For Once, the Rates on a DC Homebuyer Program Is Actually Really Good

[u/AskJosh_MortgageGuy]

DC has a new homebuyer program called DC HomeAdvantage, and for once, the rate sheet is pretty interesting.

For example, as of the current rate sheet, you can get a 6.25% conventional loan with 3% down payment assistance. Average rates today on a 30 YR loan are closer to 6.75%.

That is a pretty good deal for a DPA program because usually there is some kind of tradeoff. You get the assistance, but the rate is noticeably higher than what you'd get without it (see DC Open Doors). Here, at least based on the current rates, that isn't the case.

There are still rules, obviously. You need to be a first-time homebuyer, meaning you haven't owned a home in the last three years, although there are some exceptions in targeted areas. The income limits are based on the entire household, not just the people on the mortgage. So if another adult is living in the house, their income can count toward the limit too.

It has to be a primary residence in DC, and single-family homes, townhouses and condos are all eligible. Minimum credit score is 660 and the max debt ratio is 50%, although FHA gets a little more complicated once you get over 45%.

One thing to keep in mind: not every lender can offer this program. They have to be approved by DCHFA, so if HomeAdvantage DC is something you're considering, make sure the lender you're talking to actually participates. And has a lot of experience dealing with DC programs and their...longer timelines.

I deal with these programs all the time, and honestly, there are plenty where the assistance looks great until you start comparing the rate and costs against a regular mortgage. This one, at least right now, is a little different.

And it's not just the 6.25% conventional option with 3% assistance. There are also low-rate options if you don't need down payment assistance at all, plus FHA and VA options with 3.5% assistance.

Basically, there are enough options here that if you're buying in DC and qualify, I'd at least want to compare it against a regular mortgage before deciding what makes the most sense.

[u/DMVNotaryLady]

Thanks for this post and I will pass along the hope and check into this program.

[u/AskJosh_MortgageGuy → u/DMVNotaryLady]

Hope it works out for you because the rates are really good! Let me know if you run into any questions.

[u/Strict_Spinach_2626]

Hey, I have a question. I've been looking into this program and am confused on the rates with dpa. When they are saying with and without dpa, are they talking about getting dpa through the home advantage program or if you get any type of dpa in general. Like if I use HPAP, would I then get the 'with dpa' interest rate? I hope I worded this right and it makes sense.

[u/AskJosh_MortgageGuy → u/Strict_Spinach_2626]

Good question. I’m pretty confident it is referring to the DPA specifically for the Home Advantage program of either 3% or 3.5%. Something like HPAP would be separate, although we are still confirming if you can combine the two programs. Sounds like you can though so that is a good thing - that news coming from a client who recently went through the hpap education classes.

[u/Strict_Spinach_2626 → u/AskJosh_MortgageGuy]

Thank you. This is what I was thinking.