Scaling a Maryland Rental Portfolio: Past 4 Doors, Past 10, and Beyond
Program and regulatory figures verified July 24, 2026. Details change; confirm your scenario with us.
Every Maryland portfolio hits the same walls: the conventional property-count cap, the reserves that climb with it, and, for out-of-state owners, a sale-day withholding line most first-timers never saw coming. Each has a clean answer.
How many financed properties can I have?
Ten, conventionally. Fannie Mae's B2-2-03 allows up to 10 financed properties per borrower when the new loan is on a second home or investment property. The "you can only have four mortgages" claim you will still hear at meetups describes policy that ended in 2009. What does climb as you grow is the reserve requirement, measured against the aggregate unpaid balance of your other financed properties: 2% with 1–4 financed properties, 4% with 5–6, and 6% with 7–10. Eligibility standards also tighten as the count rises.
Past ten, or well before it once returns and reserve math get heavy, DSCR takes over. No agency property-count cap exists on DSCR programs; each property qualifies on its own rent-to-payment ratio. Our usual sequencing for Maryland investors: conventional while it is cheapest and your tax returns cooperate, DSCR from there. The comparison lives in the DSCR guide, and the entity structure most portfolios adopt is in the LLC guide.
The 2–4 unit lane and conforming limits
Duplexes through fourplexes are still residential financing (one loan, one address, multiple rent checks), and Baltimore's rowhouse blocks and the older DC-suburb streets have real inventory of them. Plan on 25% down as the common floor on investment 2–4 unit, whether conventional or DSCR. The 2026 one-unit conforming limit is $832,750 in the baseline counties (Baltimore City, Baltimore County, Anne Arundel, Howard) and $1,249,125 in the high-cost DC-metro counties (Montgomery, Prince George's, Charles, Frederick), with Calvert at $1,209,750. On the DSCR side, every unit's rent counts toward the ratio, which is why a fourplex often clears 1.0 where a same-price single-family does not.
I live out of state: what happens when I sell my Maryland rental?
Maryland withholds tax at closing, and this is the out-of-state investor's biggest surprise. Under the state's nonresident withholding, Maryland withholds 8.75% of the sale price for nonresident individuals and 8.25% for nonresident entities, for sales after June 30, 2025. That rate rose in 2025 from the widely-cited 8% figure most online sources still show, so budget the current number. The withholding is not your final tax; a seller can apply for an early refund if less is actually owed, except on sales of $1.5 million or more, which are no longer refund-eligible before the return. Plan your exit and your entity structure around this with your CPA well before the closing table. A foreign-national owner selling later faces the same nonresident exposure.
The extra capital-gains surtax
Maryland's 2025 tax law added a 2% surtax on net capital gains for individual and fiduciary filers whose federal adjusted gross income exceeds $350,000, excluding gains on a primary residence sold for under $1.5 million. For a high-volume or high-net-worth investor selling appreciated Maryland rentals, that surtax stacks on top of ordinary capital-gains tax and the nonresident withholding mechanics above. This is a place to involve your CPA early, because timing and entity choices move the number. We handle the financing on the replacement side if you are reinvesting; see 1031 exchange.
Foreign-national buyers of Maryland rentals
Maryland rentals draw international capital, and financing exists for it: DSCR-style foreign-national programs require no U.S. credit score or Social Security number on many structures. Expect 25–30% down, reserves on the deeper end (6–12 months), and foreign bank assets documented rather than moved. An ITIN is sometimes needed for tax administration, not for qualifying; your CPA handles that side. The property still qualifies on its rent-to-payment ratio, and title can vest in a U.S. entity: the usual structure pairs a Maryland LLC with a foreign member. Remember the sale-day nonresident withholding above applies to a foreign owner too.
No pressure, no obligation, and no salesy follow-up: a 20-minute call with our team, real numbers, and a straight answer on whether the deal pencils.
Frequently asked questions
How many financed properties can I have with conventional loans?
Up to 10 per borrower under Fannie Mae B2-2-03 for second-home and investment purchases. Reserve requirements climb with the count: 2% of the aggregate balance of your other financed properties at 1–4, 4% at 5–6, and 6% at 7–10. The four-property limit people still cite ended in 2009.
What happens when I hit the 10-property cap?
DSCR financing takes over: no agency property-count cap exists, and each property qualifies on its own rent against its own payment. Many investors switch earlier than 10, when conventional reserve math and tax-return documentation get heavier than DSCR's simpler file. The crossover point is a numbers question we can run for your portfolio.
I live out of state: what happens when I sell my Maryland rental?
Maryland withholds at closing: 8.75% of the sale price for nonresident individuals and 8.25% for nonresident entities, for sales after June 30, 2025. That rate rose in 2025 from the stale 8% figure most sources still show. A refund can be requested if less is owed, except on sales of $1.5 million or more. Plan with your CPA before closing.
Is there an extra Maryland tax on large capital gains from selling a rental?
Yes. Maryland's 2025 law added a 2% surtax on net capital gains for individual and fiduciary filers whose federal adjusted gross income exceeds $350,000, excluding a primary residence sold for under $1.5 million. It stacks on ordinary capital-gains tax and the nonresident withholding. Involve your CPA early, because timing and entity choices move the number.
Can a foreign national buy Maryland investment property with financing?
Yes. Foreign-national DSCR programs on many structures require no U.S. credit score or Social Security number; plan on 25–30% down and 6–12 months of reserves, with foreign assets documented. An ITIN may be needed for taxes rather than qualification. Title typically vests in a Maryland LLC, and the sale-day nonresident withholding applies to a foreign owner too.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal or tax advice. City and county STR rules, tax figures, rent-stabilization caps, and filing fees change; verify current requirements with the jurisdiction, your CPA, or a Maryland real estate attorney before you buy. Loans are subject to buyer and property qualification.