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: the median home value is over $612,000, according to Redfin — nearly double the national median price. And the suburbs aren’t any better: Fairfax County home prices are up 11 percent year-over-year, to $666,000.

To help first-time homebuyers, the District of Columbia Housing Finance Agency (DCHFA) 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 programs

DCHFA DC Open Doors program

You don’t necessarily have to be a first-time homebuyer to apply for the DCHFA’s 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 $199,200 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 $726,200. Residents and non-residents are welcome to apply, but you’ll need to purchase a home in D.C. to get funding.

Interested in this program? Contact a participating lender to begin the application process.

DCHFA DC4ME program

Government employees buying their first home (or, at least, their first home in the last three years) 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 $199,200 in household income
  • No more than $565,300 home purchase price

You must also complete a homebuyer education class.

For more information, visit the DC4ME program website.

Washington, D.C. down payment assistance

The Open Doors and DC4ME loan programs come with down payment assistance, as mentioned above. Here are some other options.

DCHFA Home Purchase Assistance Program (HPAP)

DCHFA’s Home Purchase Assistance Program (HPAP) provides first-time homebuyers with up to $202,000 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 and very 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. You must also contribute at least $500 toward the purchase.

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. Contact a community-based organization (CBO) to apply.

As of January 11, 2024, all available funds for the Home Purchase Assistance Program (HPAP) have been reserved. Not until October, the start of the new fiscal year, will new funding be available.  But keep checking the website for updates.

Department of Housing and Community Development (DHCD) Employer-Assisted Housing Program (EAHP)

Under this program, eligible government employees can receive up to $5,000 in matching down payment funds, as well as a deferred loan of up to $20,000. First responders and educators may qualify for extra assistance, including first-time homebuyer grants in Washington, D.C.

To qualify, you must:

  • Be an employee of a Washington, D.C. government agency (including public schools and public charter schools)
  • Have been employed in good standing for at least one year (waived for first responders and educators)
  • Have not owned a primary residence in D.C. in the past three years
  • Attend an orientation and eight-hour training course

You can apply for the EAHP through one of these CBOs.

Other Washington, D.C. first-time homebuyer loans

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. Here’s a quick overview of each program:

  • FHA loans: This kind of mortgage is insured by the Federal Housing Administration (FHA). It comes with a minimum down payment requirement of 3.5 percent (for credit scores of 580 or higher) or 10 percent (for scores between 500 and 579).
  • VA loans: Open to active-duty military members, veterans and their surviving spouses, these loans are guaranteed by the U.S. Department of Veterans Affairs (VA). No down payment is required with a VA loan – and they often come with lower rates, too.
  • USDA loans: Created by the U.S. Department of Agriculture (USDA), these no-down-payment mortgages are available to low- and moderate-income buyers who purchase homes in USDA-approved rural areas. Washington, D.C. isn’t one of those areas, but parts of Maryland and Virginia are.

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 enter the housing market 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.