Navigating DC’s perks for homebuyers

Today I attended an orientation session at the Latino Economic Development Center — a HUD-certified housing counseling agency that helps people navigate and access the programs available to them to buy a home in DC (and it’s conveniently located in Shaw!). See full list of HUD-certified housing counseling agencies here!

And today I’m apprehensive. I realized that I’ve been getting two different DC home purchase assistance programs confused. For example, I understood that the Home Purchase Assistance Program (HPAP) loan was forgiven after five years — 20% forgiven each year that you remain in the house. But now I realize that there’s a difference between HPAP and the DC Open Doors program. For HPAP, you actually do have to pay it back; the loan is just deferred for five years. Which is sort of odd because HPAP is supposed to help lower income households.

DC Open Doors targets young professionals. The income requirements are a bit higher — $123,050 for a single person (even if you’re married to someone who’s making more!). According to the site, “[t]here are no purchase limits on the home you’re looking to buy, but there is a $417,000 loan limit.” So if I’m reading everything correctly then a single, childless adult making $62,000 would be eligible for $20,000 in down payment assistance from HPAP (loan repayments starting after five years is up) AND a 3.5% loan towards the down payment through DC Open Doors — fully forgiven in five years.

There are three other programs and perks that DC’s prospective homebuyers should know about:

  1. FHA 203K Program: I mentioned in my last post that this program offers up to $35K to make repairs or improvements on a newly purchased home. Perty sweet.
  2. Tax Abatement Program: No property tax for five years as long as (a) the property cost less than $367,200 and (b) household income is under $56,100 for a single adult or under $64,080 for two. The catch? I learned at today’s orientation that your tax can change if your income changes! It’s not a huge catch, but it’s good to be aware.
  3. Homestead Exemption: I have no idea what this is or how it works, but I feel like you should know about it.

There may or may not also be a first-time homebuyer tax credit of $5,000 for single adults and $2,500 for couples, but it’s confusing because it went away and then it may have come back.

On top of all that, pizza is half price today!

While the programs are really attractive, I keep thinking to myself: I’m still going to be stuck with cray monthly payments that I won’t be able to afford until September 2017. Right now, I spend more than I pay in rent on childcare costs. When Max starts school at age three, those costs (literally like $20,000 per year!!!) disappear. I haven’t met with a housing counselor yet, so maybe there’s a way to keep monthly payments low for the first year and a half. I’m confident that I’ll have a lot more money in 2018.

Nonetheless, there are a lot of ways I can cut my spending and boost my savings efforts, regardless of whether these savings go toward a house, a graduate degree, paying off undergraduate student loans, saving for retirement or Max’s college tuition, or even a new Move to Hawaii fund (where I can also take advantage of first-time homebuyer benefits).

Today I opened an account with Mint.com — which I found is even better than Quizzle. The best thing about Mint.com is that it allows you to pay all of your bills in one single place. The main reason I’m late on payments to rando accounts like my Macy’s credit card or my Comcast bill (besides the fact that I’m usually arguing with Comcast for charging me for a TV every month when I DON’T HAVE A TV) is because I forget my passwords and it’s a huge hassle for me to reset 80 passwords every single month (I’d prefer to only reset two — my payroll account password and my Mint.com password). Mint will also help you see your credit score and offer tips to rebuild your credit.

The next step after my homebuying orientation today is a housing counseling session at LECD, but since I have access to my credit report and know what I want to do to rebuild it (e.g. consolidating my loans, decrease my spending), the counselor advised me to wait a month before I schedule it so we can see together where my credit is after my quick fixes have been implemented. That means that over the next month I’ll just be reading up on homebuying, stepping up my couponing skills, and spending another 45 minutes on the phone with Comcast during which I threaten to cancel my service and they promise to credit me for all those TV charges (again).

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