Maryland General Contractor License Requirements: The MHIC Home Improvement License, the $500 Threshold & the Guaranty Fund (2026)

If you are planning to run a general contractor business in Maryland, the key thing to understand is that Maryland doesn’t have a single “general contractor” license – it splits contractor regulation by the type of work. The credential most contractors need is the Maryland Home Improvement Commission (MHIC) license, which covers residential remodeling, repairs, and improvements to existing homes. There’s no statewide license for commercial general contracting (that’s handled locally), and new-home building runs through a separate registration. So the right question in Maryland isn’t “how do I get a GC license” but “which credential does my work require” – and for most residential contractors, that’s the MHIC license. This guide walks through all of it under current 2026 rules, including the significant 2024 insurance change.

Some states issue one broad contractor license; Maryland uses a work-type system anchored by the MHIC. Nationally, the construction field is large and growing. According to the U.S. Bureau of Labor Statistics (Occupational Employment and Wage Statistics, May 2025), there are roughly 380,360 construction managers, 812,210 first-line supervisors of construction trades, 146,720 construction and building inspectors, and about 1,096,780 construction laborers across the country. Employment of construction managers is projected to grow 9% from 2024 to 2034 – much faster than the average for all occupations.

In Maryland specifically, the BLS reports about 5,770 construction managers (median pay $128,330), 15,400 first-line construction supervisors ($78,760), 2,780 construction and building inspectors ($76,640), and roughly 20,920 construction laborers ($46,960) – a strong, high-wage market shaped by the Washington-Baltimore metro. This guide draws its requirements from the official source: the Maryland Home Improvement Commission.

Quick Answer: Do You Need a General Contractor License in Maryland?

It depends on the work – Maryland has no single statewide general contractor license, but most residential contractors need the Maryland Home Improvement Commission (MHIC) license. The MHIC license covers residential home improvement: remodeling, repairs, replacements, alterations, and additions to existing homes.

The MHIC threshold is one of the lowest in the country: a license is required for home improvement work valued at $500 or more per contract. To get it, you need two years of experience (or equivalent education), a passing score (70%) on the PSI-administered MHIC exam, proof of financial solvency (or a surety bond), a payment into the Home Improvement Guaranty Fund, and – since June 1, 2024 – at least $500,000 in general liability insurance. There is no statewide commercial general contractor license in Maryland – commercial work is licensed at the county and municipal level – and new-home building uses a separate Home Builder Registration. Workers’ compensation is required if you have employees, and all projects are subject to local permits.

Who Regulates Contractors in Maryland?

Maryland regulates contractors by work type, through a mix of state and local authorities:

• Maryland Home Improvement Commission (MHIC): Licenses residential home improvement contractors statewide, within the Maryland Department of Labor’s Division of Occupational and Professional Licensing (Business Regulation Article §8-101 et seq.)
• Maryland Home Builder Registration Unit: Handles registration for new-home builders (with its own Home Builder Guaranty Fund), under the Office of the Attorney General
• County and municipal governments: License commercial general contractors and handle all local permits and inspections
• Maryland Department of Assessments and Taxation (SDAT): Business-entity and trade-name registration
• PSI Services: Administers the MHIC licensing exam

Key contacts:

• MHIC: labor.maryland.gov/license/mhic; the primary residential contractor license
• SDAT: dat.maryland.gov; business registration
• PSI Exams: the state’s MHIC testing provider

Because Maryland licenses by work type, the practical first step is identifying which credential your work requires – for most residential contractors, that’s the MHIC license.

The Maryland Split: Home Improvement vs. Commercial

Maryland’s system makes more sense once you understand the split. Rather than one general contractor license, the state divides contractor regulation into distinct paths.

Home Improvement (MHIC)

The MHIC license covers home improvement: the repair, replacement, remodeling, alteration, conversion, modernization, improvement, or addition to a residential property (existing homes with one to three dwelling units, per the Commission’s jurisdiction). This is the license most Maryland contractors need, and its threshold is remarkably low – work valued at $500 or more per contract triggers the requirement. Anyone dealing directly with homeowners on home improvement work must hold the MHIC license.

New Home Building

Building new homes for sale is regulated separately, through the Maryland Home Builder Registration administered under the Office of the Attorney General, with its own Home Builder Guaranty Fund. A new-home builder registers rather than holding an MHIC license, though a contractor doing both new construction and remodeling may need both credentials. Confirm your exact situation with the relevant unit.

Commercial Contracting

Maryland has no statewide competency-based commercial general contractor license. But there’s an administrative credential many commercial builders miss: under Maryland Business Regulation Article (Subtitle 6, Construction, §17-601 to §17-603), a business performing commercial or new-home construction must obtain a Construction License from the Clerk of the Circuit Court in the county where the work is performed. It’s a business-tax-style license (modest fees that scale by contract value or capital, commonly in the tens of dollars), not a competency exam. Importantly, a contractor who holds an MHIC home improvement license does not also need the Circuit Court construction license for home improvement work – but a contractor doing commercial work does need it. Beyond that state construction license, commercial construction is governed by county and municipal permitting, code review, and any local licensing – so a commercial GC’s competency requirements depend on where the project is located. This layered structure surprises contractors coming from states with a single unified commercial GC license.

MHIC License Requirements

Here’s what the MHIC requires for the residential home improvement license – the credential most Maryland contractors pursue.

Experience & Exam

The MHIC license is issued to a business, with a designated qualifying individual (the “licensee”) who meets the personal requirements:

• Experience: At least two years of experience in home improvement work, construction, or related education (verifiable, typically within the past five years)
• Exam: Pass the MHIC examination, administered by PSI, with a 70% passing score – a roughly 50-question exam covering home improvement law, business, and project management. You must pass before submitting your license application, and the application must include the official PSI passing score report (dated within two years)
• NASCLA not accepted: Maryland uses its own exam and does not accept the NASCLA Accredited Examination
• Background check: Applicants disclose criminal convictions; certain convictions require documentation

Financial Solvency, Bond & Guaranty Fund

Maryland uses a distinctive consumer-protection structure combining financial solvency, a bond option, and the Guaranty Fund:

• Financial solvency: The Commission requires proof of at least $30,000 in net worth or working capital, documented on an MHIC financial statement (for a sole proprietorship, personal and business assets are evaluated together; an LLC or corporation submits the entity’s balance sheet and/or a personal statement). If you fall short of $30,000, you must file a $30,000 surety bond on the Commission’s form (some sources also report a larger bond option in lieu of submitting financial statements – confirm the current options with MHIC)
• Guaranty Fund: All MHIC contractors pay into the Home Improvement Guaranty Fund, which compensates homeowners for actual losses from unworkmanlike, incomplete, or abandoned work – up to $30,000 per claim (with a per-contractor cap). The assessment is $100 at initial licensing and $175 at each two-year renewal

The Guaranty Fund is central to Maryland’s approach – it’s the mechanism that protects homeowners, funded by every licensed contractor.

The $500,000 Insurance Rule

A major recent change: effective June 1, 2024, under Business Regulation Article §8-302.1 (enacted through Senate Bill 806), all MHIC contractors must carry general liability insurance of at least $500,000 – a tenfold increase from the previous $50,000 minimum. Proof of current insurance must be filed with your application, coverage must remain continuously active, and you must notify the Commission before any cancellation. This is the single biggest change to MHIC licensing in recent years, so make sure your coverage meets the current $500,000 floor (older guides citing $50,000 are outdated).

Maryland Contractor Requirements at a Glance

Requirement	Detail
Statewide GC license	None – MHIC (home improvement) is the main credential
Commercial GC	No state competency license; Circuit Court license + local permits
New-home building	Separate Home Builder Registration
MHIC threshold	Home improvement work of $500 or more per contract
Experience	2 years (or equivalent education)
Exam	MHIC exam via PSI, 70% (NASCLA not accepted)
Financial solvency	$30,000 net worth or working capital, or a $30,000 surety bond
Guaranty Fund	$100 new / $175 renewal; pays homeowners up to $30,000/claim
General liability insurance	$500,000 minimum (since June 1, 2024, §8-302.1)
Workers’ compensation	Required if you have employees
Renewal	Every 2 years (biennial)
Reciprocity	None

How to Get an MHIC License in Maryland: Step by Step

Here is the practical path to the MHIC residential license.

Step 1 – Register Your Business (SDAT)

Register your business entity with the Maryland Department of Assessments and Taxation (SDAT) and register any trade name. Corporations must provide a Certificate of Good Standing. Obtain a federal EIN.

Step 2 – Meet Experience & Pass the PSI Exam

Document at least two years of home improvement experience (or equivalent education), then schedule and pass the MHIC exam through PSI at 70%. You must pass before submitting your application.

Step 3 – Line Up Insurance, Bond & Guaranty Fund

Obtain general liability insurance of at least $500,000 (naming MHIC as certificate holder), arrange the surety bond if your net worth is below $30,000, and prepare your Guaranty Fund assessment. Set up workers’ compensation if you have employees.

Step 4 – Submit Your MHIC Application

File your MHIC application with the fee, experience documentation, financial worksheet (or bond), insurance certificate, exam results, and Guaranty Fund payment. The Commission reviews the complete packet and issues the license.

Step 5 – Handle Local & Trade Licensing

Check local (county/municipal) requirements for the jurisdictions where you’ll work – especially for any commercial work, which is licensed locally – and pull building permits. If your scope includes electrical, plumbing, or HVAC, hold or subcontract to a state-licensed tradesperson.

How Much Does a Maryland Contractor License Cost?

Cost Item	Amount
MHIC application fee	Reported ~$281.25 (updated Aug 1, 2024; older $250 outdated)
Guaranty Fund assessment	$100 new / $175 at renewal
PSI exam fee	Reported ~$63
Surety bond (if net worth under $30,000)	Premium on a 30,000bond(reported~263-$900+ for two years)
General liability insurance	Premium – varies ($500,000 minimum)
Workers’ compensation	Premium – varies (required if you have employees)

The MHIC license itself is relatively affordable in board fees – the application (reported around $281.25 after the August 2024 update; older sources still show $250), the $100 Guaranty Fund assessment, and the ~$63 PSI exam. Your larger real costs are the $500,000 general liability insurance premium and, if your personal net worth is under $30,000, the surety bond premium (reported roughly 263-900+ for the two-year term). Confirm the current fee schedule at mhic.maryland.gov, since fees have changed recently.

License Renewal

MHIC licenses renew every two years (biennial). To renew, you pay the renewal fee, pay the $175 Guaranty Fund assessment, and keep your general liability insurance and (if applicable) surety bond continuously in force. As of the current rules, there’s no state-mandated continuing education for MHIC contractors – but that could change, so confirm at renewal.

The most important maintenance task is keeping your $500,000 general liability insurance active and unbroken, since a lapse puts your license at immediate risk, and you must notify the Commission before any cancellation. Keep your bond (if you have one) and your business registration current as well. Because Maryland raised the insurance floor so sharply in 2024, contractors renewing for the first time since then should double-check their policy meets the $500,000 minimum.

Does Maryland Have Contractor License Reciprocity?

No – Maryland has no contractor license reciprocity with any state. All applicants must meet Maryland’s full MHIC requirements regardless of licenses held elsewhere – there’s no shortcut for out-of-state contractors. You’ll complete the same experience, exam, financial, insurance, and Guaranty Fund requirements as any Maryland applicant, and Maryland does not accept the NASCLA exam in place of its own.

This means an experienced, licensed contractor from another state still takes the Maryland MHIC exam and meets the $500,000 insurance and financial requirements before working directly with Maryland homeowners on home improvement projects. For commercial work, you’ll deal with the relevant county or municipal licensing, which has its own (local) rules. Plan for the full Maryland process rather than expecting your out-of-state credential to transfer.

Local & Commercial Licensing

Because Maryland has no statewide commercial general contractor license, local governments carry that load – and local permitting applies to every project, residential or commercial. For commercial construction, your licensing requirements come from the county or municipality where the project is located, and they vary: some jurisdictions have contractor licensing or registration, others rely primarily on permits and inspections.

Even with an MHIC license for residential work, you still pull building permits locally and comply with local inspection requirements on every job. And a subcontractor note: as of July 1, 2016, Maryland eliminated the home improvement subcontractor license category – home improvement subcontractors may work without their own MHIC license when performing work for an MHIC-licensed contractor, but anyone dealing directly with homeowners must be licensed. Always confirm the specific local licensing and permit requirements with the jurisdiction where you’ll work.

Specialty Trade Licenses in Maryland

Maryland licenses the major trades at the state level, separate from the MHIC home improvement license. A general contractor coordinates licensed trade contractors for that work.

Electricians

Electrical work is licensed at the state level through the Maryland State Board of Master Electricians (with local licensing also in play in some jurisdictions). A general contractor engages a licensed electrical contractor license holder for electrical scope rather than self-performing it.

Plumbers

Plumbing is licensed statewide through the Maryland State Board of Plumbing, with apprentice, journey, and master classifications. A general contractor uses a licensed plumber for plumbing work and verifies the plumbing license before contracting.

HVAC

HVAC is licensed statewide through the Maryland State Board of Heating, Ventilation, Air-Conditioning and Refrigeration Contractors (HVACR). Any technician handling refrigerant also needs federal EPA Section 608 certification. A general contractor subcontracts HVAC scope to a licensed pro and confirms the HVAC license is current.

If your project involves electrical, plumbing, or HVAC work and you don’t hold the license, engage a Maryland-licensed tradesperson and verify their license before contracting. These trades require true state licenses, separate from the MHIC home improvement license.

Penalties for Unlicensed Contracting in Maryland

Maryland enforces its licensing seriously, especially for home improvement work, given the Guaranty Fund and consumer-protection focus:

• Criminal and civil penalties – Performing home improvement work without an MHIC license can bring misdemeanor charges and fines under the Home Improvement Law
• Unenforceable contracts – Unlicensed home improvement contractors can lose the ability to enforce contracts or collect payment, and homeowners may have additional remedies
• Guaranty Fund and disciplinary action – The Commission can suspend or revoke licenses and pursue disciplinary action; it has suspended contractors and paid Guaranty Fund claims against them
• Local enforcement – Working without required local permits or commercial licensing can bring stop-work orders and fines from the county or municipality
• Workers’ comp penalties – Operating without required workers’ compensation is a serious state violation

You can verify any MHIC license through the Commission’s online lookup at labor.maryland.gov. Because Maryland’s low $500 threshold captures so much residential work – and because the penalties include unenforceable contracts and criminal exposure – the practical rule is to get the MHIC license before doing home improvement work, and to confirm local requirements for commercial jobs.

How Much Does a General Contractor Make in Maryland?

General contractor earnings in Maryland are among the strongest in the country, driven by the high-cost, high-demand Washington-Baltimore metro. As a general reference point for the broader construction workforce, the U.S. Bureau of Labor Statistics tracks construction managers and related occupations, and self-employed general contractors’ income depends heavily on their work mix, project size, and how many jobs they run. For a closer look at how pay scales with role, experience, and region, this contractor and construction manager salary guide breaks the numbers down.

Maryland General Contractor Salary by Role

Because “general contractor” isn’t a single wage category, the closest picture comes from the related construction roles the BLS tracks in Maryland. Construction managers – the role most like a general contractor – earn a median well into six figures:

Role	Median Hourly Wage	Median Annual Wage
Construction Managers (GC-equivalent)	$61.70/hr	$128,330
First-Line Construction Supervisors	$37.87/hr	$78,760
Construction & Building Inspectors	$36.85/hr	$76,640
Construction Laborers	$22.58/hr	$46,960

Maryland’s construction manager median of about $128,330 is one of the highest in the country, reflecting the affluent, high-cost Washington-Baltimore market – with top earners above $206,000 a year. Because the MHIC license involves a real exam, financials, and now $500,000 insurance, licensed residential contractors face a meaningful bar to entry, which can support stronger margins for those who clear it, build a reputation, and serve the metro’s steady renovation demand.

Tips for Growing Your Contracting Business in Maryland

A successful contracting business is built on reputation, reliable delivery, and strong client and subcontractor relationships. Beyond getting licensed, the contractors who thrive treat the business side – bidding, scheduling, and project management – as seriously as the build. Here are strategies to help you grow your general contracting business in Maryland’s high-value market:

Get the MHIC license right. For residential work, the MHIC license is essential, and the $500 threshold means almost any home improvement job requires it. Prepare for the exam, financials, and $500,000 insurance before you start.

Meet the $500,000 insurance floor. Since June 2024, this is mandatory and enforced. Line up compliant coverage, keep it continuous, and notify the Commission before any change – a lapse risks your license.

Understand the work-type split. Know whether your work is home improvement (MHIC), new construction (Home Builder Registration), or commercial (local) – the right credential depends on it, and mixing them up causes compliance problems.

Leverage the Guaranty Fund story. Being MHIC-licensed and Guaranty-Fund-backed is a trust signal to homeowners. Use it in your marketing to stand apart from unlicensed operators.

Handle local permits well. Every project needs local permits, and commercial work needs local licensing. Build relationships with county and municipal permit offices where you work.

Coordinate licensed trade subs. Electrical, plumbing, and HVAC are state-licensed. Build a bench of licensed subs and verify each credential to keep projects compliant.

Bid and manage jobs with the right tools. Maryland’s high-value market rewards fast, accurate estimates and tight project management. General contractor software handles estimating, scheduling, invoicing, and client communication in one place – so you spend more time building and less on paperwork. Make it easy for clients to reach and book you with online booking.

Build your reputation online. Maryland homeowners research contractors carefully, and MHIC status is publicly searchable. A strong online presence, verifiable license, and clear reviews are among the highest-return investments for winning larger projects.

Maryland vs. Neighboring States: How Does Licensing Compare?

State	Statewide GC License?	Model	Exam Required
Maryland	Home improvement only (MHIC)	State HI license + local commercial	MHIC exam (PSI)
Virginia	Yes – state license (A/B/C)	State licensing	Exam + education
Pennsylvania	Home improvement registration	State registration (HICPA)	No exam
Delaware	Business license (no competency)	State business license	No exam
West Virginia	Yes – state license	State licensing	Exam

Maryland occupies a middle ground in the region: it licenses residential home improvement statewide through the MHIC (with a real exam and financials), but – unlike Virginia or West Virginia – it has no statewide commercial general contractor license, leaving commercial work to local governments. It’s more demanding than Pennsylvania’s registration or Delaware’s business-license model on the residential side, thanks to the exam, Guaranty Fund, and the $500,000 insurance requirement. What defines Maryland is this work-type split and its strong consumer-protection framework (the Guaranty Fund plus the low $500 threshold). For a contractor, the key is matching the right credential to the work.

Ready to Build Your Maryland Contracting Business?

Maryland rewards contractors who match the right credential to their work. For residential remodeling and repairs, get the MHIC license: document your experience, pass the PSI exam, line up your financials or bond, pay into the Guaranty Fund, and carry the required $500,000 general liability insurance. For commercial work, handle local county and municipal licensing; for new construction, register as a home builder. Keep your insurance continuous, renew every two years, and pull local permits on every job – and you’ll have the right credentials in one of the highest-value construction markets in the country.

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