This guide lays out a first-time DC purchase in ten steps, from credit check to closing, with the DC assistance programs and tax rules that apply at each step.

Step 1: Check Your Credit, Savings and Debt (6-12 Months Before)

Credit Score

Pull your free credit reports at annualcreditreport.com and check your scores:

780+: Top agency pricing tier and the most program options
700-779: Full program access
660-699: Full program access with higher agency pricing adjustments
620-659: The conventional minimum
580-619: FHA available

To raise your score:

Paying down credit card balances (keep utilization under 30%)
Making every payment on time
Not opening new credit accounts
Disputing any errors on your reports

Savings

Plan for:

Down payment: depends on the loan type; the programs in Step 3 can reduce what you bring
Closing costs: $10,000-$25,000 in DC
Reserves: 2-3 months of mortgage payments in savings after closing
Moving and immediate expenses: $2,000-$5,000

Debt-to-Income Ratio

Add up your monthly debt payments (student loans, car payments, credit card minimums) and divide by your gross monthly income. Lenders want this ratio under 43-45%, and a lower ratio qualifies for more.

Step 2: Complete Homebuyer Education (3-6 Months Before)

Take an 8-hour homebuyer education course before you shop. The certificate is required for HPAP, and DC Open Doors may require it depending on the loan.

Where to take the course (DHCD's current partner list is on the HPAP page):

Housing Counseling Services (HCS)
Latino Economic Development Center
HomeFree-USA
University Legal Services
Lydia's House

The course is 8 hours (in-person or online) and covers:

Budgeting and credit
The home-buying process
Working with agents and lenders
Home maintenance and responsibilities

Cost: Free to $75 depending on the provider.

Step 3: Check Which DC Programs You Qualify For (2-4 Months Before)

FHA and DC's recordation tax and Tax Abatement benefits apply on any qualifying loan. DC Open Doors and HPAP are available only through the channels named in their headings.

FHA Loan

3.5% down payment
The whole down payment can be a gift from family
Condos need an FHA-approved building or FHA single-unit approval

DC Reduced First-Time Buyer Recordation Tax

First-time buyers record the deed at 0.725% instead of the standard 1.1% (under $400,000) or 1.45% ($400,000 and above)
Purchase price must be under $777,000 (tax year 2026)
Combined household AGI must be under $206,640 (tax year 2026) for one person, rising with household size
The property must also qualify for the Homestead Deduction
Claimed at settlement; no special lender required

DC Tax Abatement (Lower Income Homeownership Exemption)

Waives recordation tax entirely and abates real property tax for five years
Purchase price cap of $576,000 (tax year 2026)
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-timers
Claimed at settlement

DC Open Doors (through DCHFA's participating lenders)

Covers your required minimum down payment through a zero-interest deferred second
Placed only through lenders enrolled with DCHFA
Open to repeat buyers as well as first-timers
640 minimum credit score; income cap of $275,400 (borrower income only)

HPAP (through DHCD-certified housing counseling agencies)

Up to $202,000 of deferred, zero-interest down payment financing, plus $4,000 toward closing costs
The amount depends on household income and size
Administered by the DC Department of Housing and Community Development (DHCD)
Apply early; HPAP processing takes weeks
Requires the homebuyer education certificate from Step 2

DC Employer Assisted Housing Program

For DC government employees: a deferred loan up to $20,000 plus a matching grant up to $5,000, with higher amounts for first responders and educators
If you work for a private employer, ask your HR department whether it offers a homebuying benefit

Step 4: Get Pre-Approved (1-2 Months Before)

Pre-qualification and pre-approval are two different steps:

Pre-qualification: Quick estimate based on self-reported information. Not verified.
Pre-approval: Full application with credit pull, income verification, and asset documentation. The letter tells a seller your income, assets and credit have been checked.

Documents for Pre-Approval

2 years of tax returns
2 years of W-2s or 1099s
2 months of bank statements (all accounts)
Recent pay stubs (30 days)
Government-issued ID
HPAP approval letter (if applicable)

Choosing a Loan Officer

Get at least two Loan Estimates for the same loan type and term, and compare:

Origination fees and lender costs on page 2 of each Loan Estimate
Does the loan officer publish current rates? District Mortgage posts today's rates at /rates.
Will one person handle your file from pre-approval through closing?
How quickly does the loan officer answer calls and emails?

Multiple credit pulls within 14-45 days count as one inquiry for scoring purposes, so comparing lenders in that window counts as one inquiry.

What a Pre-Approval Shows

Your maximum purchase price
Your estimated monthly payment at different price points
Which loan programs you qualify for (FHA, conventional, VA)
Any credit, income or asset issues to fix before you make an offer

Step 5: Find a Real Estate Agent

A buyer's agent represents you in the purchase. You agree the agent's fee in writing up front; you may pay it, the seller may cover it through a concession, or the two may split it. Look for:

Recent DC sales in the neighborhoods you are considering
Experience with FHA buyers and DC's first-time buyer recordation tax
Closed sales in multiple-offer situations
Good communication and responsiveness

Questions to Ask a Buyer's Agent

How many DC purchases did you close this year?
Have you closed purchases using FHA financing and DC's reduced recordation tax?
How do you write offers in multiple-offer situations?
Which neighborhoods do you work in?

Step 6: Search for Homes (1-3 Months)

Set Your Priorities

Rank your priorities: location, size, condition, price, parking, outdoor space, commute. A ranked list lets you decide quickly when a house meets some priorities and not others.

DC Housing Types

Rowhouses: Attached brick or frame houses. Condition ranges from unrenovated to fully updated. Check for historic district restrictions.
Condos: Lower entry price. Research HOA dues, warrantability, and building financials.
Co-ops: Found in some neighborhoods. Require specialized co-op financing.

Set Your Budget

Set your target budget below your pre-approval maximum. Factor in:

HOA dues (for condos)
Property taxes (0.85% of assessed value, less the homestead deduction)
Maintenance (1-2% of home value annually for rowhouses)
Utilities
A monthly payment you can carry, below the maximum you qualify for

Step 7: Make an Offer

Offer Components

Price: Based on comparable sales, condition, and market competition
Earnest money deposit: 1-3% of purchase price, held in escrow
Contingencies: Financing, inspection, appraisal. Each protects you, and each makes the offer less attractive to the seller.
Closing timeline: 45-60 days

Offers in a Multiple-Offer Situation

When other buyers are bidding on the same house, you can offer:

A full pre-approval letter
A larger earnest money deposit
A closing date that fits the seller's timeline
Escalation clause (automatically increases your offer up to a maximum if outbid)

Step 8: Under Contract (45-60 Days)

Home Inspection (Weeks 1-2)

Cost: $400-$600 for a general inspection
Consider adding: sewer scope ($150-$250), radon test ($150), structural engineer ($300-$500) for older homes
Review findings with your agent and negotiate repairs or credits if needed

Appraisal (Weeks 2-3)

Ordered by your lender to verify the property's value
Cost: $400-$600 (you pay this)
If the appraisal comes in low, you can negotiate a lower price, make up the difference in cash, or walk away

Loan Processing (Weeks 2-4)

Your lender verifies everything: employment, income, assets, credit
Respond quickly to any requests for additional documentation
Don't make major financial changes (no new debt, no large purchases, no job changes)

Title Search (Weeks 2-3)

The title company researches ownership history
Checks for liens, judgments, or encumbrances
Issues are resolved before closing

Final Walkthrough (Day Before Closing)

Verify the property is in the agreed-upon condition
Check that any negotiated repairs were completed
Confirm all agreed-upon items (appliances, fixtures) are present

Step 9: Closing Day

What to Bring to Closing

Government-issued photo ID
Cashier's check or wire transfer confirmation for closing funds
Any remaining documentation requested by the settlement company

What Happens at Closing

Review and sign the Closing Disclosure (itemizes all costs)
Sign the mortgage documents (deed of trust, promissory note)
Sign the deed transferring ownership
Pay closing costs
Receive the keys

Closing takes 1-2 hours.

Step 10: After Closing

Tasks Right After Closing

Change the locks
Set up utilities in your name
Apply for the DC Homestead Deduction (reduces property taxes by ~$780/year at tax year 2026 figures)
File for any applicable tax exemptions
Update your address with the post office, employer, banks, etc.

Ongoing Homeowner Responsibilities

Make mortgage payments on time (set up autopay)
Maintain homeowner's insurance
Budget for maintenance and repairs
Pay property taxes (usually through your escrow account)
Keep records of all home improvements (helpful for future sale)

Timeline Summary

When	What
6-12 months before	Check credit, start saving, reduce debt
3-6 months before	Complete homebuyer education
2-4 months before	Check FHA, recordation tax, Tax Abatement, Open Doors and HPAP eligibility
1-2 months before	Get pre-approved, find an agent
1-3 months	Search for homes, make offers
45-60 days	Under contract: inspection, appraisal, loan processing
Closing day	Sign documents, get keys
After closing	Homestead deduction, settle in

Start 6-12 months ahead, check the DC programs in Step 3, and choose an agent and a loan officer who have closed DC purchases.

See our first-time DC buyer guide, see today's rates, or get pre-qualified in two minutes with no credit pull.

How to Buy Your First Home in DC: 10 Steps from Credit Check to Closing