3.1 Application Process and Current Fees

The Sequence: Exam First, Application Second

The single most important procedural fact about the Maryland Home Improvement Commission (MHIC) contractor license is the order of operations: you pass the PSI exam before you submit your license application. MHIC will not act on an application from a candidate who has not passed the exam, and your passing score report is valid for 2 years from the date you pass. If you let more than two years go by without completing your application, you must retake the exam.

The exam is administered by PSI Services LLC under contract with the Commission. The exam fee is $63, paid directly to PSI when you schedule — it is separate from, and in addition to, every fee you later pay to MHIC. Exam questions love to test whether candidates confuse the PSI exam fee with the Commission's application fees.

What the Application Package Contains

After passing, you assemble an application package for the Commission. In addition to the fees described below, MHIC requires the applicant to demonstrate qualifications set out in the Maryland Code, Business Regulation Article, Title 8, including at least 2 years of experience in home improvement work (or related construction experience acceptable to the Commission) and proof of liability insurance of at least $500,000 under Business Regulation Article § 8-302.1. The individual who actually took and passed the exam must be identified on the application — for a company, that person is tied to the license as the qualifying individual.

The Fee Schedule (Effective August 1, 2024)

MHIC raised its fees effective August 1, 2024. For an original contractor license, which is issued for a 2-year term, the applicant pays three separate charges:

The Guaranty Fund assessment deserves special attention because it appears constantly on the exam. The Home Improvement Guaranty Fund is a state fund, financed entirely by contractor assessments rather than tax dollars, that compensates homeowners up to a statutory cap when a licensed contractor performs unworkmanlike or inadequate work and fails to pay an award. Every original applicant pays the $100 assessment at initial licensure; a separate, larger assessment is collected at renewal (covered in Section 3.2).

The small $22.50 processing fee is easy to overlook — do not drop it when a question asks for the total amount due.

Multiple Locations

If the business operates from more than one location, the applicant pays $281.25 for each additional company location beyond the principal office. Note what this fee is not: it is an application fee only, not a second full package — the Guaranty Fund assessment is not duplicated per location.

Worked example. A remodeling company with a principal office and two branch showrooms applies for its original contractor license. The principal location carries the full package — $281.25 application + $100 Guaranty Fund + $22.50 processing = $403.75 — and each of the two branches adds $281.25. Total due to MHIC: $403.75 + $281.25 + $281.25 = $966.25, plus the $63 already paid to PSI for the exam.

Who Needs the License — and Why the Fees Exist

Title 8 requires a license before anyone may perform, or offer to perform, home improvement work on residential property in Maryland — additions, alterations, remodeling, repair, replacement, and similar improvements to homes and adjacent structures. The exam frequently frames this as a scenario: a handyman who "only takes small jobs" or a contractor who "only pulls permits for others" is still performing or offering home improvement work and still needs the license. The fees are not interchangeable in purpose, which is why the exam tests them separately:

• The application fee funds the Commission's processing of your file.
• The Guaranty Fund assessment is pooled to protect homeowners — it is not insurance for the contractor, and paying it does not shield the contractor from claims; the Fund can seek repayment from a contractor it pays out against.
• The processing fee is a small fixed administrative charge applied to the original application.

A complete, accurate application matters in practice: MHIC will hold an incomplete package rather than issue the license, and the exam-pass clock (2 years) keeps running while deficiencies are cured.

Salesperson Licenses

A home improvement salesperson — an individual who solicits, sells, or negotiates home improvement contracts on behalf of a licensed contractor — needs a separate MHIC license. Salesperson applicants must pass a 35-question exam administered by PSI, according to the Commission's official FAQ — a shorter exam than the contractor's, but an exam nonetheless. The fees are:

The salesperson application must include an Employing Contractor Affidavit — a sworn statement from the licensed contractor who employs the salesperson. This affidavit is a favorite exam detail: a salesperson license is anchored to a specific employing contractor, and the contractor is responsible for notifying the Commission when it hires or terminates a salesperson (fines for failing to notify appear in Section 3.3).

Common Exam Traps

• Wrong sequence. Any answer choice that has you applying to MHIC before passing the PSI exam is wrong.
• Fee mix-ups. The $63 goes to PSI; the $281.25/$100/$22.50 goes to MHIC. Questions often swap them.
• Forgetting the processing fee. $281.25 + $100 = $381.25 is a tempting distractor; the correct total is $403.75.
• Salesperson exam. Salespersons do sit for a PSI exam — a 35-question test per the official MHIC FAQ — but it is separate from and shorter than the contractor exam; do not conflate the two.