As a first-time homebuyer, becoming a homeowner may seem like an impossible undertaking.
With many first-time homebuyers still drowning in student debt and efforting to move beyond living paycheck to paycheck, it can be a constant struggle to save enough money for a down payment — let alone save for additional closing costs, mortgage payments, utilities, and moving expenses.
But luckily, for first-time homebuyers in Washington DC, you have a plethora of support programs, grants, and loan options to help you jump over some of these seemingly insurmountable financial hurdles.
Washington DC Programs for First-Time Home Buyers
Washington DC wants to make sure first-time homebuyers are able to see their dreams through and become homeowners. To do this, the district created flexible programs to give potential homebuyers every opportunity possible.
This means if you meet the eligibility requirements for each and every home buyer program, you're able to apply and use multiple programs to your advantage.
Washington DC also opted to allow buyers to use both these state programs alongside federal first-time homebuyer programs such as FHA loans or conventional first trust loan financing to give residents the ability to begin creating the life they want.
Home Purchase Assistance Program (HPAP)
If you're a first-time homebuyer concerned about high interests and extra lofty fees, the Home Purchase Assistance Program may be right for you.
HPAP is catered to those first-time homebuyers who need assistance in covering closing costs. The program also offers interest-free loans on single family homes, condominiums, and cooperative units.
The loan amount does depend on various factors including income, household size, and assets. However, with this support and financial backing, more first-time homebuyers can actually purchase their first home.
How do you qualify?
You must be a first-time buyer with a very low to moderate income and good credit. You also are required to be the head of the household and plan to make this home your permanent residence in the District of Columbia.
Employer Assisted Housing Program (EAHP)
The second DC program you can apply for as a first-time homebuyer is the Employer Assisted Housing Program.
EAHP provides financial assistance to those first-time homebuyers who are full-time government employees or who are first responders.
If you're approved, you'll receive a 0% interest loan, as well as matching funds, grant with a max of $5,000 for government employees and a max of $15,000 for first responders.
This money can be used for a down payment and closing costs on single-family homes, condominiums, or cooperative units.
There's no income cap to qualify for EAHP, however, if you're a government employee you must have worked for the government for at least one year. This service requirement doesn't apply to first responders.
Negotiated Employee Assistance Home Purchase Program (NEAHP)
The NEAHP grant is another program for government employees who are in good standing and who are covered by specific collective bargaining agreements.
This grant offers finances to first-time homebuyers to cover their down payment and help with closing costs.
Additionally, to be eligible for the NEAHP, you must have good credit and plan on making this home your permanent residence in DC.
And along with the three DC programs above, make sure you check out these additional assistance programs to make sure you're taking advantage of every opportunity.
Federal First-Time Home Buyer Programs
While DC residents may have a leg up when it comes to immersing themselves in everything government-related, make sure you're aware and understand the many federal first-time homebuyer programs available.
203k Rehab Loans
If you're pretty handy with tools and possess a skill set beyond righty-tighty, lefty-loosey, a 203k Rehab Loan might be a perfect fit.
An extension of the FHA loan program, a 203k Rehab Loan gives you the funds to buy a fixer-upper home. The loan provides you with enough funds to not only buy the home, but enough money to renovate it as well.
Good Neighbor Next Door Program
This first-time buyer program offers teachers, firefighters, and police officers 50% off HUD-approved homes. The only requirement is you must make a $100 down payment.
Along with these two federal first-time buyer programs, another popular option is the FHA Loan Program. Learn more about the program requirements in the District of Columbia compared to the rest of the country.
Private Lender Programs in Washington DC for First-Time Home Buyers
These types of lender programs are designed to help first-time homebuyers get on their feet by providing financial assistance — whether through offering low-interest rates, help for a down payment, or even covering closing costs.
HomeReady Mortgage Program
Fannie Mae's HomeReady mortgage allows a lot of flexibility for first-time buyers. Boasting a .5% lower down payment compared to an FHA loan, HomeReady loans only require a 3% down payment.
These funds can help cover a down payment as well as closing costs. And to save even more, the down payment can also be paid by having a friend or family member give it to you as a gift.
HomeReady eligibility requirements are quite flexible. To qualify, you must have low to moderate income and a credit score of 620 or higher.
HomeOne Mortgage Program
Only available to first-time buyers, the HomeOne mortgage loan is an appealing choice because, just like the HomeReady loan, the down payment requirement is only 3%. One difference, however, is this program eliminates income and geographic restrictions.
Be aware, this loan program is available only as a fixed-rate mortgage, your home must be a one-unit residence, and you will have to pass a risk assessment by the Freddie Mac Loan Product Advisor.
And to help you find the best loan option for your situation, Washington, DC's Department of Housing and Community Development Community-Based Non-Profit Organizations help first-time homebuyers with resources, support, counseling, and training.
This non-profit program focuses on assisting low to medium income homebuyers, advising on credit, home/budget management, homebuyers clubs, relocation counseling, and more.
Home Buyer Rebate
If you're thinking of taking the leap and moving forward on purchasing a home as first-time homebuyer, you'll want to collaborate with a professional local real estate agent to help you evaluate your financing options.
Clever Partner Agents can guide you through the entire process including both the lender side and with the home-buying process at large. Clever agents excel at finding you countless savings using their expertise to time the market, negotiate, and to properly calculate the value of your home.
In addition, when you partner with Clever, you can take advantage of Clever's Home Buyer Rebate program. This program offers you more savings with home buyer rebates, also called commission rebates, where your real estate agent will give you a portion of their commission.
Use the rebate towards making your down payment, mortgage payment, covering closing costs, moving expenses, and more. As a first-time homebuyer, you'll want to utilize Clever's rebate program to get the most bang for your buck.