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The Pursuit: A Home For 50% Off

by Shilpi Paul

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Christina Brown and her daughter.

Christina Brown had been growing frustrated by her housing search.

The DC public school teacher was eager to move out of her Columbia Heights one-bedroom and into a house that had a yard for her 20-month old daughter. However, like many people in today’s market, Brown found that her options on a single salary were limited in DC’s current housing market.

“With prices so high, I wasn’t really finding the home that I wanted,” Brown told UrbanTurf.

So, Brown started looking for help. This spring, she applied for down payment assistance through the city’s Housing Purchase Assistance Program (HPAP) and, while looking through the paperwork, noticed an insert: an application and information for a lottery being held by DC’s Department of Housing and Community Development (DHCD). DHCD was selecting two entrants to purchase a newly renovated home in the city at 50 percent of the appraised value. Not thinking too much about her chances, Brown sent in the application and got back to her search.

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Christina Brown’s new home.

The lottery was not for all homebuyers. Entrants needed to be families of two or more who are first-time buyers in DC, and make less than 50 percent of the area median income. They also needed to obtain a lender’s pre-approval letter for 50 percent of the appraised value of the house (in this case $190,000).

On June 1st, Brown was invited to the attend the drawing. She wavered on going, deciding only at the last minute to make the trip.

At the event, hundreds of entrant names were tossed into a golden barrel, which was then spun around. Mayor Gray was on hand to pick the first winner. It was Brown.

“He pulled my name, and pandemonium broke loose,” she remembers. In shock, Brown fell to the ground for a few minutes, until another audience member pulled her off the floor. She then picked up her daughter and made her way to the stage.

“I walked up to Mayor Gray and he gave me this big plastic key, and said ‘Do you want to say anything?’” recalls Brown. “I shook my head and cried on his shoulder for five minutes.”

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The living room of the new home.

The home that Brown won is a three-bedroom rowhouse in Eckington. Newly renovated, the home has a front porch, a parking pad in the back and most importantly to Brown, a yard. In addition to three bedrooms, the home also has a sunroom, living room, dining room, and a basement that has been hooked up with plumbing for a potential renovation.

At the full appraised price (almost $400,000), the home would have been out of Brown’s price range, but at 50 percent off, it is well within her budget. Now that the shock has worn off, Brown is in the process of applying for a mortgage and reading into the details of the sale. (The financing works just like the purchase of any other home.)

“I’m still kind of thinking ‘Is this too good to be true?’” she admitted.

There is one condition with the sale: Brown must live in the home, as her primary residence, for at least 10 years. That fits in with her plans, though; she sees her daughter growing up in their new place for years to come.

“She needs that space to be able to run through the house, and run outside,” believes Brown. “It’s an extreme relief.”

Photos courtesy of Mouse on House.

See other articles related to: the pursuit

This article originally published at http://dc.urbanturf.com/articles/blog/the_pursuit_a_helping_hand_from_the_city/7257

16 Comments

  1. makeba said at 1:58 pm on Tuesday July 2, 2013:

    Good for her! And she has an end-unit! Nice

  1. Diana said at 2:00 pm on Tuesday July 2, 2013:

    Such a nice story. Go Christina!

  1. mona said at 2:03 pm on Tuesday July 2, 2013:

    wonderful story and good for her to have this opportunity.

  1. C said at 2:33 pm on Tuesday July 2, 2013:

    What a great story to read today - or any day.  Congratulations, Christina!  I hope you and your daughter have many happy years in your new home.

    So glad you published this story - it made my day.

  1. anon said at 2:37 pm on Tuesday July 2, 2013:

    I am truly happy for this woman. I do wish there were programs out there to help those of us who do not have children yet are teachers, EMTs, paralegals, secretaries, etc. that don’t make six-figure salaries, but make too much to qualify to enter a contest for a house at half price. Truly stuck in a 1-bedroom in the middle.

  1. Carl said at 3:17 pm on Tuesday July 2, 2013:

    Yep, that’s what it takes to buy a SFH in DC these days…a lottery (aka a miracle).

  1. saladman8283 said at 3:43 pm on Tuesday July 2, 2013:

    Not to be a skunk at this picnic, but why is it good public policy for the DC government to be raffling off half-priced houses for people who could otherwise not afford them, paid for courtesy of other DC taxpayers?  Will this new homeowner get a 1099 for the windfall she received?  Will she be able to keep up with the property taxes (or is there a break on those as well)?  And, what happens if she doesn’t live in the home for 10 years?

  1. RC said at 3:53 pm on Tuesday July 2, 2013:

    The 1099 is an interesting question.  That strikes me as income, for sure, and well above the $14,000 exclusion for gifts.

    Still—really cool story.

  1. Zesty said at 10:28 am on Wednesday July 3, 2013:

    @Saladman, You’re just jealous. People like you don’t complain when the city is giving out Billions of Dollars in Tax abatements “courtesy of other DC taxpayers” to add to the bottom line of developers but you’re complaining about thousands of dollars being spent for a good cause. In your book, corporate welfare is okay but charitable welfare is the devils work. You have misplaced priorities.

  1. Zesty said at 10:32 am on Wednesday July 3, 2013:

    @RC, there is no income here. Nothing additional to report on 1099. If the city sells the house below market value, it’s just as any other sale. I could sell my house for $10 tomorrow; the person who buys my house does not have any “income” to report as opposed to someone who buys my house for $500k. Your question would apply in a short sale situation where something is owed on the home; this is not the case.

  1. C said at 10:44 am on Wednesday July 3, 2013:

    Zesty, curious - what does the city get for doing this?  Is there some benefit or write-off for city government?  Most people/agencies need some incentive, as there are very few people/agencies who are/can be truly philanthropic without some sort of personal gain.

  1. Mr. and Mrs. Tax said at 10:47 am on Wednesday July 3, 2013:

    This is going to sound crazy, I know, but it just might be possible that Zesty is not be a tax lawyer or accountant.  So, while taking tax advice from anonymous commentators on the internet is generally a safe strategy, I would probably not take tax advice from Zesty.

    “If the city sells the house below market value, it’s just as any other sale.” 
    Hmmmmmmm . . . .

  1. Zesty said at 10:58 am on Wednesday July 3, 2013:

    @C, The city is able to help level the playing field for low income/hard-working residents that have been priced out of the DC market (the DHCD states that their purpose is “Fair Housing”). I find it laughable that you are scrutinizing $200k in when they just give $50MM to NoMa for a park! What does the city get out of a park when there could have been condos built generating tax revenue. So $50MM plus lost tax revenue but you’re concerned about the city spending 200k. You guys must have worked on Mitt Romney’s campaign

  1. Zesty said at 11:06 am on Wednesday July 3, 2013:

    @Mr. and Mrs Tax, While I do work in accounting/finance; my comments should NOT be taken as professional advice….to the best of my knowledge, I do not believe there are any tax implications for an arms length buyer. From my understanding, the gift tax would apply for non arms-length transactions (selling to family member)....But as Mr. and Mrs. Tax stated, please consult a Tax Attorney or CPA for a definitive answer. Thanks.

  1. C said at 11:45 am on Wednesday July 3, 2013:

    Zesty, thanks for most of your reply.  It was just a question that came from reading other comments who talked about this story as a charitable cause, which made me think of philanthropy/philanthropic causes.  While philanthropy can be great, there are often write-offs associated with it, so you can either say that the charitable cause that someone or an agency participates in is either great or less great, once you also know that some sort of incentive also exists.  I’m sorry if you missed my original comment to this story, where you will see that I think it’s a great story and wasn’t thinking about tax issues, politics or anything else sinister - just impressed by the humanity of what happened.

  1. Mr. and Mrs. Tax said at 6:23 pm on Wednesday July 3, 2013:

    Zesty, your understanding is a little facile, and you do not know what you are talking about.

    There is no reason to believe the IRS would view this as an arms length transaction, but even if they did, there’s this little thing called the prizes & awards tax.

    Maybe just admit you don’t know what you are talking about at all?

    Here, I will give you a positive role model:

    Despite our name, Mr. and Mrs. Tax have no idea whether this transaction would be subject to income tax, and our opinion on the subject is not worth a box of doughnuts.

    And that’s saying something, because a box of doughnuts might be worth less than you think:

    http://www.forbes.com/sites/robertwood/2012/12/11/all-prizes-trigger-taxes-and-you-cant-pay-irs-in-doughnuts/

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