In 1986, Juanda Smith was saving money toward her dream of becoming a homeowner. It wasn’t enough.
“I saw a condo I liked, and I was so fortunate that the sales person there encouraged me to contact the Manna/FLOC nonprofit,” says Smith, who works for the U.S. Commission on Civil Rights. “They were able to help with the extra money I needed for down payment and closing costs.”
Thirty-two years later, Smith still lives in the co-op in the Truxton Circle neighborhood she purchased with the help of housing counseling services and the District’s Home Purchase Assistance Program (HPAP).
Since the program started in 1978, HPAP has served more than 7,700 households and provided more than $210 million in down payment and closing cost assistance. HPAP is among hundreds of homeownership support mechanisms available to buyers in jurisdictions across the country that offer similar financial aid and housing counseling.
HPAP offers up to $80,000 in financial aid for home buyers depending on household income, need and the availability of funds. Borrowers may also be eligible for $4,000 in closing cost assistance.
“We’re involved with homeownership programs in the District, suburban Maryland, suburban Northern Virginia and Baltimore, and HPAP is by far the shining gem of these programs,” says Marla Bilonick, executive director of the Latino Economic Development Center, a nonprofit with a variety of asset-building programs, including homeownership programs for Latinos and other underserved populations. “The District is the most generous city, and this program has made homeownership accessible for thousands of people in the city.”
HPAP eligibility requirements include:
● Borrowers must be first-time buyers, defined as not owning any residential real estate during the previous three years.
● Borrowers must have good credit.
● Borrowers must buy a home in the District that will be their primary residence.
● Borrowers must have low-to-moderate household income, which varies based on household size and area median income. For example, a two-person household with an annual income of $70,600 would be eligible for up to $40,000 in down payment assistance and a four-person household with an annual income of $108,000 would be eligible for up to $32,000.
●Home buyers need to contribute $500 or 50 percent of their own liquid assets greater than $3,000.
The down payment funds are in the form of a loan that must be repaid when the homeowners sell their home, transfer ownership or refinance.
For moderate-income households, loan repayment starts five years after the home purchase and is a principal-only payment for 40 years. For low-income households, repayment is waived until the home is sold or refinanced.
While the funds are essential to helping people move from renter to homeowner, like most homeowner assistance programs, HPAP requires applicants to take courses to manage their budget and finances so they can sustain homeownership.
To apply for HPAP assistance, individuals must contact one of several community-based organizations such as the Latino Economic Development Center or Housing Counseling Services to receive housing counseling and HPAP application services. The organization forwards the completed application to an HPAP administrator (Greater Washington Urban League or the DC Housing Finance Agency), which processes the applications on the District’s behalf.
The HPAP administrator will review the application, determine eligibility and issue an eligible applicant a notice of eligibility. The notice will outline the maximum amount of assistance available and the homeownership steps to follow.
“Not every client who comes to us is immediately ready for homeownership, so our housing counselors work with them to help them improve or build a credit profile,” says Bilonick.
Most of the people who come to the Latino Economic Development Center for homeownership assistance pay more in rent than they will pay for their mortgage, Bilonick says.
“The hurdle is just the down payment,” she says. “Once we get them over that, they’re actually less financially stressed.”
HPAP prioritizes District residents, but it is open to people who have worked in the District for at least one year and want to own a home in the city.
For more information on HPAP, visit https://dhcd.dc.gov/publication/homebuyer-fact-sheet
To learn more about eligibility, visit https://dhcd.dc.gov/page/hpap-eligibility-how-apply-and-program-details