Down payment assistanceMaryland
Hagerstown Homeownership Initiative (Invest Hagerstown loan-to-grant)
Up to $7,500 toward down payment and closing costs inside Hagerstown city limits
The city calls it a loan-to-grant. It starts as a zero-interest loan with no monthly payment. Live in the home as your primary residence for five years and it becomes a grant. Leave early and you repay under the terms in your loan documents.
We have not confirmed current funding. Check with the administrator before you rely on it.
Last verified Sep 23, 2026. Program terms change; confirm with the administrator before you rely on them.
At a glance
- Amount
- Up to $7,500 toward down payment and closing costs inside Hagerstown city limits
- Type of help
- Forgivable loan
- Where
- City of Hagerstown, Washington County
- Run by
- City of Hagerstown Department of Community and Economic Development
- First-time buyer
- Repeat buyers welcome
- Income limit
- Yes, see below
- Price limit
- Yes, see below
- Homebuyer education
- Not required
How the forgivable loan works
A second loan with no payment that is forgiven over time or after a set number of years in the home.
- Interest: 0%
- Monthly payment: None
- Forgiveness: The 0% loan converts to a grant after five years of living in the home as your primary residence.
- When you would repay: Sell or stop living in the home before the five years are up and the balance, or a prorated share, is due.
Who qualifies
- Repeat buyers welcome. Not limited to first-time buyers. The city gives priority to first-time buyers, current renters, and buyers of vacant homes.
- Income. The city's Invest Hagerstown program budget does not list a household income cap for the Homeownership loan-to-grant. Confirm current income rules with the Department of Community and Economic Development (301-739-8577 ext. 111) before you apply (checked 2026-09-22).
- Price. Eligible homes may not exceed 125% of the average home sale price within city limits (city FY2025 program chart). Ask the city for the current dollar figure.
- The home must be inside the City of Hagerstown corporate limits.
- You must have a mortgage pre-qualification letter to apply.
- You must live in the home as your primary residence for five years for the loan to convert to a grant.
How to apply
- 1Get pre-qualified for a mortgage. The city requires proof of pre-qualification with the application.
- 2Call the Department of Community and Economic Development at 301-739-8577 ext. 111 to confirm funding is available for the current fiscal year and to get the current guidelines and application.
- 3Find a home inside city limits under the city's price ceiling and get a ratified contract.
- 4Submit the Homeownership Initiative application with your pre-qualification letter and contract. The city's review committee approves awards.
- 5If you are also using the Hagerstown Home Store's Community Partners Incentive Program (up to $6,000), complete Home Store counseling before you sign a contract; that program requires it.
Watch out for
- Funding is set each July in the Invest Hagerstown budget (the FY2025 line was $165,000 for homeownership) and runs out. The city has posted 'funds exhausted' notices in past years. Call before you write the offer.
- The city's program pages were not reachable by our tools on 2026-09-22; the terms here come from the city's published Invest Hagerstown program documents. Confirm details by phone.
- The city also runs a separate Homeownership Program that renovates vacant houses and sells them at appraised value to buyers under CDBG income limits ($57,700 for one person up to $108,800 for eight on the city's page). That is a different program from the loan-to-grant.
- The Hagerstown Home Store's Community Partners Incentive Program adds up to $6,000 with a counseling-before-contract rule and income limits. Ask the Home Store (301-797-0900) how it layers with HHI.
Hagerstown prices make $7,500 go a long way. Combine it with the Home Store's $6,000 and a Maryland Mortgage Program loan and a modest budget starts to work.
Straight answers
Do I have to pay the Hagerstown money back?
Not if you live in the home as your primary residence for five years; the loan converts to a grant. Sell or move earlier and you repay under your loan documents.
Do I have to be a first-time buyer?
No, but the city gives priority to first-time buyers, current renters, and buyers of vacant properties when it ranks applications.
What about homes just outside the city line?
They do not qualify. The Homeownership Initiative is limited to the City of Hagerstown corporate limits. Washington County addresses outside the city should look at the Maryland Mortgage Program instead.
Sources
- City of Hagerstown, Hagerstown Homeownership Initiative (program page) (read Sep 22, 2026)
- City of Hagerstown, Invest Hagerstown FY2025 funding levels and Homeownership Loan to Grant description (council document, June 2024) (read Sep 22, 2026)
- City of Hagerstown, Homeownership Program (renovated homes, CDBG income limits) (read Sep 22, 2026)
- Hagerstown Home Store, homebuyer programs (Community Partners Incentive Program) (read Sep 22, 2026)
Program details are summarized from public sources and change without notice. Funding badges reflect the last time we checked, not a guarantee of availability. This is buyer education from a real estate agent, not a loan pre-approval or a commitment to lend. Eligibility is decided by each program administrator and your lender. Equal Housing Opportunity.
Programs are the easy part. Timing is the hard part.
Most buyers lose assistance on a deadline, not on eligibility. Sean helps you map out the counseling, the lender conversation, and the contract dates so nothing slips.