Buying One’s Home: Thanks Mom and Dad

The New York Times has a great article on those who saved up and sacrificed much to purchase a home without the help of their parents. There were stories of those living off a single $2.95 chicken sandwich a day for years. Now, I’ll say right off, my parents were kind enough to help me on the down payment of my own home here in Petworth. And I am ever grateful for their help. But just for the record, my parents are hardworking retired civil servants not hedge fund managers. Well, I happened upon an interesting debate up in NYC over at the Brownstoner blog where there are lots of interesting comments. So, should we laugh at those who needed mommy and daddy’s help in purchasing a home in DC (P.o.P. included). Or is it great that the folks could help out? What are the stories here in DC? Were you able to purchase your home by sacrifice and savings or did you rely on outside help or are those two choices even mutually exclusive? Whenever a guest comes to my home and compliments my house, I always say, “the purchase of this house would not have been possible without a generous grant from the P.o.P’s Mom and Pop.” So, what does it take to buy a home in DC today?

19 Comment

  • One of the greatest regrets in my life was not coming up with the $60,000 needed or at least the financing to buy the group house I was living in in Mount Pleasant way back in the day. My parents refused to help. But looking back, the basement was horrible, there was no backyard, the roof leaked. My husband and I moved to an apartment and slept in one bedroom with our kids. We renting out the other bedroom to save for a deposit on our Petworth house, with its unleaking roof and great backyard. My parents helped me in other ways in my life, but the home purchase we made all by ourselves.

  • As a single woman, I am very proud of the fact that I purchased my Petworth condo ALL BY MYSELF (and might I add that I am not in an industry which commands a sweet salary). As proud as I am for this achievement, I make no judgments on anyone else. Help was offered by my mother and I considered it and opted not to take it. Instead I made a plan, accepted sacrifices, and saved…for years. I believe that the greatest help my mother provided was not her financial offer but the financial tools and wherewithal she taught me growing up. And for those of you with children, I can honestly give you this one piece of unsolicited advice – teach them early about saving, about the present and future value of money, about financial priorities, and about giving. I sincerely believe that these are a great recipe for financial success…and buying a home in Petworth!

  • I, too, am a single woman who bought my Columbia Heights condo on my own. In fact, the week I bought, I saw a re-run of the Sex in the City episode where Miranda buys her condo, and everyone keeps asking her skeptically “Is it just you?” At signing, she’s asked, “Is your father providing the down payment?”
    But I digress. If my parents had money to spare, I know they would have gladly helped with the downpayment, and maybe I would have been able to buy a small house or at least a 2-bedroom condo. But no, on my government salary, all the saving in the world only provided enough to buy a teeny tiny little slice of real estate. But it’s beautiful.
    I don’t begrudge anyone who has help from their folks, but it does help to explain how so many people, who do not make more money than I, can afford the outrageous costs in CH these days. It makes it a bit frustrating for those of us who are trying to buy on our own salaries. I asked my real estate agent who these thousands and thousands of people are who can afford all these condos, as DC isn’t exactly the money-making capital of the world. He told me most get money from their folks, and that’s why the condo prices will continue to be way too high for the average salary in DC. sniff sniff.

  • In answer to your question, what does it take to buy a house in PW today: generous parents, an ARM/IO/no doc toxic mortgage, OR at least 50-60K in the bank with a minimum salary of 135K.

    Let’s assume the average asking price of a house in Petworth is 400K and lending rules have tightened in response to sub-prime market and housing slump. If you put 10% down and have to pay all of your closing costs, you need to have roughly 40-60K up front and make a gross salary of 11,500 per month (or 138K per year) to meet the general rule of housing not exceeding 30% of your income (not including utilities).

    I have a decent chunk of money in the bank from a previous home sale, make over 6 figures, save close to 20% of my income, but I still couldn’t buy a home in PW without raiding my 401K, getting money from my parents, eating Ramen Noodles for B,L& D or getting married. It’s a total bummer. I have no idea how people do it.

  • This would be a different story were I younger.

    When we bought (1990), houses were quite a bit cheaper here. And still, it took every penny we had and several years of living on beans and rice.

    I find today’s prices stunning, and am impressed with those of you who have been able to buy these days.

    (Then again, you should hear my neighbors. Many of them arrived here in 58 and 59, and paid in the 10,000 – 16,000 range. They REALLY think the prices have gone crazy.)

  • And add to that having a kid to provide for (and send to school) while you’re eating beans … yikes!

  • Another singleton: I’m very proud that I bought my Petworth (well, Columbia Heights — right on the border) condo WITH my parents’ help and I’m not embarrassed to say that. I’m blessed with wonderful parents and I’d shout that from the rooftops.

    First piece of help from Mom and Dad: they are nice people, and they taught me good things about financial management through example, as the first poster mentioned.

    Second piece of help from Mom and Dad: they let me move back home for a year, which was the equivalent of giving me more than $12,000 (my rent at the time.) I saved every penny that didn’t go to paying off my credit cards and generally polishing up my credit.

    Third piece of help from Mom and Dad: they gave me $10,000 so I’d have enough to make the down payment and still have some breathing room.

    Fourth piece of help, that didn’t come from Mom and Dad: I was eligible, because I made under $60k, for a slightly-below-market-rate loan (nothing fancy, just 30 years fixed) through Bank of America that also allowed me to put down just 3 percent with no PMI. I had to take some classes, too, but that was just a few hours out of my time. You can find out more about that through

    Fifth piece of “help” that is attributable to no one: I found a nice one bedroom for not much money. It was listed at $189,000, but I ended up paying more because that was in those “bid up” days, in 2004. Not terribly much more, though. How much would a one-bedroom condo be going for now?

  • Christina,
    Very similiar to what I did. God bless Acorn! Although when I bought if you made under a certain salary you were also eligible for a five year tax abatement from the city. I’d say a condo on the CH/PW border right now is easily 300k and up. Congrats!

  • I didn’t have help, but I also am a miser and prefer money in the bank to closets full of clothes and shoes. I paid off my (admittedly small) school loan and drove my car into the ground and bought my 3-bedroom house. In my family renting and paying someone else’s mortgage is almost considered a mortal sin.

    That said, once I was in it my parents did send me money here and there to use for things I needed.

    Once I did it many of my friends realized they could do it, too, and now all of us own homes and some of us have rental properties, too.

    We are all women, if anyone cares.

  • P.S. I bought in 2002.

  • School loans throw another variable in the whole thing. I was fortunate not to have any. I know that the common perception is that buying is ALWAYS better than renting, and generally it is… but sometimes people feel so down on themselves and frustrated because they can’t make the financials of homebuying work on their salaries.

    So, why beat yourself up about it? We live in an expensive area. For some people, renting is a better choice FOR THEM than buying. I could probably rent in a “better” neighborhood than I could afford to buy in; that’s just the truth of it.

    PoP, I made a little bit too much to qualify for that tax abatement program. If only! That would have been a nice benefit.

    As for the prices, wow! They are through the roof. But there’s a couple of units for sale right now, I think, in my older condo complex. One bedroom, walking distance to the Metro, across the street from the Shady Safeway on Ga. Ave….as a former condo board president, I can say unequivocally that we need good, energetic, smart owners. One is $250K, I think. Not cheap. But cheaper than some. 900 block of Randolph Street. You’ll see signs.

    (Okay, PoP said he was banning the sales pitches so I’m done!)

  • I’m not banning sales pitches, pitch away!

  • I ended up buying my 2-bdrm condo on my own, and having a renter for the first two years. My parentals weren’t in a position to loan me money, but if they were, I would have taken a loan. I probably would have felt bad about taking the mula outright…but then again, I watched them struggle to raise three kids on blue collar salaries, so I think they deserve whatever they have now.

    I certainly don’t begrudge folks who take parental help….unless you’ve always been given everything. Then…well, I’ll admit to being a bit bitter. 🙂

  • Just as I was about to raid my 403(b), a nonprofit 401(k), for my half-million mortgage in Petworth, I found out that you can only pull out 10K for a first time home buy w/o penalty.

    That put a crimp into my 40k downpayment plans (closing costs were covered by the seller), which I am grateful my mom helped un-crimp. I would’ve and could’ve done it myself, but it was great to have mom-financed cushion.

    To those whose parents can help, congrats, but to those who expect serious parental largess in home buying, ain’t it time to grow up?

  • We had parental help. It was driving my dad NUTS that we were renting a house in Arlington. Our rent was much higher than our current mortage — we purchased in Petworth in 2003!

    Happy Petworth living everyone! and CH too!

  • We dipped into our 401k (and are paying it back but it was a no-penalty way to have access to a larger chunk of money, without having to ask the parents for much help! Apparently you can take money out of your 401k without penalty if it’s for a first home, higher education, and one or two other things. It’s a great deal.

  • It is a good option as long as you focus on paying it back, and your job is secure. If you quit/are fired the money is due back immediately or you’ll have to pay taxes on it. And, you don’t want to be robbing your future retirement…who knows if Social Security will be around in any way by the time most of us hit retirement age.

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