The lowest-cash way to buy a home in DC starts with a low-down-payment loan and DC's first-time buyer tax breaks. Buyers within the income limits can add DC Open Doors, HPAP or EAHP. This post covers what each one pays, who qualifies, and how they combine.
Low-down-payment loans: FHA and conventional
- FHA: 3.5% down with a 580+ credit score, and the whole down payment can be a gift from family. FHA works with all of the DC programs below.
- Conventional: 3% down when at least one borrower is a first-time buyer, or through Fannie Mae HomeReady or Freddie Mac Home Possible; 620+ credit score. Mortgage insurance can be removed once you reach 20% equity.
- VA: No down payment for eligible veterans and service members. DC programs can still help with closing costs.
DC tax benefits for homebuyers
DC offers three tax benefits to buyers, applied at settlement and after, with any lender:
Reduced recordation tax for first-time buyers
DC charges recordation tax on the deed at 1.1% of the purchase price under $400,000 and 1.45% at $400,000 and above; the purchase-money deed of trust recorded with it is exempt. Qualifying first-time DC buyers pay 0.725% instead: on a $500,000 purchase, $3,625 instead of $7,250.
Conditions for tax year 2026: DC resident; never owned a DC home that carried the homestead deduction as your principal residence; price at or under $777,000; household federal AGI within the ROD 11 table (from $206,640 for one person); homestead application filed with the deed. The reduction must be claimed at recording and cannot be applied for afterward. Figures reset each October 1.
DC Tax Abatement (Lower Income Homeownership Exemption)
- On purchases up to $576,000 (tax year 2026), no recordation tax and a five-year real property tax abatement
- Household income limits from $89,760 (tax year 2026) for one person to $169,200 for eight
- Open to any buyer making the home a principal residence, not only first-time buyers
- Claimed at settlement; limits reset each October 1
DC homestead deduction
- Reduces assessed property value by $91,950 for tax year 2026
- Lowers the property tax by about $780 a year
- You must apply after purchase; the deduction is not automatic
DC Open Doors, through DCHFA's participating lenders
DC Open Doors is DCHFA's program: a first mortgage paired with a deferred, zero-interest second that covers your required minimum down payment.
How DC Open Doors works
- The second covers the full required minimum down payment on the first trust, whatever it is
- 0% interest, no monthly payments
- Repaid on sale, refinance, transfer, at 30 years, or when it stops being your home
- Must close through a lender enrolled with DCHFA
DC Open Doors eligibility
- First-time and repeat buyers
- Must purchase in DC and occupy as primary residence
- Borrower income up to $275,400; 640 minimum credit score
- First trust up to $1,249,125; no sales-price cap
HPAP (Home Purchase Assistance Program), through DHCD-certified housing counseling agencies
HPAP is administered by DC's Department of Housing and Community Development (DHCD) and applied for through DHCD-certified housing counseling agencies. The first mortgage must come from a lender that participates in HPAP.
How HPAP works
HPAP provides interest-free loans for down payment and closing costs on top of a standard first mortgage. Below 80% of median family income the loan is fully deferred, with no monthly payments until you sell, refinance, or stop living in the home. At 80-110% MFI, principal-only payments start in year six, amortized over 40 years.
HPAP assistance amounts
The maximum is $202,000 toward the down payment, plus $4,000 toward closing costs.
That maximum goes to the lowest income tier. Assistance scales down through the very low, low, and moderate income bands and varies by household size. DHCD publishes the governing figures in its HPAP Homebuyer Assistance Table, which is republished as area median income updates.
The income thresholds and the assistance amounts change with each AMI update, so we do not reproduce the full grid here. Check the current DHCD assistance table, or ask us to run your household size and income against the version in force today.
HPAP requirements
- No ownership interest in any residential real estate in the past three years
- Must purchase in DC
- Must occupy as primary residence
- Complete a HUD-approved homebuyer education course (8 hours)
- Contribute $500 or half your liquid assets above $3,000, whichever is greater (waivable for some elderly, disabled, or displaced households)
- DC residents are prioritized; non-residents are processed after resident applications
- Have a purchase contract or be actively searching
How to apply for HPAP
- Complete homebuyer education and obtain certificate
- Gather financial documents (tax returns, bank statements, pay stubs)
- Apply through a DHCD-certified housing counseling agency
- DHCD reviews application and determines eligibility and amount
- Receive eligibility letter (4-8 weeks processing time)
- Present letter to your lender during the loan process
HPAP timing and funding
- Apply early: Processing takes 4-8 weeks, and funding is limited annually
- Budget for your contribution: The HPAP minimum contribution ($500 or half your liquid assets above $3,000) must come from your own savings, not gifts
- Funding availability: HPAP is funded by DC's annual budget. Once funds are exhausted for the fiscal year, the program pauses until the next allocation
Combining HPAP with DC Open Doors
The two can be combined, subject to the first-trust program's combined-LTV rules: DC Open Doors covers the required down payment, and HPAP can then cover remaining down payment and closing costs. Ask your loan officer to check the combination on your file before you rely on it.
EAHP (Employer Assisted Housing Program) for DC government employees
EAHP is DHCD's program for DC government employees buying a first home in DC.
How EAHP works
- Deferred, interest-free loan up to $20,000 for down payment and closing costs
- Matching grant up to $5,000
- First responders and DC public and charter school educators have a separate, larger structure; check DHCD's EAHP page for the current terms
- Layers on top of a standard first mortgage
Who qualifies for EAHP
- Current DC government employees (federal employees are not eligible; check your agency's own benefits)
- Must purchase in DC and occupy as primary residence
- First-time homebuyer requirement applies
- Apply through DHCD's EAHP process
Example: combining FHA with DC tax benefits and assistance programs
On a $350,000 condo bought with an FHA loan, the reduced 0.725% recordation rate lowers the recordation tax from $3,850 to $2,537.50. If the household is also within the Tax Abatement income limits, the recordation tax is $0, because the price is under $576,000 (tax year 2026). A household in HPAP's low-income tier can also have HPAP cover the FHA minimum down payment and most closing costs; what remains is the HPAP minimum contribution ($500 or half your liquid assets above $3,000) plus prepaids like the first year's insurance. At $500,000, a moderate-income buyer's HPAP award is smaller; DC Open Doors can cover the minimum down payment on the first mortgage, with HPAP covering remaining costs behind it. Whether a combination works depends on the HPAP tier your income falls in and the first-mortgage program's combined-LTV limits.
Program funding, repayment, and property rules
Program funding
Both HPAP and DC Open Doors have annual funding limits. HPAP pauses when its fiscal-year funds are used up, which can happen before the year ends. Apply as early as possible.
Repayment of the deferred loans
The deferred loans (HPAP, DC Open Doors, EAHP) become due when you:
- Sell the property
- Refinance the mortgage (HPAP: only a refinance to take out equity)
- Stop using it as your primary residence
- Transfer ownership
If you refinance later, DHCD must agree to subordinate the HPAP loan to the new first mortgage; ask your loan officer to request the subordination early in the refinance.
Property requirements
- Must be in Washington DC
- Must be your primary residence
- Must meet program-specific property standards (FHA appraisal standards for FHA loans, etc.)
See the first-time DC buyer guide or get pre-qualified: two minutes, no credit pull.
