Next Saturday, developer EYA will release 11 townhomes in Capitol Quarter for sale under a unique workforce financing program co-managed by the DC government. Capitol Quarter is a new townhome development in Capitol Riverfront, and this financing program could present a good opportunity for buyers interested in living in the young neighborhood.
The program allows buyers to use $150,000 provided by the DC government as a second trust toward the purchase of one of the homes, effectively discounting the market-rate cost by that considerable amount. The second trust is essentially a zero-interest mortgage that must be paid back in full to the District when the home is sold or after 30 years. In the meantime, the mortgage requires no intermediate payments.
For example, one of the homes that will be released is called The Farragut. It’s a three-floor, two-bedroom townhome with one and a half bathrooms and a rear yard. The market price for The Farragut is $470,000 but through this program a buyer would acquire it for $320,000, with DC Housing Authority (DCHA) putting up the difference. The buyer would only need to get a mortgage for their $320,000 piece, not the full $470,000.
The 11 units due for release range in size from 1,100 to 1,300 square feet and all have either two or three bedrooms. EYA’s AJ Jackson told UrbanTurf that the differences between the workforce homes and the market-rate homes is only minor. “The differences are with the finishes and cosmetic features,” he explained. “The exterior features are all the same.” The homes are under construction now and will deliver next year.
There are restrictions for eligibility in the program but they’re far less onerous than those of other affordable housing programs in the area. The primary restriction is that a buyer’s household income fall between 80 and 115 percent of the Washington area’s median income — $82,800 to $119,025 in dollar terms. It doesn’t matter if the buyer is single or married; so long as the total household income falls within that range, the requirement is met. The home must also be owner occupied and a primary residence. Notably, the buyer does not have to be a current DC resident nor a first-time home buyer.
Also note that the home itself is not designated “workforce” in perpetuity, limiting the buyer to resell it only to other workforce buyers. Once the home is purchased, there are no future restrictions other than to pay the $150,000 back to DC. That also means that the buyer will enjoy 100 percent of any appreciation in the home’s value. (Contrast that to other programs in which the buyer can only keep a portion of the appreciation.)
To be certified as eligible, prospective buyers need to submit proof of income and other paperwork at the EYA sales office no later than this Sunday, March 20th. The following Saturday the 26th, EYA will hold a lottery to draw names from among the eligible applicants. EYA’s Jackson told UrbanTurf that the last lottery had about 60 applicants for 10 homes, so demand to participate in the program is typically strong. For all the information about the requirements and process, see 2011 Capitol Quarter Workforce Financing Program.
It is important to reiterate that these homes are not the same as the District’s more widely-known affordable housing units that are set aside in new condo projects. This is a one-of-a-kind program that was conceived by DCHA, EYA, HUD, and others as part of the master plan to redevelop the Capitol Riverfront into a mixed-income community. For the right buyer, this could be the opportunity to live in a new townhome in the city for $150,000 less than it would otherwise cost.
This article originally published at https://dc.urbanturf.com/articles/blog/opportunity_to_buy_at_a_discount_in_capitol_riverfront/3179.
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