HECMAcademy · Maryland · 10 min read · Updated July 2026
Maryland Reverse Mortgage in 2026: The Tenancy-by-the-Entirety Trap, the MD Reverse Mortgage Loans Act, and County-by-County Payouts
Maryland is one of a handful of states with a dedicated reverse mortgage statute (the Maryland Reverse Mortgage Loans Act, Md. Code, Commercial Law §§ 12-1201 through 12-1208), and it is one of even fewer where an old common-law doctrine — tenancy by the entirety — can quietly void a HECM signed by only one spouse. On top of that, Maryland's home values swing from $192,000 in Baltimore City to $1.13 million in Montgomery County, meaning the FHA HECM cap and the state's supplemental senior tax credits interact very differently depending on where you live.
Sources: Md. Code Comm. Law §§ 12-1201–1208; Newsom v. Brock & Scott, PLLC, 253 Md. App. 181 (2021); Maryland SDAT Homeowners' Property Tax Credit; Zillow ZHVI (2025).
Maryland senior homeowner market
Maryland ranks among the wealthier East Coast senior housing markets, but the variance is extreme: a Baltimore City rowhouse and a Bethesda single-family both count as "Maryland real estate" for FHA purposes, yet fall on opposite ends of the HECM math. Montgomery, Howard, and Anne Arundel counties skew high; Baltimore City and much of the Eastern Shore skew low.
Principal-limit examples by Maryland market (mid-2026)
The following illustrates estimated principal limits for a 70-year-old borrower at expected rates typical of mid-2026, using Zillow Home Value Index (ZHVI) values for representative Maryland brackets.
| Market bracket | Home Value | Est. Principal Limit at Age 70 (~55%) | After $75K existing mortgage payoff |
|---|---|---|---|
| Lower — e.g. Baltimore City ($192K), Eastern Shore | $375,000 | ~$206,000 | ~$131,000 |
| Mid — e.g. Prince George's County ($421K) | $550,000 | ~$302,000 | ~$227,000 |
| Upper — e.g. Howard / inner Anne Arundel | $775,000 | ~$426,000 | ~$351,000 |
Illustrative estimates using a ~55% principal-limit factor at age 70 and expected rates typical of mid-2026. Actual figures depend on your specific age, appraised value, expected rate at closing, and HUD's current tables. The 2026 FHA HECM lending limit is $1,249,125. Metro medians per Zillow ZHVI (2025).
Where the $1,249,125 FHA cap actually bites
Most Maryland homes fall well under the 2026 FHA HECM lending limit of $1,249,125 — even Howard County averages come in below the cap. The exception is Montgomery County, where the county-wide Zillow median sits near $1.13 million and many single-family homes in Bethesda, Chevy Chase, and Potomac exceed $1.5–2 million. On those properties, the principal-limit calculation stops at $1,249,125 no matter how high the appraisal comes in. A proprietary (jumbo) reverse mortgage — which is not FHA-insured and has no HUD cap — is usually the correct product to ask a lender about in that scenario.
The Maryland Reverse Mortgage Loans Act (§§ 12-1201 to 12-1208)
Maryland enacted its Reverse Mortgage Loans Act in 2010. It sits inside the Commercial Law article and applies on top of federal HUD HECM rules. Two provisions are worth knowing before you sit down with a lender:
- § 12-1207 — written checklist requirement. Before a Maryland reverse mortgage loan application is accepted, the lender must deliver a written checklist of items the borrower should discuss with a HUD-approved counselor, and the counselor must confirm that discussion happened. This is a Maryland layer on top of the federal counseling requirement — it does not replace it.
- § 12-1205 — anti-tie-in. A Maryland reverse mortgage lender may not require the borrower to purchase an annuity, investment, life insurance product, or other financial product as a condition of the loan.
The tenancy-by-the-entirety trap most Maryland borrowers don't know about
In Maryland, married couples typically hold their primary residence as tenants by the entirety. Under this doctrine, both spouses together own an undivided whole — neither can encumber the property alone. In Newsom v. Brock & Scott, PLLC, 253 Md. App. 181 (2021), Maryland's Appellate Court held that a mortgage signed by only one spouse on tenancy-by-the-entirety property was void as to the non-signing spouse, defeating the lender's foreclosure.
The practical impact for a HECM: even where HUD's Non-Borrowing Spouse rules would let a younger spouse stay in the home after the borrower's death, the mortgage instrument itself must be properly executed under Maryland law. In practice, Maryland closing agents require both spouses to sign the mortgage on tenancy-by-the-entirety property — even if only one is a borrower on the note. Confirm this with your title agent before closing; a defective signature can jeopardize the lien.
Homeowners' Property Tax Credit and Montgomery County add-ons
Maryland administers the Homeowners' Property Tax Credit through the State Department of Assessments and Taxation (SDAT). Unlike many state senior programs, it has no age minimum, but does impose a household income cap of $60,000 and a net-worth cap of $200,000 (excluding the value of the home and any qualified retirement account). See SDAT's program page for the current application and worksheet.
Because HECM proceeds are loan advances rather than income, they generally do not push a borrower over the SDAT income cap on their own — but they can, over time, add to the net-worth side if drawn funds accumulate in bank accounts. Montgomery County layers a supplemental credit on top of the state program using the same base calculation; other counties have their own local supplements as well.
Maryland HECM FAQ
Does Maryland's tenancy-by-the-entirety doctrine affect a reverse mortgage if only one spouse signs?
Yes, and this is a Maryland-specific risk. In Newsom v. Brock & Scott, PLLC, 253 Md. App. 181 (2021), a Maryland appellate court held that a mortgage on tenancy-by-the-entirety property signed by only one spouse was void as to the non-signing spouse. On Maryland primary residences held by married couples, closing agents require both spouses to sign the HECM mortgage instrument — even if only one is on the note as borrower — to make sure the lien is valid.
What is Maryland's Reverse Mortgage Loans Act and how does it protect borrowers?
The Maryland Reverse Mortgage Loans Act (Md. Code Comm. Law §§ 12-1201 to 12-1208, enacted 2010) layers state protections on top of federal HUD HECM rules. Key features: a written pre-application counseling checklist (§ 12-1207) that the HUD-approved counselor confirms was discussed, and an anti-tie-in provision (§ 12-1205) prohibiting lenders from conditioning a reverse mortgage on the purchase of an annuity, insurance, or other financial product.
How do Montgomery County's supplemental senior tax credits interact with a HECM?
Montgomery County layers a supplemental homeowners' tax credit on top of Maryland's state Homeowners' Property Tax Credit, using the same base calculation. Because HECM proceeds are loan advances, they generally do not count as income for these programs — but funds you draw and leave sitting in a bank account can, over years, push you toward the $200,000 net-worth cap on the state credit. Draw only what you actually need in each year you want to remain eligible.
My Maryland home is worth over $1.25 million. Does the FHA cap limit me?
Yes. The 2026 FHA HECM lending limit is $1,249,125. Value above that ceiling does not increase your principal limit under a standard HECM. This is especially relevant in Bethesda, Chevy Chase, Potomac, and other Montgomery County submarkets where single-family homes routinely exceed $1.5–2 million. For those properties, ask lenders about proprietary reverse mortgages, which are not FHA-insured and have no HUD cap.
Do I need to qualify for Maryland's Homeowners' Property Tax Credit to get a HECM?
No — they are entirely separate. You can hold a HECM regardless of the SDAT credit. But the two often come up together because seniors on fixed incomes frequently qualify for both. Note the state credit's $60,000 household income cap and $200,000 net-worth cap (excluding the home) when planning HECM draws.
Do both spouses have to attend HUD counseling in Maryland?
HUD counseling is required for all borrowers, and in practice Maryland counselors strongly encourage the non-borrowing spouse to attend as well — especially given the tenancy-by-the-entirety issue that makes both signatures necessary at closing. The state's § 12-1207 checklist is designed to be worked through with everyone who will sign at the table.
How to apply
Start pre-qualification through HECMAcademy — a free, no-obligation form that matches Maryland homeowners with FHA-approved lenders licensed in the state. Start your pre-qualification →
Before a Maryland lender can accept your application, you must complete counseling with a HUD-approved HECM counselor. Find a HUD-approved counselor in Maryland →