What to know about buying a house in Washington D.C.
Washington D.C. first-time home buyers face steep housing prices on average — well above the national median. But there’s good news, too. You might be in line for all sorts of help, from special mortgages to home buyer education courses and even down payment assistance. Explore all your options to find out how you can buy a house in D.C. more affordably.Verify your home buying eligibility in D.C. Start here
In this article (Skip to...)
- D.C. home buyer overview
- Home loan options
- D.C. home buyer programs
- First-time buyer grants
- D.C. mortgage rates
D.C. home buyer overview
Home purchase prices are actually down in Washington D.C. The median sale price was $552,500 in January 2023. That’s a 14.3% decrease year over year, according to Redfin data. Keep in mind that real estate prices in D.C. are still higher than the median price nationwide.
But don’t let these high home prices discourage you from becoming a homeowner. First-time buyers in Washington D.C. may be in line for help, which can put homeownership within reach even at those high prices.Verify your home buying eligibility in D.C. Start here
D.C. home buyer stats
|Average Home Sale Price in D.C.1||$552,500|
|Minimum Down Payment in D.C. (3%)||$16,575|
|20% Down Payment in D.C.||$110,500|
|Average Credit Score in D.C.2||717|
|Maximum D.C. Home Buyer Loan3||Up to $84,000 through D.C. Government's Home Purchase Assistance (HPAP) program|
Down payment amounts are based on the state's most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.
If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the US Department of Agriculture), you may not need any down payment at all.
First-time home buyer loans in D.C.
If you’re a first-time buyer in Washington D.C. with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).
Of course, few first-time buyers have saved enough for 20% down. But the good news is that you don’t need that much. Not by a long shot. Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:Find the best first-time home buyer loan for you. Start here
- Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying private mortgage insurance (PMI) after a few years
- FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
- VA loan: Only for veterans and active-duty service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
- USDA loan: For those on low–to–moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
- D.C. OpenDoors: “Competitive interest rates and lower mortgage insurance costs.” Plus, the possibility of mortgage credit certificates giving mortgage interest deductions on federal taxes
Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.
In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on your mortgage loan, you could potentially get into a new house with minimal cash out of pocket.
If you’re unsure which program to choose for your first mortgage, your lender or real estate agent can help you find the right match based on your finances and home buying goals.
D.C. first-time home buyer programs
The D.C. Housing Finance Agency (DCHFA) has a range of home buyer assistance programs. Its offerings are mainly designed to help moderate and low-income families purchase a single-family home sooner than they thought possible.Verify your home buying eligibility in D.C. Start here
DC Open Doors (DCOD)
The DC Open Doors promises “competitive interest rates and lower mortgage insurance costs on first trust [main] mortgages.” If you qualify, you can combine this with a down payment assistance program, which we’ll cover in the next section.
To qualify for a DC Open Doors loan, the main eligibility criteria require you to:
- Choose a lender from a list of those participating in the program
- Have a credit score of 640 or higher
- Meet median income limits of no more than $154,800 annually (note: that’s borrower income, not household income)
- Take out a mortgage loan of $647,200 or less
Those are early-2023 figures. You should check the website to see that they still apply when you read this.
To learn more, reserve your place at one of DCHFA’s twice-monthly “informational sessions,” which are conducted online. Or you could just get in touch with one of those participating lenders.
If you’re a first-time buyer and a government employee, the DC4ME loan may offer you a 30-year mortgage with a reduced interest rate. This reduced-rate loan also comes with optional financial assistance — up to 3% of your loan amount to be applied toward the down payment.
You’ll need to complete a home buyer education class and have a credit score of at least 640. Plus, there are limits on loan amount, household income, and purchase price. To review the requirements in detail, check out the link to the DC4ME loan website in the resource section below.
D.C. first-time home buyer grants
DCFHA can help first-time buyers become homeowners with its generous down payment and closing cost assistance programs. You’ll need to use a DCFHA mortgage to be eligible for these assistance programs.Let us help find the right mortgage for you
DC Open Doors DPA
The DC Open Doors program provides an interest-free loan up to the full amount you need for your down payment. This is a deferred down payment loan, meaning you don’t make monthly repayments.
Instead, you repay the loan amount you borrowed (with no interest) in full in the following circumstances: “30 years from the date of loan closing; sale or any transfer (by gift or otherwise) of the property to another person, business, or entity; property ceases to be your principal residence, or refinancing your first trust [main] mortgage.”
Home Purchase Assistance Program (HPAP)
In addition to the DCHFA’s offering, the D.C. Department of Housing and Community Development (DHCD) offers the Home Purchase Assistance Program.
Eligible applicants can receive a maximum of $202,000 in gap financing assistance and an additional $4,000 in closing cost assistance. The “gap” there is the difference between your savings and down payment requirements.
The loan amount you qualify for will be based on your income and household size.
The DHCD’s deal is very similar to the one the DCHFA is offering. It’s an interest-free, deferred loan with no monthly repayments unless “the property is sold, refinanced to take out equity, or is no longer [the borrower’s] primary residence.”
Employer-Assisted Housing Program (EAHP)
If you’re a first responder or work for the D.C. government (not the federal government), check out the resource section below for the link to the District’s special down payment assistance deals for government employees.
DCHFA Mortgage Credit Certificate
You may also be in line for a mortgage credit certificate (MCC). According to the DCHFA’s website, an MCC “provides qualified borrowers the ability to claim a Federal Tax Credit of 20 percent of the mortgage interest paid during each calendar year.”
Where to find home buying help in D.C.
The organizations we’ve listed above should provide advice freely to any first-time home buyer in Washington D.C.
The U.S. Department of Housing and Urban Development (HUD) also provides a list of city-specific programs across the District. These are as follows:Verify your home buying eligibility in D.C. Start here
- DC Department of Housing and Community Development: Provides first-time homeownership opportunities to moderate and low-income residents
- District of Columbia Housing Finance Agency: Home buyer assistance programs, including down payment and closing cost assistance
- Habitat for Humanity: Through volunteer labor, builds single-family homes for households in need
- Home Purchase Assistance Program
- D.C. OpenDoors
- D.C. OpenDoors participating lenders
- DC4ME Program
- Employer-Assisted Housing Program (EAHP)
What are today’s mortgage rates in D.C.?
Mortgage rates vary by borrower. Your own interest rate depends on factors like your credit score, loan program, down payment, and more.
When you’re ready to start the home buying process, experiment with a mortgage calculator to see how down payment and interest rates will affect your mortgage payment. Then, get personalized rate quotes from at least three to five mortgage lenders.
Don’t just look at advertised rates online. Apply for preapproval and compare the interest rates and fees you’re offered. Because that’s the only way to know you’re getting the best deal possible on your new home loan.Time to make a move? Let us find the right mortgage for you
1Source: District of Columbia Association of REALTORS Local Market Insight Report
2Source: Experian.com study of 2021 and 2020 data
3Based on a review of the state's available DPA grants at the time this was written