The multitude of factors that feed into buying a home in the District are enough to send your head spinning for days, especially for a first-time homebuyer. The current real estate market is downright competitive and, to be honest, quite complex.
Obtaining information about your loan options is paramount and not easily acquired through a quick online search, as you might hope. Google is no substitute for a creative mortgage specialist when your financial satisfaction is on the line.
Any lender can tell you what type of loan they think you should choose. The real value is building a partnership with a lender who is “in the know” and educates you on the local down payment assistance options and lesser known loan programs. Understanding all loan options empowers you to make the choice your own.
Making this decision is not only based on obtaining the lowest rate, the lowest monthly payment, or the lowest down payment, but also based on how it affects your total financial picture now and much further down the road.
Here are examples of how the five loan programs work:
HPAP (Home Purchase Assistance Program) and EAHP (Employer Assisted Housing Program)
You are a first-time buyer, purchasing in DC, and you have a little bit saved up but don’t want to deplete your savings on the down payment. You would like to purchase a home that is a bit out of your price range and a larger down payment could help you qualify.
Benefits of HPAP:
- Community based lending program that provides down payment and closing cost assistance to qualified low to moderate income residents purchasing in the District.
- Interest free loans up to $80,000 plus $4,000 towards closing cost assistance depending on your household income level
- Helps homebuyers obtain a home with very little out of pocket expense
Benefits of EAHP:
-Provides down payment assistance to DC Government employees and First Responders of the District
-Qualified buyers may utilize the HPAP and EAHP programs concurrently
-Helps homebuyers who are also DC Government employees with lowering their out of pocket expense
DC Open Doors
You are a first-time buyer, purchasing a home in DC, and do not have a lot of money saved up for a down payment just yet, but you can afford the monthly mortgage payment just fine.
Benefits:
- Zero down payment required for qualified first time DC homebuyers
- Helps buyers invest in their new home sooner with no down payment requirement
- Reduced mortgage insurance rates which yields a lower monthly payment
FHA 203K Renovation Mortgage and Fannie Mae Homestyle Renovation Mortgage
You are in love with a specific neighborhood but the only homes for sale need a lot of TLC or, at the very least, an updated kitchen and you don’t wish to spend your savings on the much-needed renovation.
Benefits:
- Allows you to “roll in” the cost of the renovation for a purchase or refinance with only 3.5% down for the FHA 203K and 5% down for Fannie Mae Homestyle
- Great for homes in need of a little face lift (update the kitchen and bathrooms) or a full gut renovation
- Make your new home your dream home without breaking the bank
Bridge Loan Financing
You have a home to sell before you buy and cannot qualify carrying both mortgages but have just found the PERFECT home. You would like to write an offer with no contingencies to compete against the four other offers on this home.
Benefits:
- Short term financing that helps bridge the gap between selling your current home and buying the new home without the need to qualify carrying two mortgage payments
- Write a sales contract that is not contingent upon selling your current home to help set you apart from the competition
- Tap into the equity in your current home and receive cash to purchase the new home before you sell
Buying a home is truly an exciting time in your life, but also an integral piece of your total financial portfolio. Building the right team and selecting the best loan program ensures that you create a solid foundation for your current and future financial success.
Jaime Young is a Senior Loan Officer at MVB Mortgage located downtown on 14th and K Street, NW. She has delivered her mission of education and empowerment to thousands of homeowners over the past 20 years. She is a specialist in local down payment assistance programs, new construction, renovation loans for purchases and refinances and everything in between. Intrigued by these options? Reach out to Jaime to learn more: jyoung@mvbmortgage.com or 571-244-4352.
MVB Mortgage, MVB Mortgage of PA, and MVB Mortgage of KY are registered trade names of Potomac Mortgage Group, Inc., a wholly-owned subsidiary of MVB Bank, Inc. • Company NMLS ID #181319 (www.nmlsconsumeraccess.org) • Equal Housing Lender. Jaime Young NMLS ID#299882
