While the prospect of buying a home can seem daunting and unattainable at first, you’ll soon realize that there are many programs designed to make home ownership more accessible. If you’re looking to buy a home in Washington, DC, you may have heard of DC Open Doors.
What is DC Open Doors?
DC Open Doors is a homeownership program created by the DC Housing Finance Agency in Washington, DC that helps qualified homebuyers with some of the challenges that go into buying a home.
Who is DC Open Doors Designed for?
DC Open Doors is meant to assist homebuyers with qualifying for a mortgage by lowering the monthly payment and covering the down payment, but there’s more to it than that which we’ll cover in this post.
So let’s talk about what DC Open Door provides and how you can qualify for the loan.
What Does DC Open Doors Entail?
As we mentioned, DC Open Doors is meant to make buying a home more attainable within Washington, DC.
Down Payment Assistance
DC Open Doors goes about this by aiding with a few of the largest obstacles such as down payment assistance and flexible loan qualification requirements.
A down payment can often be the most expensive part of buying a home. For conventional loans, to get the best terms, lenders can often require a 20% down payment that can quickly deplete your savings. DC Open Doors provides down payment assistance in the form of a zero-interest loan. The purchaser is required to repay this loan, with no interest once the house is sold or refinanced.
An important clarification is that this loan does need to be paid back. Up until September 2019, the interest-free down payment loan was forgiven after 5 years of living in your home, but this is no longer the case.
The DC Open Doors loan also offers reduced mortgage insurance costs, often saving borrowers significant money in the long term. With the reduced mortgage insurance and flexible loan qualifications (which we’ll talk about next), the DC Open Door program offers some of the best terms for a 30-year fixed rate mortgage.
Loan Requirements
The DC Open Doors program is very flexible with their requirements to qualify for a loan, but there are some restrictions and qualifications that must be met. Specifically, borrowers must have the following:
- Minimum Credit Score of 640
- Occupy the property as a Primary Residence
- Maximum income of $151,200
- Not own another property
- Debt to Income Ratio of no more than 50%
How to Qualify
Some important distinctions are that you are not eligible for the DC Open Doors program if you already own a property. Also, the borrower must occupy the property as a primary residence, so if you were looking for an investment property, you would not be eligible for this program.
The income limit is based only on the borrower’s income and not household income, an important distinction as co-signers are not permitted as a part of this program. If your household income is $250,000 but your (the borrower) income is only $90,000, you can still qualify.
Keep an eye out for the changing income limits, the maximum income number continues to change, so you’ll want to make sure you are up to date.
First-time homebuyers must complete a Homebuyer education course in order to qualify for a loan. While the program isn’t just for first time home buyers, the potential borrower cannot own another property at the time of settlement.
Leverage Your Real Estate Team
In the same fashion that you leverage an Accountant during tax season or an attorney for legal aspects, your Real Estate Team will take the pressure off of you and enable you to focus on finding your next home.
Real estate professionals are continuously up to date on these programs and any changes to them so that you’re not required to do all of the mundane research that goes behind these programs.
Reach out to The Kree Team if you’d like to better understand this program or see what else might be a fit for you.
