Five First-Time Home Buyer Assistance Programs in Washington DC
There are several programs in the DC area available to help first-time home buyers. Since home buyer assistance programs are made of many interconnected parts, they can be
difficult to understand.
I want to provide you with a small amount of clarity on five programs available to first-time home buyers in the DC area first and more information on programs in Maryland and Virginia later.
DC Open Doors: Many qualify for this program. You may be a homeowner in need of down payment assistance because your income level exceeds the accepted income levels of other assistance programs. (Earning up to $123,395 a year makes you eligible for this one). Or you may be a homeowner planning to stay in Washington DC for a while who needs a simple way to get part of a deposit loan forgiven. In either case, DC Open Doors is designed to help you. Your credit score must be 640 or higher with a maximum debt-to-income ratio of 45 percent in order to qualify. DC Open Doors will offer a loan of either 3.5 or 3 percent of the price of the home purchased to be used as a down payment (for either an FHA-backed loan or a standard loan through Fannie Mae). Then 20 percent of that loan is forgiven for every year you stay in the home
Individual Development Account (IDA) program: If your income falls into the lower-income category, an IDA program may be what you need to buy a home. An IDA program sets you up with a savings account, which is held in escrow. This account is then matched to help build up your investment and encourage you to save. Participants in the IDA program at Capital Area Asset Builders in DC receive dollar-for-dollar matches while they attend classes and receive training on finances and budgeting before they purchase a home.
Home Purchase Assistance Program (HPAP): Qualifying for an HPAP can be tough because the list of criteria for eligibility is quite long. An HPAP awards amounts based on three things: your income, size of your household, amount of your down payment. But as a qualifying first-time home buyer, you’ll get an interest-free loan of up to $40,000 max and an additional $4,000 to help with closing costs with an HPAP.
Employer Assisted Housing Program (EAHP): If you are a first-time home buyer and you work for the city of Washington DC, this program is for you. DC will match down payments by up to $1,500 and a deferred loan of up to $10,000. As a qualifying DC city worker, you’ll receive incentives like income and property tax credits for the first five years, too, but your home purchase cannot exceed $417,000 with an EAHP.
Lower-Income Home Ownership Tax Abatement: For a Lower-Income Home Ownership Tax Abatement, you must meet the income requirements and live in a home worth less than $356,000. As an eligible buyer, you could enjoy up to five years without property tax.
Spring is here, and that means the housing market in DC, Maryland and Virginia is in full swing. Contact me, Sheena Saydam, at Sheena@SaydamProperties.com or call 202-243-7700, and let me help you with the home-buying process from offer to down payment to mortgage.