First-time homebuyers who are pondering their financing options may want to consider grants or loans from the city, county or state where they live or work. Local governments are offering assistance with down payments and closing costs to eligible buyers at competitive rates and terms, often with little or no down payment required. Most programs define first-time buyers not only as those who have never owned a home, but also those who have not owned or co-owned a home for three years. Qualifications and terms of affordable housing incentives vary by program and jurisdiction, so applicants should contact program administrators for details. Typical qualifications include the buyer’s household income and size, credit rating, place of residency or work, debt-to-income ratio, occupancy of the home as a principal residence, and liquid assets committed toward the purchase. Some programs have restrictive covenants. Homebuyer and financial counseling is available and is mandatory in some programs. Separate incentives exist for government employees or affiliates, such as public school or transportation workers; in some cases, the employee does not have to be a first-time homeowner.
While most local programs target low- to moderate-income buyers, some people mistakenly assume they earn too much to qualify, said Douglas Myrick, a staff member of Arlington County’s Home Ownership Program. “Families tend to apply, but young couples or young professionals may not make that call.” Myrick cited Virginia Housing Development Authority’s metro-area maximum income for a household of one to two, which is $97,500; for three or more, it’s $112,950. The sales price limit for either is $450,000. “Would a single making $90,000 call me?” he asked. “Probably not. And they’ll pay from 0.5 percent to 1 percent higher.”
Maryland Mortgage Program executive Vicky Grim encourages those on the fence to apply. “I always encourage people to get prequalified early, to know if there are obstacles, get a credit report. Get to one of our approved lenders even if you think you’re not ready for another year. You might be surprised.”
Local programs
DISTRICT OF COLUMBIA
IRS Taxpayer Assistance Center
500 N. Capitol St. NW
Telephone: 800-829-1040
First-Time Homebuyer Federal Tax Credit: The credit offers from $2,500 (if married and filing separately) to $5,000 for a home in the District purchased during the tax year by Dec. 31, 2011. Income and previous home ownership restrictions apply.
Department of Housing and Community Development
Telephone: 202-442-7200
Website: dhcd.dc.gov
Home Purchase Assistance Program: Provides interest-free loans of up to $40,000 for down payments and an additional $4,000 toward closing costs. The loan is deferred for the first five years and amortized over 40 years. Most recipients contribute $500 or a percentage of liquid assets. One option allows buyers to purchase homes that require repairs with a combined $5,000 to $35,000 loan from the first trust lender, and a Home Purchase Assistance second trust loan toward down payment and closing costs.
Employer Assisted Housing Program: District government employees who are first-time homebuyers may be eligible for matching down payment funds of up to $1,500 and a deferred loan of up to $10,000. The separate Negotiated Employee Assistance Home Purchase Program offers grants from $3,000 to $26,500 to District government employees covered by certain collective bargaining agreements.
Home Purchase Assistance Program Enhancement, Neighborhood Stabilization Program 2: Revitalizes neighborhoods hit by foreclosures and vacant properties. Down payment assistance of up to $77,000 including closing costs is offered in Deanwood, Ivy City/Trinidad and Historic Anacostia on a first-come, first-served basis.
For more information on these programs:
Lydia’s House: 202-373-1050; lydiashousendc.org/OurPrograms/OurPrograms.htm#ChangingNeighborhoods
Latino Economic Development Corp.: 202-588-5102; ledcmetro.org/en/homeownership
Manna Inc.: 202-832-1845, mannadc.org/template/index.cfm
University Legal Services: 202-547-4747 or 202-396-1201 (Northeast); 202-889-2196 (Southeast); uls-dc.org/About_ULS-HCP.htm
Housing Counseling Services 202-667-7006; housingetc.org/
MARYLAND
Community Development Administration, Maryland Department of Housing & Community Development
Telephone: 410-514-7000 or 800-756-0119
Website: mdhousing.org
Maryland Mortgage Program
Telephone: 800-638-7781
Web site: mmprogram.org
Down Payment and Settlement Expense Loan Program: Buyers approved for a CDA first mortgage loan through the Maryland Mortgage Program may apply through participating lenders. The 30-year, no-interest, deferred loans of up to $5,000 are repayable when the house is refinanced, sold or transferred. There is no minimum borrower contribution.
Partner Match Programs match funds offered by employers, builders and developers, and others for additional assistance to DSELP loans for buyers approved through the MMP.
House Keys 4 Employees: DHCD will match contributions from participating employers for up to $2,500 as a no-interest, deferred loan. The new Smart Keys for Employees enhancement to House Keys 4 Employees provides an additional $1,000 if the property is in a priority funding area and is within 10 miles of the borrower’s employment or within county boundaries.
Builder/Developer Incentive Program: For eligible buyers, the MMP will match contributions from participating builders and developers for up to $2,500 on no-interest, deferred loans.
Community Partner Incentive Program: Eligible borrowers who receive contributions from a community partner can get matching funds of up to $2,500.
For more information: 800-638-7781; mmprogram.org/downpayment.aspx
For additional resources: mmprogram.org/counseling.aspx
MONTGOMERY COUNTY
Housing Opportunities Commission
Phone: 301-929-6700
Website: hocmc.org
First Trust Mortgage Purchase Program: Provides a 30-year, fixed-rate interest of 4.5 percent on first-mortgage financing for homes in Montgomery County. Maximum sales price: $429,619. Call 240-773-9200 for more information.
Revolving Closing Cost Assistance Loan Program: Offers closing cost assistance to qualified buyers at a 5 percent interest rate for 5 percent of the closing and/or down payment costs up to $10,000. Maximum sales price: $429,619. At least one borrower must work in Montgomery County.
Montgomery County Employees Closing Cost Assistance: Montgomery County has registered as an employer with the state’s House Keys 4 Employees to offer employees of all agencies listed in the county budget the opportunity to receive additional assistance through gifts or loans toward the purchase of a first home in Montgomery County using a state mortgage. Call 240-773-9200 or 240-773-9195, or visit hocmc.org/housing/mortfin/MortFin-Homeown.asp.
Note: Closed waiting lists on the commission’s home page may refer to rentals, not purchases for first-time buyers.
CITY OF ROCKVILLE
Department of Community Planning and Development Services
Telephone: 240-314-8200
One- and two-bedroom condominiums are available under the city’s Moderately Priced Dwelling Units program. An income of more than $22,000 is usually required and there are income limits that vary depending on the size of the family. Townhouses may become available in the future for families with children.
R.E.A.C.H., a joint loan program between the city and the nonprofit organization Housing & Community Initiatives Inc., offers a no-interest loan for down payment and closing costs of up to $12,000 to be repaid over seven years. Applicants must live or work in Rockville. Call 301-590-2765 or visit hcii.org/Reach.html.
PRINCE GEORGE’S COUNTY
Department of Housing and Community Development
Phone: 301-883-4663
Website: co.pg.md.us/government/agencyindex/hcd
My Home Program: With the help of this new program initiated in early March, the county hopes to purchase at least 75 homes in the county for resale, said Acting Director Eric Brown. The county is offering qualified buyers no-interest, deferred loans for up to 5 percent of the purchase price for a 10-year term. Buyers must contribute 1.75 percent of the purchase price or 50 percent of liquid assets over $3,000. Homeowners do not have to repay the loan if the property is their primary residence for 10 years. “To get at least 75 families in homes would be wonderful, especially in this economy,” Brown said.
For more information: Call 301-883-5456 or visit princesgeorgescountymd.gov/MyHOME.
Housing Choice Voucher Homeownership Program: This locally administered HUD program converts a voucher subsidy for rentals to home purchases for first-time buyers. The amount is based on income. The minimum income requirement is $30,000.
The American Dream Payment Initiative is no longer available.
More resources:
Latino Economic Development Corp.: 240-777-4960
Asian-American Homeownership Counseling Inc.: 301-760-7636; http://aa-hc.org/?page_id=114
VIRGINIA
Virginia Housing Development Authority
Telephone: 877-843-2123; loans: 800-227-8432
Website: vhda.com/Homebuyers/VHDAHomeLoans/Pages/VHDAHomeLoans.aspx
The quasi-governmental, mortgage-financing agency has committed financing to local governments to increase affordable housing by providing low-interest loans for eligible first-time buyers. The VHDA provides these loans through designated lenders. Some loans do not require a down payment. All loans have maximum income, sales-price and/or loan limits, which may vary by jurisdiction.
Conventional fixed loans: Provide 30-year, low fixed-rate loans and low fixed monthly payments for up to 97 percent of the sales price or appraised value.
Federal Housing Administration loans: Eligible buyers access FHA-insured, low down payments and low 30-year fixed interest rates.
FHA-Plus loans: Offers a low, 30-year fixed interest rate on both the first and second mortgages. Buyers must have cash available for 1 percent of the purchase price. Buyers receive an FHA-insured first mortgage plus a second mortgage to help fund down payment and closing costs at 3.5 percent to 5 percent of the sales price.
VA loans: Offers a low fixed interest rate, zero down payment and low fixed monthly payments.
SPARC and HomeStride are no longer available.
ALEXANDRIA
Office of Housing
Phone: 703-746-4990
Website: http://alexandriava.gov/housing/info/default.aspx?id=361
Email: [email protected]
Federal Home Loan Banks’ Affordable Housing Program: Offers a $7,500 grant that is forgiven after five years for eligible buyers. The grant may be used toward the FHA down payment requirement. Borrowers contribute at least $1,500. Apply through a participating lender, or ask your lender if he participates. Lenders may use various names for these grants, so mention the Federal Home Loan Banks when inquiring.
Moderate Income Homeownership: Provides no-interest, 99-year deferred-payment financing of up to $30,000 for income-qualified applicants who have lived or worked in Alexandria for at least six months. The property price limit is $399,600. Purchasers must contribute at least $3,000. Check with the city, as availability may change. Additional assistance is available to police officers and sheriff’s deputies who purchase in designated locations in the city. Call 703-746-4990.
Employee Homeownership Incentives Program: A $10,000 no-interest, deferred loan is available to city and public school employees.
The Homeownership Assistance Program: Provides first-time homebuyers who live or work in Alexandria second-trust, deferred payment loans of up to $50,000 for principal and interest write-downs, down payment assistance and settlement costs. Purchasers must contribute $2,000 or more of their own funds. Property purchase-price limit is $362,790
ARLINGTON COUNTY
Community Planning, Housing and Development
Phone: 703-228-3765
Website: arlingtonva.us/departments/CPHD/housing/CPHDHousingHousingDivision.aspx
Moderate Income Purchase Assistance: Loans of up to $90,700 are available. Applicants are no longer selected by lottery but on a first-come, first-served basis until funds are depleted. Provides up to 25 percent of the purchase price of a home on the market or an Affordable Dwelling Unit as a 30-year, deferred, no-interest, second-trust loan. The maximum purchase price is $362,790, with a down payment of at least 1 percent. When the property is sold or refinanced, the homeowner must repay the original loan plus a share of the net appreciation of the property. For ADUs, appreciation is based on area median income.
Live Near Your Work: The county offers public school employees who work at least 30 hours a week a taxable but forgivable loan of 1 percent of the purchase price to a maximum of $5,000. The loan is forgiven over three years as long as the home is owner-occupied and the buyer remains employed by the school system.
The Homestride Program: Provides $20,000 toward down payment and closing costs to assist employees of Arlington County, Arlington Public Schools, George Mason University and Virginia Hospital Center. Must be used in conjunction with a VHDA first trust mortgage.
The county’s Fannie Mae and Freddie Mac loans occasionally offer enhanced underwriting features for police, teachers, nurses, members of the military and other first responders.
Applicants do not have to have lived or worked previously in Arlington County.
FAIRFAX CITY
The City of Fairfax does not offer first-time homebuyer assistance. Residents may apply for properties offered by Fairfax County, but they will not get the preference offered to Fairfax County residents.
FAIRFAX COUNTY
Department of Housing and Community Development
Phone: 703-246-5100
Website: fairfaxcounty.gov/rha/homeownership
First-Time Homebuyers Program: This component of the Affordable Dwelling Units Program offers townhomes and condominiums from $78,000 to $170,000. Preference points are given to those who live or work in Fairfax County or have at least one child younger than 18. Restrictive covenants apply.
Other resources:
Housing and Community Services of Northern Virginia: 703-372-5440; http://hcsnv.org/services.asp
Reston Interfaith Partnership for Permanent Housing: 571-323-9555; Restoninterfaith.org
CITY OF FALLS CHURCH
Housing and Human Services Division
Telephone: 703-248-5005
Website: fallschurchva.gov/Content/Government/Departments/CommunityServices/HHS/HousingSvcs.aspx?cnlid=2267
Down Payment and Closing Cost Assistance: Offers a deferred, no-interest, second mortgage loan of up to $20,000 for homes on the market or Affordable Dwelling Units in Falls Church city. Liquid assets should not exceed $30,000. The loan is repaid when the home is sold. Buyer should contact a VHDA mortgage lender.
Affordable Dwelling Unit: Resales of single-family homes or condos are available to qualified, low- and moderate-income applicants on a rolling lottery basis. Applicants must apply first to get on the certified buyers’ list. Loans must be pre-approved. Resale is restricted to 15 to 30 years. Households cannot have more than $30,000 in total liquid assets.
LOUDOUN COUNTY
Loudoun County Department of Family Services: Housing
Phone: 703-737-8043
Website: loudoun.gov/housing
Affordable Dwelling Unit Program: Provides newly constructed or resale townhouses or condominiums priced from $120,000 to $180,000 for income-eligible residents who live or work in the county. Total household income must be more than 30 percent and less than 70 percent (65 percent for condominiums) of the area median income. Subject to restrictive covenants. For more information: loudoun.gov/Default.aspx?tabid=2119
Down Payment/Closing Cost Assistance: First-time homebuyers purchasing an Affordable Dwelling Unit or other home can borrow up to 10 percent of the sales price, or $25,000, whichever is less, at 5 percent interest. This second-trust loan is payable over 30 years, with the first three years deferred and interest free. Funding is available on a first-come, first-served basis. Applicants must have lived and/or worked in Loudoun County for at least six months. For more information: 703-777-0353; loudoun.gov/Default.aspx?tabid=2120
Public Employee Homeownership Grant: Offers a secured, forgivable loan to full- or part-time Loudoun County government and public school employees, whether or not they are first-time homebuyers. Loans are forgivable at 20 percent of the amount annually over five years, providing the buyer does not leave employment or sell or cease to occupy the home. There are no monthly payments. Although technically a forgivable loan, the product is called a grant because it does not have to paid back as long as the buyer meets the conditions.
PRINCE WILLIAM COUNTY
Office of Housing and Community Development
Telephone: 703-792-7530
Website: pwcgov.org/housing
Housing Choice Voucher Home Ownership Program: Assists participating and prequalified Home Choice Voucher rental-program participants buy a home in Prince William County with vouchers. Assistance is for up to 25 years for a mortgage of 20 or more years, or 10 years for a mortgage of less than 20 years. Qualified buyers must satisfy employment requirements and have a household income of at least $40,000. Credit and ownership counseling are required. Buyers are responsible for 3 percent of the contract price. Applications for the rental program portion of this program are not being accepted at this time.
Homeownership Assistance Program: The county is no longer accepting applications for this program. New applications will be available in September, subject to funding. County staff recommends that prospective first-time buyers get prequalified and apply in September.
Neighborhood Housing Rehabilitation Program: Provides assistance to repair housing including making homes more energy efficient and accessible. Income limits apply.
