If you’re buying your first home and it’s in our nation’s capital, get ready for a competitive market. Strong demand for housing has been driving real estate prices in the Washington, D.C. metro area, though the average home value has fallen to $615,692, according to Zillow — down 2.2 percent from January 2022. Prices in nearby Fairfax County and Vienna have also dropped since both peaked in June 2022, but not by much.

To help first-time homebuyers, the District of Columbia Housing Finance Agency has a variety of affordable mortgage and down payment and closing cost assistance programs. Here’s a look at the options that might be available to you.

Washington, D.C. first-time homebuyer loan programs

DCHFA DC Open Doors program

You don’t necessarily have to be a first-time homebuyer to apply for the District of Columbia Housing Finance Agency’s (DCHFA) DC Open Doors mortgage, as long as you don’t already own another property. With this mortgage, you get a below-market interest rate along with the option for a separate deferred loan to cover the down payment.

To qualify, you must have a minimum credit score of 640, and your individual income (not the combined household income) can’t be more than $154,800 per year. Other requirements include having a debt-to-income (DTI) ratio no higher than 50 percent (or no higher than 45 percent if obtaining an FHA loan). There are no restrictions on the home purchase price, but the loan size is capped at $647,200.

DCHFA DC4ME program

Government employees buying their first home can get a reduced interest rate on a mortgage through the DCHFA’s DC4ME program. The program includes the option to get 3 percent in down payment assistance, which comes in the form of an additional zero-percent loan.

To be eligible, you (or at least one of the borrowers of the loan) must be a full-time employee of one of the many District governmental agencies, independent agencies, District of Columbia Public Charter Schools or other organizations that are overseen by the Council of the District. If you’re not sure whether your organization qualifies, check this list of eligible employers.

You’ll also need to meet these requirements:

  • 640 minimum credit score
  • Maximum 50 percent DTI ratio
  • No more than $154,800 in household income
  • No more than $565,300 home purchase price

You must also complete a homebuyer education class.

Washington, D.C. down payment assistance

DCHFA Home Purchase Assistance Program (HPAP)

DCHFA’s Home Purchase Assistance Program (HPAP) provides first-time homebuyers with up to $80,000 to use toward a down payment, packaged as a separate zero-interest loan. The amount you receive is determined by your income and household size.

The HPAP loan must be repaid when you sell your home, no longer live in the home as your primary residence or refinance your first mortgage. Depending on your income level, here’s how repayment works:

  • Moderate income: Payments are deferred for five years, then amortized over 40 years.
  • Low income: No payments are due unless you move out or sell the home or refinance.

There’s also up to $4,000 in closing cost assistance available for eligible households through this program.

To qualify, you must be the head of the household; have very low-to-moderate income, as defined by the program; and have a “good credit rating,” according to the agency. In addition, the home you’re buying must be your primary residence and located within the District.

Note that HPAP loans are prioritized for low-income, elderly, handicapped, disabled or displaced borrowers, and borrowers who either already live in the District or who’ve worked in the District for at least a year.

Other Washington, D.C. homebuyer assistance programs

Mortgage credit certificate (MCC)

Through the DCHFA, you can apply for a mortgage credit certificate (MCC) along with your agency mortgage that can help you save money on your tax bill. In Washington, D.C., an MCC provides a tax credit of up to 20 percent of your annual mortgage interest. To be eligible for the credit, you must be a first-time homebuyer, a veteran or purchasing a home in a targeted area.

Other first-time homebuyer loan programs

In addition to DCFHA programs, Washington, D.C. residents might be eligible for other widely-available first-time homebuyer programs, such as FHA, VA and USDA loans, that can make it more manageable to buy a home even if you don’t have a 20 percent down payment. Government-backed programs like these can also be easier to qualify for than other mortgages, and many mortgage lenders offer them

Some first-time buyer programs might include grants, down payment or closing cost assistance, deferred payments, subsidized interest rates or loan forgiveness after a certain period of time, as well, which can further save you money.

Get started

If you’re interested in learning more about Washington, D.C. first-time homebuyer programs, you can find more details through the District of Columbia Housing Finance Agency. The agency has a directory of mortgage lenders who can help you start the homebuying process and determine what assistance you might be eligible for.

As you embark on your first home purchase in Washington, D.C., be sure to check the latest mortgage rates and compare available home loan options from a variety of lenders. This can help ensure you get the best mortgage for the lowest cost.