DC Open Doors was created by the District of Colombia Housing Finance Agency (DCHFA) to stimulate and expand homeownership opportunities by offering funds for affordable first trust mortgage loans and down payment assistance, both which lower the overall cost of a home purchase.

DC Open Doors offers three mortgage products through their participating lenders: Down Payment Assistance Loan (DPAL), half price mortgage insurance for conventional loans, and a mortgage credit certificate.

Tell me more…

The borrower may use the deferred/forgivable DPAL toward their applicable down payment, closing costs, or prepaid expenses. Eligible borrowers may borrow up to 3% of the purchase price for conventional loans or 3.5% of the purchase price for FHA Loans. The DPAL is a non-amortizing (so you are not required to make monthly payments on it), 0% interest, fully forgivable loan (FREE MONEY). The loan is forgiven 20% per year until fully forgiven after the fifth year. This program is not for really expensive homes, you are limited to a loan amount of $417,000 from your mortgage lender.

What’s the catch…

Your mortgage lender will charge you an additional 1% interest on your mortgage. For some, this trade-off is a no brainer. The loan (or any portion not yet forgiven) is only repayable if you sell or refinance your home, or if you no longer occupy it as your primary residence.

Am I eligible…

To qualify, applicants need to have a credit score of 640 or higher and a maximum debt-to-income ratio of 45 percent. The maximum income for a borrower is $131,040. Borrowers are not required to be first-time homebuyers but they may not own other property at the time of closing. You DO NOT have to currently live in Washington, D.C. Eligible borrowers can apply with a participating lender by completing a standard mortgage loan application.

Give me the numbers…

FHA loans require a minimum down payment of 3.5%. So if you purchase a $400,000 home with an FHA loan at an interest rate of 3.75%, you would need $14,000 as a down payment. DC Open Doors will cover your downpayment of $14,000 and your interest rate will increase by about 1% to 4.75%. You move into your new home with no money down. There are other closing costs associated with purchasing a home but there are strategies and scenarios where you can have the seller pay for most of the closing costs.

If you are just starting the process of looking for a home, feel free to e-mail me at dwalcott@kw.com.




Disclaimer: All information provided is deemed reliable, but is not guaranteed and should be independently verified.