Why Maryland Is Different
If you're already registered in NJ, PA, or CT, you're used to a simple registration model: fill out a form, pay a fee, provide insurance, done. Maryland's MHIC (Maryland Home Improvement Commission) contractor license is genuinely different — it's a credential that requires testing, documented experience, and financial vetting. That higher barrier to entry is also why the MD market is less saturated with competition than NJ or PA.
Key differences that catch NJ/PA contractors off guard:
- No dollar threshold. In NJ, you only need to register if your work exceeds certain contract thresholds. In Maryland, ANY residential home improvement job — regardless of price — requires a valid MHIC license.
- Written exam required. No other state in the NE corridor requires contractors to pass an exam before they can legally take residential jobs.
- Experience documented upfront. Maryland reviews your work history — two years of documented experience is required before you can even apply.
- Financial solvency review. The MHIC reviews your personal financial statements, not just your business. If you don't meet solvency guidelines, you'll need a surety bond as an alternative.
⚠ No Threshold — Every MD Residential Job Requires a License
Unlike NJ ($500 threshold) or CT ($200 per job / $1,000 annual), Maryland has no minimum contract size that exempts you from MHIC licensure. A $300 bathroom caulking job on a Maryland homeowner's residence legally requires a valid MHIC license. Operating without one is a misdemeanor under Maryland HIC law.
MHIC License Requirements at a Glance
| Requirement | Details |
|---|---|
| License fee | $300 for a 2-year license |
| Exam | PSI Exams — must pass before applying (70% minimum score) |
| Experience | 2 years in home improvement work, construction, or related education |
| GL insurance | Minimum $50,000 per occurrence (eff. June 1, 2024) |
| Financial solvency | Personal financial review, OR $30,000–$100,000 surety bond in lieu |
| License term | 2 years from date of issuance |
| Renewal fee | $300 (every 2 years) |
| Administered by | Maryland Home Improvement Commission (MHIC), under MD Dept. of Labor |
Step-by-Step: How to Get Your MHIC License
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Confirm your work qualifies — and that you need a license
The MHIC license covers home improvement work on residential properties with one to three dwelling units. This includes remodeling, roofing, siding, painting, decks, additions, kitchens, bathrooms, landscaping, and general renovation. New home construction is separate (registered with the Home Builder Registration Unit). Commercial-only contractors don't need an MHIC license. If any part of your work touches existing Maryland residential property, assume you need the license.
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Document two years of experience
Before scheduling the exam, gather documentation of at least 2 years of experience in home improvement work or construction. Acceptable formats include prior employment records, W-2s, client references, contractor agreements you've signed, or evidence of prior registration in another state. Related formal education (construction management, trade school, vocational training) can substitute for part of the experience requirement. The MHIC reviews your background on the application — have documentation ready.
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Schedule and pass the PSI exam
Contact PSI Exams at 1-800-367-1565 or visit candidate.psiexams.com to schedule the MHIC contractor exam. The exam covers Maryland home improvement law and regulations — not trade skills. You need a 70% to pass. Study materials are available through the MHIC and PSI. You must pass the exam before submitting your MHIC application — your exam result is part of the application package.
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Secure your GL insurance
Get a GL policy with at least $50,000 per occurrence coverage (required since June 1, 2024 under revised MHIC rules). In practice, most Maryland GCs and homeowners require $1M per occurrence / $2M aggregate in their contracts — the state minimum is the legal floor. Have your policy number and insurer name ready for the application. If you're a NJ or PA contractor, confirm your existing policy covers Maryland jobsites and that the limits meet MD's $50,000 minimum.
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Prepare for the financial solvency review
The MHIC evaluates your personal financial solvency — total personal assets, liabilities, credit report, and net worth. Business assets alone do not satisfy this requirement. If you cannot meet the solvency guidelines, you have two alternatives: (1) obtain a $30,000 surety bond and provide financial statements, or (2) obtain a $100,000 surety bond in lieu of providing any financial statements at all. A $30,000 bond typically costs $300–$600/year; a $100,000 bond typically costs $500–$1,500/year depending on your credit.
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Set up your business entity in Maryland (if applicable)
If you operate as an LLC or corporation, the entity must be registered and in good standing with the Maryland Department of Assessments and Taxation (SDAT) before applying. Sole proprietors can skip this step. If you're an NJ/PA LLC expanding to Maryland, you'll need to qualify as a foreign entity doing business in Maryland — this typically requires a Certificate of Authority from SDAT. Northwest Registered Agent can handle MD foreign entity registration and provide a Maryland registered agent address.
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Submit the MHIC application and $300 fee
Download the application from labor.maryland.gov/license/mhic. Submit your completed application with: exam passing score documentation, experience documentation, GL insurance certificate, financial statements (or surety bond), and the $300 application fee. Applications can be mailed or submitted in person. Processing typically takes 4–8 weeks for clean applications.
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Display your license number and renew every two years
Once issued, your MHIC license number must appear on every contract, proposal, advertisement, and invoice. The license is valid for 2 years from issuance. Track your expiration date and submit renewal paperwork and the $300 renewal fee before it lapses. A lapsed license means you cannot legally take Maryland residential jobs until renewal is processed.
Expanding to Maryland as an LLC?
NJ/PA LLCs need to qualify as a foreign entity in Maryland before applying for the MHIC license. Northwest Registered Agent handles MD foreign entity registration and provides a Maryland registered agent address — keeping your personal address off public state records.
Total Cost to Get Licensed in Maryland
| Cost Item | Amount | Notes |
|---|---|---|
| PSI exam fee | ~$75–$95 | Paid to PSI at scheduling; varies by test center |
| MHIC application fee | $300 | 2-year license; non-refundable |
| Surety bond (if needed) | $300–$1,500/yr | $30K bond or $100K bond if solvency not met |
| GL insurance (annual) | $600–$2,400/yr | $50K state min; $1M/2M typical market requirement |
| MD entity registration (if LLC) | $100–$300 | SDAT foreign entity qualification |
| Total first-year (no bond) | ~$1,000–$2,900 | Exam + license + GL + entity (if applicable) |
| Total first-year (with bond) | ~$1,300–$4,400 | Adds $30K–$100K surety bond premium |
MD vs. NJ/PA/CT: How MHIC Compares
| Item | NJ (HICB) | PA | CT (DCP) | MD (MHIC) |
|---|---|---|---|---|
| Application fee | $110 | $50 | $220 | $300 |
| License term | 1 year | 2 years | 1 year | 2 years |
| Exam required | No | No | No | Yes (PSI) |
| Experience required | No | No | No | 2 years |
| GL minimum | $500K HIC | None (HICPA) | $20K | $50K |
| Dollar threshold | Any job | >$500 | >$200 / $1K/yr | None — every job |
| Financial review | No | No | No | Yes (personal) |
| Surety bond option | Required separately | Not required | Not required | In lieu of solvency |
📌 The Higher Bar Is Also Your Competitive Moat
Because Maryland's MHIC license requires an exam and experience review, fewer contractors bother. That means legitimate, licensed contractors face less competition — especially from fly-by-night operators who can't pass the test or document their background. If you can get licensed, the Maryland market is worth it.
The PSI Exam: What to Expect
The MHIC contractor exam tests knowledge of Maryland home improvement law — not your trade skills. The exam is typically 100 questions, covers the Maryland Home Improvement Law (BUS §8-601 et seq.), contract requirements, license display rules, consumer protection provisions, and commission procedures. You need a 70% to pass.
- Schedule: Contact PSI at 1-800-367-1565 or book online at candidate.psiexams.com
- Study materials: The MHIC provides a candidate bulletin with exam content outlines; PSI may also offer prep materials
- Locations: PSI testing centers in Maryland (Baltimore area, Frederick, Salisbury) and potentially remote proctoring
- Re-takes: If you fail, you can reschedule and retake — you pay the exam fee each time
- Score validity: Confirm with the MHIC how long your passing score remains valid before you must submit the application
Need GL Insurance to Register in Maryland?
CanDo Insurance quotes MD contractor coverage across 20+ carriers. Most policies issued same day. We work with NJ and PA contractors expanding into Maryland — and we know how to structure coverage that meets both the $50K state minimum and typical contract requirements.
Frequently Asked Questions
How much does the Maryland MHIC contractor license cost?
The MHIC license fee is $300 for a two-year license. Add approximately $75–$95 for the PSI exam fee. If you need a surety bond instead of financial solvency documentation, expect $300–$600/year for a $30,000 bond or $500–$1,500/year for a $100,000 bond. GL insurance (required minimum $50K) adds $600–$2,400/year depending on your operation.
Is there an exam required for the Maryland MHIC license?
Yes. Maryland requires passing the MHIC contractor exam through PSI Exams (1-800-367-1565) before you can apply for the license. You need a score of at least 70%. The exam covers Maryland home improvement law and regulations, not trade skills. You must pass before submitting your application.
Who needs a Maryland MHIC contractor license?
Anyone who performs, offers to perform, or contracts to perform home improvement work on Maryland residential property (1–3 dwelling units) must hold a valid MHIC license — regardless of contract dollar amount. There is no minimum threshold. A $300 job requires the same license as a $300,000 renovation.
What experience is required for the MHIC license?
At least 2 years of experience in home improvement work, construction, or related education. Related formal education (construction management degrees, vocational training) can substitute for part of the requirement. Have documentation ready — the MHIC reviews your background on the application.
What GL insurance is required for the Maryland MHIC license?
Minimum $50,000 per occurrence (effective June 1, 2024). In practice, most Maryland GCs and homeowners require $1M per occurrence / $2M aggregate. You must provide your insurer's name and policy number on the application and maintain coverage throughout the license term.
How long does the Maryland MHIC license last?
Two years from the date of issuance. Renewal requires the same $300 fee. You must maintain active GL insurance throughout. Set a calendar reminder well before expiration — a lapsed license means you cannot legally take residential jobs until it's renewed and processed.
Sources: Maryland MHIC — Licensing • PSI Exams • Maryland SDAT. This article is for informational purposes only and does not constitute legal or insurance advice.