Hagerstown Homeownership Initiative (Invest Hagerstown loan-to-grant)

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 Housing & Community 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 entire 0% deferred loan is forgiven after five years of living in the home as your primary residence.
• When you would repay: If the home is sold, transferred, refinanced, or not your primary residence before five years, the full original loan amount is due to the city right away.

Who qualifies

• Repeat buyers welcome. Not limited to first-time buyers. The city's goals name first-time buyers and current renters, but the guidelines do not require first-time status. Each household can use the program only once.
• Income. The city's current program guidelines (version 09/28/2026) do not list a household income cap. Confirm with the Department of Housing & Community Development (301-739-8577 ext. 131) before you apply (checked 2026-10-21).
• Price. The purchase price can be no more than 100% of the average home sale price within Hagerstown city limits, as determined by the National Association of Realtors (city guidelines version 09/28/2026). The city does not publish the dollar figure, so ask for it before you write an offer.
• Property types: Single-family detached (pre-owned), Single-family attached (pre-owned), Townhouse (pre-owned), Condo (pre-owned). Must be your primary residence.
• The home must be inside the City of Hagerstown corporate limits and must be pre-owned: a single-family attached or detached home, a townhome, or a privately owned condo.
• You must use lender financing, and the loan-to-value cannot be lower than 80%.
• You cannot receive more than $250 back at settlement.
• The application must reach the city at least 30 days before settlement.
• One award per household. You must live in the home as your primary residence for five years for the loan to be forgiven.

How to apply

1. 1Call the Department of Housing & Community Development at 301-739-8577 ext. 131 to confirm funding is available and to get the current average sale price ceiling, guidelines, and application.
2. 2Line up a lender. The program requires lender financing with a loan-to-value of at least 80%.
3. 3Find a pre-owned home inside city limits at or under the price ceiling and get a ratified contract.
4. 4At least 30 days before settlement, submit the application with your signed mortgage loan application, the signed purchase contract, and a copy of your driver's license. That pre-qualifies you and reserves funds. City staff review applications first come, first served.
5. 5Before settlement, send the city's signed commitment letter, Truth in Lending form and lead-based paint receipt, plus your appraisal, lender commitment letter, and proof of homeowner's insurance listing the city as mortgage payee.
6. 6If 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. Awards are first come, first served and subject to funding. Call before you write the offer.
• The 30-day rule matters. If settlement is less than 30 days after the city gets a complete application, the city says settlement may be delayed.
• Repayment is all or nothing. Sell, transfer, refinance, or move out before five years and the full original amount is due, not a prorated share.
• The price ceiling is the average sale price in the city, not 125% of it as in older versions. Get the current number from the city before you set your search range.
• 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.

Straight answers

Sources

• City of Hagerstown, Hagerstown Homeownership Initiative (program page) (read Oct 21, 2026)
• City of Hagerstown, Hagerstown Homeownership Initiative guidelines, version 09/28/2026 (PDF) (read Oct 21, 2026)
• City of Hagerstown, Hagerstown Homeownership Initiative application and checklist, version 09/28/2026 (PDF) (read Oct 21, 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.