Washington, D.C., First-Time Home Buyer Programs of 2021

NerdWallet
By NerdWallet 
Edited by Alex Richards
GettyImages_1135086329_Story.jpg

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Washington, D.C., is an expensive place to live, making homeownership feel out of reach for many first-time buyers. The District of Columbia’s Housing Finance Agency, or DCHFA, offers several programs designed to help.

First-time home buyers in Washington, D.C., may also benefit from the relaxed qualification requirements that some national loan programs offer. Explore all the options for buying your first home in America’s capital city.

National first-time home buyer programs

These mortgage products typically have low down payment or credit score requirements, and are offered by most lenders.

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

Getting ready to buy a home? We’ll find you a highly rated lender in just a few minutes.

Enter your ZIP code to get started on a personalized lender match.

 

DCHFA highlights and eligibility requirements

Through its various assistance programs, DCHFA can help first-time home buyers become homeowners sooner and with fewer upfront costs.

Highlights

  • Open to first-time borrowers and, in some cases, repeat home buyers, as well.

  • Down payment and closing cost assistance available.

  • Federal tax credits available.

  • Condos and cooperative units may also be eligible.

Eligibility

  • Borrower’s income and debts must be within program limits.

  • Borrower must have an acceptable credit score.

  • Loan amount limits may apply.

DCHFA first-time home buyer programs

D.C. Open Doors

Best for:

Low mortgage rates, down payment assistance

What you need to know:

This program offers mortgages at below-market interest rates for home buyers in D.C. Qualified borrowers may be able to get assistance for their entire minimum down payment amount. Assistance is provided in the form of a deferred, nonamortizing zero-interest loan. No repayment is required until the borrower refinances the mortgage, sells or transfers the home, establishes another primary residence or 30 years has passed since the closing date. Though you don't need to be a first-time home buyer to qualify, you can't own another home at closing — so if you're already a homeowner, your previous home needs to have sold before you can close on your new place.

Home Purchase Assistance Program (HPAP)

Best for:

Low income borrowers, down payment assistance, closing cost assistance

What you need to know:

This program gives eligible first-time home buyers up to $84,000 in combined down payment and closing cost assistance. These funds are provided as a no-interest loan, with no payments required for the first five years. Immediate repayment of the remaining balance is required if the borrower sells or refinances the property, or stops using it as their primary residence.

Mortgage Credit Certificate (MCC)

Best for:

Tax credits

What you need to know:

First-time home buyers — those who haven’t owned a house in the past three years — can use this program to get a tax credit of up to 20% of their annual mortgage interest. The first-time homebuyer requirement may be waived for veterans or those who purchase in certain areas of Washington, D.C. The MCC can be used by itself or in combination with a DCHFA loan program.

Summary: 2021 DCHFA first-time home buyer programs

  • D.C. Open Doors program for low rates and down payment assistance.

  • Home Purchase Assistance program for help with a down payment and closing costs.

  • Mortgage credit certificate for an annual tax credit of up to 20% of paid interest.

Now that you have a better idea of the first-time home buyer programs available in Washington, D.C., it’s time to think about next steps. Start by reading the full details of these assistance programs on the DCHFA website.

You can also reach out to a DCHFA participating lender to find out if you meet program eligibility requirements, and to get more information about how to submit a full mortgage application.

More from NerdWallet

Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.