A single woman moved to Baltimore for $15K in housing incentives, but experts warn $16K in hidden home costs could erase the benefit

She used the Maryland SmartBuy Program, which pays off student loans for local homebuyers, plus a $10,000 first-time homebuyer grant and a $5,000 Trolley Tour Lottery grant through Live Baltimore.

For $200,000, Turner bought a three-bedroom rowhouse built in 1920. The incentives helped her enter the market with minimal out-of-pocket costs, and she viewed homeownership as financial protection — especially valuable after a 2024 layoff forced her to seek a loan modification.

The $16,000 reality check

New data from Zillow reveals a hidden trap: the ongoing costs of ownership are now so high that they can quickly erase upfront financial benefits.

According to analysis from Zillow and Thumbtack (2), hidden homeownership costs of maintenance, property taxes and insurance now average $15,979 annually nationwide. That's almost $1,332 monthly on top of mortgage payments.

In other words, Turner's $15,000 in incentives covers less than one year's worth of hidden costs. After that, she’s on the hook for these expenses indefinitely.

Baltimore's property tax burden

Baltimore compounds the challenge with some of the nation's highest property taxes. According to SmartAsset, Baltimore City's average effective tax rate is 1.51%, which is the highest in Maryland. (3) The city’s official property tax rate is $2,248 per $100 of assessed value.

For Turner's $200,000 home, this translates to approximately $4,496 annually in property taxes, though homestead exemptions and credits may reduce this.

The age of the home could add another layer. Turner's 1920 rowhouse might require maintenance that newer construction wouldn't need, like plumbing updates, electrical work, roof replacement and foundation repairs.

The false affordability trap

Housing incentives help buyers overcome the down payment barrier. But the combination can create what some financial advisors see as a trap: people technically qualify for mortgages but struggle with ongoing costs that exceed their monthly budget capacity.

For many, the danger isn't the monthly mortgage payment. It's the cumulative burden of annual property taxes, insurance premiums that have jumped 48% since 2020 and now typically exceed $2,000 a year (2) and ongoing maintenance costs.

Turner might be one of many Americans relying on short-term incentives without fully accounting for long-term expenses.

While she managed to get her mortgage payment dropped from $1,700 to $1,432 after losing her job, that doesn't reduce property taxes, insurance premiums or the cost of fixing a leaky roof.

What buyers need to calculate

If you're chasing incentive programs, it's prudent to factor these costs beyond the mortgage:

All-in ownership costs: Budget to spend at least $1,300 monthly ($16,000 annually) on top of your mortgage payment. In high-cost or older housing markets, budget more.

Local property taxes: Property taxes can add up, especially in places like Baltimore.

Insurance premiums: These are among the fastest-growing homeownership expenses. Check costs before committing.

Maintenance: According to Fannie Mae, homeowners should budget 1-4% of their home's value annually for repairs, with older homes (30+ years) requiring closer to 4% (4).

Emergency fund: Beyond three to six months of expenses, homeowners should maintain a separate home maintenance fund. CrossCountry Mortgage suggests adding at least $5,000 to $10,000 to baseline emergency savings for this purpose (5).