"It will enable more people to purchase houses because the interest rate is almost half what the regular interest is," Andreve said.
This one-time offer from the state gives eligible applicants 18 months to apply for the 30-year loans, said Sue DuPont, spokeswoman for the Maryland Department of Housing and Community Development.
The program is part of the governor's Smart Growth initiative, which includes strengthening and revitalizing old neighborhoods, DuPont said.
The low-interest mortgage loans will encourage people to buy houses in existing neighborhoods, she said.
For Hagerstown, those neighborhoods are:
- Between West Side Avenue and Summer Street to South Burhans Boulevard to the Conrail line and Linganore Avenue.
- From Church Street to the railroad at Pennsylvania Avenue and from North Prospect Street to Potomac Avenue, but not including Potomac Avenue.
- From Bester Elementary School to McComas Street and from North Cannon Avenue to Potomac Avenue, but not including Potomac Avenue.
"We targeted some of the lowest areas of owner-occupied housing," Andreve said.
Overall, the city's homeownership rate is about 40 percent compared with 60 percent statewide.
In the Jonathan Street neighborhood, the homeownership rate is 20 percent and in the area along Locust Street and Cannon Avenue, the homeownership rate is 24 percent, Andreve said.
The maximum house price is $163,678, which is more than any house in the designated areas would cost, Andreve said.
To be eligible for the low-interest rate, the maximum annual income for households of one or two people is $69,360, Andreve said. The maximum annual income for households with three or more members is $80,920, he said.
Participants cannot rent the house and if they move, they must pay the mortgage in full at the time of the move, Andreve said.
To be eligible, applicants must have 30 percent of their gross income available to pay the loan's principal, interest, taxes and insurance, Andreve said.
They must have 40 percent of their gross income available to pay the loan's principal, interest, taxes, insurance and long-term debt such as car and credit card payments, he said.
The loans can be applied for through a Federal Housing Administration lender, Andreve said.
To find a qualified lender, call your Realtor, bank, mortgage company or call the Hagerstown Department of Community Development at 301-739-8577, ext. 136.