The recently passed Fiscal Year 2019 Budget for the District of Columbia funds many new and enhanced programs. One of the most interesting from a real estate perspective is the large increase in DC down payment assistance funding.
DC Down Payment Assistance Boost
The 2019 Budget increases programs that help low- and moderate-income residents become first-time homebuyers. Total funding for these DC down payment assistance programs will jump to $26.2 million, a $9.2 million increase over Fiscal Year 2018! The increase for FY 2019 is intended to help keep pace with the District’s high and rising home prices and the increased popularity of these first-time home buyer programs.
Mayor Bowser and the DC Council have a major challenge in preserving and producing affordable housing in a quickly rising real estate market. This increase in funding shows that they are committed to building more affordable home ownership opportunities for DC residents.
Home Purchase Assistance Program
The Home Purchase Assistance Program (HPAP) provides first-time homebuyers with help to cover the down payment and closing costs associated with a home purchase in the city. The program is targeted at moderate and low-income families. Up to $84,000 in assistance is available.
Funds are provided in the form of a deferred loan. For families with moderate incomes, monthly payments begin in the sixth year of the loan. Very low-income families do not have to make any payments.
To be eligible for HPAP assistance, you must be a head of household and a first-time homebuyer. You must also have decent credit and have not owned a home within three years before applying.
Employer Assisted Housing Program
The Employer Assisted Housing Program is known as EAHP (but pronounced “EHAP”).
EAHP provides city workers with help to cover the down payment and closing costs associated with a home purchase in the city. Up to $25,000 in assistance is available for most workers. First-responders can receive an additional $20,000 in benefits.
For all District workers, funds are provided in the form of a deferred loan with a maximum amount of $20,000. This is a zero-interest, deferred loan and no payments are required until the home is sold.
The matching funds grant provides $1,000 in grant funds to match each $2,500 in borrower funds, up to $5,000 in grant funds.
First-responders can get the benefits listed above, plus more. You can receive a $10,000 recoverable grant if you complete a five-year service agreement. Your matching funds grant grows in $1,500 increments for each $2,500 in borrower funds, up to $15,000 in grant funds.
There is no income cap.
As a bonus, you can receive both Employer Assisted Housing Program and Home Purchase Assistance Program funds if you are eligible for both programs.
To be eligible for EAHP assistance, you must be a District government employee and a first-time homebuyer in the District.
Both the Home Purchase Assistance Program and the Employer Assisted Housing Program require first-time homebuyers to complete a Pre-purchase Homebuyer Education program. This training is designed to provide with the knowledge and skills to successfully purchase and maintain a home in the District of Columbia.
If you are thinking about buying a home later this year or early next year, I would recommend that you plan to complete your orientation and homebuyer education as soon as possible. Once the funds for these programs run out for the year, they are gone. Act now to be ready while the funds are still available.
Call me today at 202.717-2276 to get started.
Learn more about other great assistance programs at my page Diary of a First Time Home Buyer.
Source: DC Fiscal Policy Institute Fiscal Year 2019 Budget Tool Kit