Understanding the Home Purchase Agreement Program (HPAP)
The Home Purchase Assistance Program (HPAP) facilitates residents in the home buying process and makes their goals of ownership attainable. Let’s take a look at what this program has to offer and who is eligible for it.
Where is there a better place to live the American Dream than in the nation’s capital itself? Washington, DC is a bustling metropolis with people that come from all walks of life. It is this diversity that allows the district to thrive.
The Challenge
However, as the years have passed, the cost of living has gone up with inflation and it has become increasingly expensive to purchase in the city, crowding many residents out of homeownership.
In this article we will cover:
- What the Home Purchase Assistance Program is and how it work
- The benefits associated with HPAP
- Who is eligible for for the Home Purchase Assistance Program
- What organizations are involved with HPAP
- The application process for the Home Purchase Assistance Program
- HPAP repayment terms
What is the Home Purchase Assistance Program?
The Home Purchase Assistance Program, offered through the DC Department of Housing and Community Development provides interest free loans for use toward the down payment and closing costs of purchasing property in DC. Funds can be used toward the purchase of a single family home, townhouse or condominium unit within the district. The Home Purchase Assistance Program began in 1978 and has served over 7700 buyers, providing over 210 million dollars toward down payment and closing cost assistance.
Benefits
There are several advantages associated with the Home Purchase Assistance Program that benefit not only the homebuyers but the community as a whole.
● It helps residents who are unable to save for a downpayment while already paying the steep rental prices of the district.
● It keeps housing affordable in the district by opening up options to lower income earners. Affordable housing options decrease the chances of a housing value over inflation, and ballooning rents caused by real estate investors.
● It helps preserve real estate in the district, as property owners take pride in their homes and maintain their real estate investment.
● It fosters a sense of community as homeowners become invested in their neighborhoods.
● It creates homeowners that advocate and affect change within the schools and community.
● It allows residents to take advantage of historically low mortgage interest rates without having to save thousands for a downpayment.
HPAP Eligibility Requirements
There are several stipulations the HPAP program has in place to assure funds go towards those who need it the most. Eligible applicants must:
- Be a first time homebuyer and head of their household.
- Be a resident that is a low to moderate income earner.
- Have had no ownership in any residential real estate property in the last 3 years.
- Show financial readiness and credit worthiness.
- Intend to use the property as their primary residence.
The Department of Community and Housing Development has an assistance table to demonstrate how much each individual applicant may be approved for. The most an applicant can receive is up to $80,000 toward a downpayment and $4,000 toward closing costs.
Application Process
To begin the application process, individuals must contact a community based non-profit organization (CBO). These organizations include:
- Housing Counseling Services, In.
- Latino Economic Development Center
- Lydia’s House, Inc.
- University legal Services, Inc.
- Manna, Inc.
The CBO will determine the eligibility of the potential applicant. If the individual is not quite financially ready for homeownership, they provide counseling on how to adequately prepare. If they are ready for homeownership they will collect all of the necessary information and documentation for the applicant. They will then forward the application to an Home Purchase Assistance Program administrator who will process the application.
Applicants are expected to make some contribution toward their purchase of a home. HPAP stipulations require that applicants contribute a greater amount of 50% of their liquid assets above $3,000 or a minimum of $500. This contribution may be waived for applicants that demonstrate need for households that are disabled, displaced, elderly or handicapped.
Loan Repayment
The Home Purchase Assistance Program is an interest free loan that needs to be repaid. Repayment plans vary based on the income level of the households. Here are some of the terms of repayment:
- Moderate income families start making payments after 5 years. The payments begin in year 6 and are amortized over 40 years.
- Very low-low income households can qualify for no monthly payments.
- All loans must be repaid in full at the time of the property transferring ownership, either through selling or passing the property on to kin in an inheritance, or if the property is no longer the borrower’s primary residence.
Conclusion
Overall, HPAP is a great program serving the low to moderate income earners in the city. It helps residents have pride in ownership and feel permanence. Homeownership in the district should be available to all of its residents. The Home Purchase Assistance Program makes this accessible to many more, creating a thriving community.
Be sure to book a consultation and see if this program is right for you.
