HPAP is the Districtʼs homegrown downpayment and closing cost assistance program which provides up to $44,000 for first-time, low- and moderate income home buyers ($40,000 downpayment assistance plus $4,000 closing cost assistance). Downpayment assistance is critical for low and moderate income DC residents as saving enough for a downpayment, especially in DC’s expensive housing market, is one of the largest impediments to becoming a homeowner. In addition to the financial assistance, HPAP recipients also receive intensive financial and home buyers’ education. HPAP acts as a second mortgage, which is repaid. HPAP has helped more than 13,000 DC residents move from renting into homeownership, and currently generates $2 million in repayment every year. Even through the housing crisis, HPAP recipients have only a 2% foreclosure rate.
Why support Homeownership East of the Anacostia River?
The homeownership rates in Ward 7 and 8 are currently the lowest in the District. As commercial and residential development progresses along the Anacostia River, District residents living East of the River have an amazing opportunity to purchase before prices become too great. Purchasing a home now will enable current residents to remain in Wards 7 & 8, benefit from the coming development, and secure an affordable home and equity to pass along to future generations. The $300,000 proposed by Mayor Gray would support homeownership resource centers East of the River to direct people to available education, downpayment, realtors and lending resources, provide residents with a homeownership inventory database, and other services. A coalition of for-profit and nonprofit service providers are prepared to participate in this effort.
Why should HPAP provide larger loan amounts?
Before the Great Recession, the maximum HPAP loan amount was $70,000. That amount was lowered to $40,000 at a time of extreme budget cuts. Now that the market has rebounded, first time homebuyers need more buying power to purchase homes that will pass safety inspections. The number of homes available and affordable to potential HPAP buyers is much smaller than the number of buyers – who are often in competition with each other for scarce units. And additional $10,000 of assistance would allow buyers to afford a house that costs 20% more.
This year, we call on the DC Council to:
- Commit $4 million to the Home Purchase Assistance Program (HPAP) to fund an increased loan amount that better reflects the DC housing market
- Change the maximum allowable HPAP loan amount to $54,000 per applicant in the Budget Support Act
- Support the $300 K commitment in Mayor Gray’s budget to support new homeowners East of the River