0% deferred payment loan, secured by a promissory note and second deed of trust signed at settlement, and they are not forgiven over time.
That is a meaningful difference from MEDPAL, which is forgiven at 30 years, and it should factor into which assistance you pursue if you qualify for more than one.
Priority populations
When multiple applications are submitted, Gaithersburg prioritizes: K–12 Montgomery County public and private school employees (private schools must be licensed in Montgomery County by the State of Maryland), City of Gaithersburg full-time or permanent part-time employees, police officers, fire safety employees, and veterans.
Check the city limits before you fall in love with a house
The City warns that not every residence with a Gaithersburg address sits inside the corporate limits. A property one street outside the boundary is ineligible, regardless of what the mailing address says. Verify the specific address with the City before relying on this program.
Calculate your Montgomery County assistance cap
The $50,000 headline is limited to 40% of household income, so your actual figure may be very different. Worth knowing before you shop.
This is not a commitment to lend. All loans subject to credit approval.
The statewide Maryland Mortgage Program
Everything above sits on top of the Maryland Mortgage Program, the state’s homeownership loan program administered by the Department of Housing and Community Development. MMP pairs a below-market 30-year fixed first mortgage with its own down payment assistance options.
In Montgomery County the relationship is unusually tight: both MHP and MEDPAL are delivered as MMP specialty products, which means an approved MMP lender is the route to all of it. Gaithersburg’s program separately requires an MMP-approved lender too.
The practical consequence is simple — in Montgomery County, choosing a lender who is approved for the Maryland Mortgage Program is not optional if you want access to local assistance.
A related route: Moderately Priced Dwelling Units
Montgomery County also operates a Moderately Priced Dwelling Unit program, which is not down payment assistance but addresses the same affordability problem from the other direction: it produces income-restricted homes offered at below-market prices to qualifying buyers.
For some households the MPDU route delivers more value than any assistance program, because it reduces the purchase price rather than helping fund a market-rate one. It has its own application, eligibility and resale rules, and is worth investigating in parallel rather than instead.
Combining programs
Layering is plausible here, but must be confirmed
Because the county programs are built as Maryland Mortgage Program specialty products, MHP and MEDPAL are designed to work with an MMP first mortgage. That is a structural fit rather than an open-ended permission.
Whether a Gaithersburg DPA loan can be layered on top of county or state assistance on the same purchase depends on the requirements of each program and on what your first mortgage permits. Do not assume that two programs can be combined simply because you qualify for both — ask your lender and the City directly.
How local assistance works with your mortgage
| Loan type | How it interacts with local assistance |
|---|---|
| FHA | Available within the Maryland Mortgage Program, which is the delivery route for both county products. A common pairing with local assistance. |
| VA | Available within the Maryland Mortgage Program. Qualified veterans can finance without a down payment, so assistance tends toward closing costs. Veterans are also a Gaithersburg priority population. |
| USDA | USDA is limited to eligible rural areas. Montgomery County is substantially suburban, so eligibility must be checked address by address rather than assumed. |
| Conventional | Available within the Maryland Mortgage Program. Gaithersburg’s tiers contemplate conventional financing, and the specific product and mortgage insurance requirements govern what is permitted. |
To understand FHA financing before layering county assistance on top, our Maryland FHA loans guide covers it in detail.
How to apply
- Choose a Maryland Mortgage Program approved lender. In Montgomery County this is the gateway to essentially all local assistance.
- If you work for the county, ask about MEDPAL first. The 30-year forgiveness makes it materially better than the standard product for those who qualify.
- Calculate your 40% cap if you are pursuing MHP, so you know your real assistance figure rather than the headline.
- If you are buying in Gaithersburg, submit the City’s DPA pre-application, verify the address is inside city limits, and complete HUD-approved counseling.
- Complete homebuyer education. It is required across these programs.
- Confirm any layering with your lender before writing an offer that depends on it.
Common mistakes
- Using the stale $25,000 figure for the Montgomery Homeownership Program. The current maximum is $50,000.
- Ignoring the 40% of income cap and budgeting for the full $50,000.
- County employees not asking about MEDPAL. Forgiveness at 30 years is a significantly better outcome.
- Assuming a Gaithersburg address means Gaithersburg city limits. It often does not.
- Assuming Gaithersburg assistance is forgiven. The City states plainly that it is not.
- Choosing a lender who is not MMP-approved. That single choice can cut you off from every local program.
- Overlooking MPDUs. Reducing the purchase price can beat funding a market-rate one.
Frequently asked questions
How much down payment assistance can I get in Montgomery County?
The Montgomery Homeownership Program offers up to $50,000, capped at 40% of household income. MEDPAL offers up to $50,000 for approved county employees. Buyers inside Gaithersburg city limits may access up to $40,000 through the City’s own program.
Is it $25,000 or $50,000?
The Maryland Mortgage Program’s Montgomery County page states a maximum of $50,000, not exceeding 40% of household income. The $25,000 figure appearing on many third-party sites is out of date.
Do I have to be a first-time homebuyer?
The Montgomery Homeownership Program is described as available to any Maryland Mortgage Program-eligible buyer in the county, and a first-time requirement is not stated. Gaithersburg’s program does require first-time status — defined as never having owned, or not having owned for at least three years before settlement.
Do I have to repay the assistance?
It depends on the program. The Montgomery Homeownership Program is deferred until sale, refinance, transfer or 30 years. MEDPAL is repayable on sale, transfer or refinance but forgiven at 30 years. Gaithersburg’s loans are 0% deferred and expressly not forgivable.
Who qualifies for MEDPAL?
Approved Montgomery County employees, who must meet both the Maryland Mortgage Program income limits and the county’s Workforce Housing Income Limits.
What credit score do I need?
Gaithersburg requires 620 or higher. The Maryland Mortgage Program applies its own credit standards, and your first mortgage lender will have requirements of its own.
How do I know if a home is inside Gaithersburg city limits?
Check with the City directly. It warns that not all residences with a Gaithersburg address fall within the corporate limits, and only properties inside those limits qualify.
Does Rockville or Silver Spring have its own program?
We have verified Gaithersburg’s municipal program and the two county programs. We have not verified separate current down payment assistance programs with published terms for other Montgomery municipalities, so we are not describing any here. Check with the relevant municipality directly.
Can I combine county and city assistance?
Do not assume so. The county products are designed to sit on a Maryland Mortgage Program first mortgage, but whether Gaithersburg assistance can be layered on the same purchase depends on both programs’ rules and your first mortgage. Confirm before writing an offer.
What is an MPDU?
A Moderately Priced Dwelling Unit — an income-restricted home offered at a below-market price under the county’s affordable housing rules. It is not down payment assistance, but for some households it delivers more value because it lowers the purchase price itself.
Sources
- Maryland Mortgage Program — Montgomery County specialty products: the Montgomery Homeownership Program maximum of $50,000 not exceeding 40% of household income, its zero percent second mortgage structure, deferral until sale, refinance, transfer or 30 years, MMP household income limits, availability to MMP-eligible buyers, and the homebuyer education requirement; and MEDPAL’s $50,000 second mortgage, zero percent rate, principal curtailment option, repayment on sale, transfer or refinance with forgiveness at 30 years, eligibility limited to approved Montgomery County employees, and the requirement to meet both MMP and Workforce Housing Income Limits.
- City of Gaithersburg — Downpayment Assistance Program: the $40,000 and $25,000 tiers by income band, the 0% deferred loan structure, the explicit statement that DPA loans are not forgivable, the promissory note and second deed of trust, the corporate limits restriction and the warning that not all Gaithersburg addresses qualify, the first-time homebuyer definition including the three-year rule and only-residential-property occupancy condition, the 620 minimum credit score, the 120% area median income ceiling, the requirement to use a Maryland Mortgage Program approved lender, the HUD-approved counseling requirement, the CDBG funding source and SAVE lawful presence verification, the priority populations, and the application steps.
- Montgomery County Department of Housing and Community Affairs — MEDPAL administration in partnership with the Maryland Department of Housing and Community Development.
- Montgomery County — Moderately Priced Dwelling Unit homeownership program.
- Maryland Department of Housing and Community Development — Maryland Mortgage Program structure, assistance options and approved lender requirement.
Montgomery County product terms verified September 2, 2026; the City of Gaithersburg program page could not be re-read on that date, and its figures were last confirmed on August 23, 2026. Program terms, income limits and funding availability change, and awards are subject to available funding. Confirm current figures with the relevant program administrator and an approved lender before relying on anything here.
This page explains how down payment assistance in Montgomery County generally works. It does not determine individual eligibility, is not a commitment to lend, and is not a Loan Estimate. Program terms are set by Montgomery County, the City of Gaithersburg and the Maryland Department of Housing and Community Development, and participating lenders may apply additional requirements. Maryland Homebuyer Hub is not affiliated with, endorsed by, or acting on behalf of Montgomery County, the City of Gaithersburg, or any government agency.