DC Open Doors Loan Can Be Forgiven, No Repayment

DC Open Doors DPAL | Washington DC Real Estate | First Time Home Buyers

In an effort to promote and make homeownership and Washington DC real estate more affordable, the District of Columbia Housing Finance Agency (DCHFA), has created a down payment assistance program called DC Open Doors.

The DC Open Doors program offers down payment assistance loans (also referred to as DPALs) for Washington, DC residents.

The advantage of these loan (and most other DPALs) is that under very simple conditions, these loans DO NOT have to be paid back.

YES— not typo here, this loan is easily forgivable. Forgivable is a common term for DPALs.

The purpose for DPALs is for you to buy a home and live in it for a certain amount of time.
 

The Requirement

The time required to have the down payment forgiven with the DC Open Doors DPAL is 5 years. Yes, just 5 five years!

If you continue to live in the home purchased with the DC Open Doors DPAL for 5 years and do not sell or refinance the mortgage, the DPAL will be completely forgiven.

Completely.

This loan is forgiven at a rate of 20% per year.

So, for example, if you sell the property in year 4, only 80% of the DPAL will be forgiven. If you sell the property in year 3, only 60% of the DPAL will be forgiven. And so on…
 

Rental Provision

Take note that the requirement is to continue to live in the home and not simply continue to own the home.

No rentals for 5 years.

In other words, if you move-out and rent the property, you risk the ability to have the loan forgiven.

After the 5 years and the DPAL has been forgiven, there are no longer any rental provisions.
 

DC Open Doors Highlights

Mortgage Loan ProductFHA w/ Down Payment AssistanceFHA w/out Down Payment
*DCHFA’s down payment assistance is a 0%, non-amortizing, subordinate loan due upon sale, refinance or the borrower no longer occupying the property as a primary residence within the 1st five years.
LTV (Loan To Value) 96.5%96.5%
Down Payment Assistance*3.50% Subordinate LoanNone
DCHFA RequirementsMaximum borrower income of $132,360Maximum borrower income of $132,360
Minimum Credit Score640640
Maximum Debt to Income45%45%
Additional Product RequirementsAll FHA underwriting requirements
imposed.
All FHA underwriting requirements
imposed.

 

More Info

For more information on the DC Open Doors Program, please complete the form below!

 


About Dana Ash-McGinty 66 Articles
Dana Ash-McGinty is the Principal Broker of Ash McGinty, a Washington, DC Real Estate Brokerage. This real estate maven has 15+ years experience in residential, commercial and land sales in addition to multi-state residential renovation, re-zoning, and condo conversion projects. A sought after real estate authority, she has been featured on CNN and in various real estate and financial publications. Dana is married to the highly esteemed Dr. Dana W. McGinty, a Washington, DC based internal medicine physician. They are often referred to as "The Danas".