City of Fredericksburg Direct Homeownership Assistance Program

What is City of Fredericksburg Direct Homeownership Assistance Program?

City of Fredericksburg Direct Homeownership Assistance Program is a forgivable loan for homebuyers in Fredericksburg, Virginia, administered by City of Fredericksburg Office of Planning and Community Development.

• Funded through the City's CDBG allocation, the Direct Homeownership Assistance Program helps low- and moderate-income City residents (at/below 80% AMI) buy a primary residence within Fredericksburg city limits. It provides a secured forgivable loan of $3,000-$10,000 (tiered by income) toward closing costs and/or up to 50% of down payment costs. The loan is fully forgiven after five years; if sold sooner, the assistance plus 10% interest and a share of appreciation must be repaid.
• Up to $10,000 / 50% of down payment.
• Closing cost assistance.
• Fully forgiven after 5 years.
• 0% interest if held 5 years.
• Refinance assistance also available.
• This is a federal program, so it is available beyond a single state or city.
• Funding comes from Community Development Block Grant (CDBG).

How much assistance does it provide?

City of Fredericksburg Direct Homeownership Assistance Program offers between $3,000 and $10,000 in assistance.

• Amounts are the program's published maximums, not an offer — City of Fredericksburg Office of Planning and Community Development determines any individual award.

Do you have to pay it back?

City of Fredericksburg Direct Homeownership Assistance Program is forgiven after 5 years, so a buyer who stays that long does not repay it.

• Repayment is triggered by If sold within 5 years, assistance plus 10% interest plus proportionate share of appreciation due; fully forgiven if owned past 5 years.
• The assistance is recorded in Secured by mortgage lien and promissory note position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

City of Fredericksburg Direct Homeownership Assistance Program is open to buyers who will live in the home as their primary residence.

What are the income limits?

City of Fredericksburg Direct Homeownership Assistance Program limits household income to 80% of the area median income, which varies by county and household size.

• Total household income at/below 80% AMI (HUD Section 8 limits, 24 CFR 5.609) by household size. Fredericksburg is in the Washington-Arlington-Alexandria HUD area (4-person 80% ~ $106,800 for 2026).
• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

City of Fredericksburg Direct Homeownership Assistance Program caps the purchase price as follows: No stated max price; assistance limited to tiered loan caps.

Where does it apply?

City of Fredericksburg Direct Homeownership Assistance Program is a federal program, so it is not limited to Virginia.

How do you apply?

Applications for City of Fredericksburg Direct Homeownership Assistance Program go through City of Fredericksburg Office of Planning and Community Development, which publishes the current terms and the application steps on its own site.

1. 1

   Contact City of Fredericksburg Office of Planning and Community Development to reserve funds

   Funds are reserved through First-come, first-served at Office of Planning and Community Development; waitlist as funds allow, and are subject to availability.

2. 2

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.