“Bowser Administration Announces Major Enhancements to DC’s First-Time Homebuyer Programs”

Photo by PoPville flickr user Lorie Shaull

From a press release:

“Today, the Bowser Administration announced major enhancements to the District’s homebuyer programs, including increased financial assistance and longer loan payback periods, giving District residents who are first-time homebuyers more purchasing power and a greater pathway to homeownership.

“For nearly 40 years, our homebuyer programs have given the gift of homeownership to thousands of DC residents, but as housing prices rise, we must do even more to make homeownership and affordable housing a reality for every resident,” said Mayor Bowser. “The improvements we are introducing deliver on my promise to ensure safe and affordable housing for more Washingtonians. Come January 1, when these new enhancements go into effect, we will change the way home buying works in the District. I couldn’t think of a better way to ring in the New Year.”

The enhancements are being made to homebuyer programs administered by the DC Department of Housing and Community Development (DHCD) that provide down payment and closing cost assistance. Those programs include the Home Purchase Assistance Program (HPAP), which provides assistance to first time homebuyers making up to 110 percent of the area median income (AMI); the Employee Assistance Housing Program (EAHP), which provides assistance of up to $10,000 for eligible District government employees; and, the Negotiated Employee Affordable Housing Program (NEAHP) which provides assistance of up to $26,500 for certain unionized District government employees.

“My chief mission at DHCD is to do ‘more with more’ to get residents into affordable housing,” said DHCD Director Polly Donaldson. “That includes not just producing and preserving affordable housing units, but overseeing homebuyer programs that help residents get the keys to their first home. The new changes to these programs will give District residents more down payment assistance, loan them more money and give them more time to pay back their loan. This will give them more purchasing power and put the keys in their hand faster.”

The four enhancements will:

· Increase the FY2017 budget for the homebuyer programs by almost 50 percent, to $16 million. This will help approximately 75 more households finance their home purchases compared to FY2016 (300 households in FY17 compared to 226 households in FY2016).

· Increase HPAP’s maximum loan amount from $50,000 to $80,000. This will make the homes of many program participants more affordable and – in some cases – give residents a mortgage payment less than comparable market-rate rents. For example, using an $80,000 deferred payment HPAP loan, a four-person household with an income of $54,000 could qualify for a total housing payment of $1,650 per month, supporting the purchase price of a $340,000 house. Recent data shows that the average rent for a one bedroom apartment in the District is slightly over $2,000.

· Revise the repayment terms for 70 percent of HPAP borrowers. Currently, HPAP has a five-year loan deferral period, and when that period ends, some borrowers get sticker shock because of the higher mortgage payments. For borrowers with incomes below 80 percent AMI, the change will defer their loans until the property is sold, refinanced to take out equity, or is no longer their primary residence. Moderate-income borrowers who earn between 80 percent and 110 percent AMI will have payments deferred for five years with a 40 year principal-only repayment period.

· Add a second HPAP administrator to enable the District to more efficiently and effectively implement these major enhancements. The program will be co-administered by the DC Housing Finance Agency and the Greater Washington Urban League to accommodate the anticipated growth in requests for assistance from District residents.

More Affordable Housing Enhancements Coming

These enhancements are part of a series of actions Mayor Bowser is planning to further produce and preserve affordable housing in Washington, DC. The Administration is also aggressively moving vacant and blighted properties out of the pipeline – of the approximately 160 such properties in DHCD’s inventory, at least half are at various stages of disposition. Properties that DHCD disposes of typically must be affordable to households earning roughly $87,000 or less, a restriction that stays with the property for 15 years. In addition, any property disposed of within a historic district adheres to the standards and guidelines established by the Historic Preservation Review Board.

In the last two years, DHCD has enhanced the solicitations process to dispose of vacant and blighted properties. The agency has shortened its normal competitive Request for Proposals to disposition process for single family homes and lots from several years to up to 18 months. Last year, DHCD improved its solicitation process and now applicants can apply online, similarly to how applicants can apply for Housing Production Trust Fund (HPTF) and federal funding sources. In addition, an applicant can apply for DHCD development finance funding (HPTF and federal) and land (building or lot) in one competitive solicitation.

DHCD is committed to using fair, transparent, competitive, online processes to create affordable housing, achieve its first source and Certified Business Enterprise procurement ambitions, and get the best outcomes from the assets it owns. For example, DHCD’s November 29 solicitation of offers will turn six properties – including four buildings – in Historic Anacostia into affordable housing. The end result will be new, vibrant affordable homes for District residents making no more than 80 percent of the area median income. A pre-bid meeting will be held on December 13 at DHCD’s Housing Resource Center for all interested developers. To ensure that the development process moves expeditiously, DHCD has set January 12, 2017 as the deadline for applications.

In early 2017, DHCD will announce a new initiative that will dispose of single family properties (lots and buildings) for $250 to create new affordable homeownership opportunities for teachers, firefighters, police officers, and public servants.”