Tax Liens on Homestead Properties (Maryland)

[DL Coker]

Hi BP community
So I've been doing a lot of research about tax lien investing in MD. I participated in the Baltimore City tax lien sale not too long ago. After filtering out the properties that met my criteria and that I would bid on, I noticed that every single one had an asterisk next to it indicating that it had a homestead exemption - this gave me pause as a new investor to the market and I wasn't quite sure what this meant. I have since done research on homestead exemptions but I am still not fully sure how it could impact my tax lien investing (if at all).

What are the benefits / pitfalls of bidding on a property with a homestead exemption? My thinking was that, this simply indicates it's an owner occupied property - consequently, the likelihood of redemption is pretty high. However, if a property is under a homestead, does that ultimately make it more difficult to eventually foreclose (if things go that far)? Does it adversely affect the redemption period (i.e. my capital is tied up longer)? Or is it simply there to indicate that, if one were to acquire the property the subsequent taxes I would have to pay would be higher than what the current occupier pays? I'm not really clear on why or how relevant the homestead exemption is. Any guidance would be much appreciated.

Given that he is the resident expert on tax liens in Maryland, I'm sure I'll be directed to @Ned Carey. If he has any insight that would be great.
That said, if others have advice or similar experiences, please also feel free to share your thoughts!

[Ned Carey]

@DL Coker yes the "Homestead Exemption" simply means the property is owner occupied. The owner gets a small tax benefit for this. I believe it limits how much the taxes can be raised at a time. 

Generally it means that the property is more likely to redeem. Theoretically a homeowner is more likely to redeem than an absentee owner. However that is not necessarily so. A homeowner could have passed away and the heirs do nothing with the property for example.

Specifically regarding tax sales in Maryland, You can not start tax foreclosure until 9 months after the sale instead of 6 months. (this may only apply to Baltimore city properties but I think it is statewide). In Baltimore city the interest earned on the lien is 12% instead of 18%.