The Department of Housing and Community Development (DHCD) has introduced a new pilot program that will allow first-time home buyers to purchase homes that are in need of limited repairs using FHA’s 203(k) loan program in conjunction with DC’s Home Purchase Assistance Program (HPAP) program. Eligible home repairs include everything from structural work and plumbing and electrical work to painting, weatherization, basement finishing and other cosmetic finishes.
HPAP provides interest-free loans and closing cost assistance to low to moderate-income applicants in DC. The loan amount is based on a combination of factors, including income, household size, and the amount of assets that each applicant must commit toward a property’s purchase. Eligible applicants can receive a maximum of $40,000 in down payment assistance and an additional $4,000 in closing cost assistance. The HPAP zero-percent interest loan is deferred for the first five years and amortized over 40 years. The 203(k) loan is essentially a home improvement loan, but applicants must meet a list of requirements before taking advantage of it.
The new pilot program, which began on October 1st, gives first-time buyers in DC the option to purchase properties that require a little repair in order to fix health and safety concerns or building code violations. It provides loans via the Federal Housing Administration’s (FHA) 203(k) Streamlined Rehabilitation Program as a first trust lending product, in conjunction with an HPAP or other DC purchase assistance second trust loan. The 203(k) Rehabilitation Program provides a loan amount between $5,000 and $35,000 for repairs and DC’s HPAP program acts as a second trust loan for down payments and closing cost assistance. The Greater Washington Urban League is administering the new program in conjunction with HPAP. The applicant must apply for HPAP with a Community Based Organization and attend general HPAP training. The applicant must also attend a separate mandatory 203(k) streamline class.
Interested homebuyers should contact a housing manager at DHCD at 202-442-7200 for more information to get started.
This article originally published at https://dc.urbanturf.com/articles/blog/dcs_home_purchase_rehabilitation_program/2601.
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