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    Why Buy in DC?

    The DC metro region is large and diverse and it can be overwhelming to decide where to buy a home. For years, DC itself was viewed as the place where one rented an apartment but when the time came to settle down, buy a home and maybe have a family, it was off to the MD and VA suburbs. But things are changing. For years, the District has been offering potential homebuyers – particularly low and middle income homebuyers – incentives to purchase property in the District and put down roots. Lately, their investment has been paying off. People are moving from the suburbs back into the city.  For one thing, the close in suburbs are no longer any more affordable than living in the city itself. Plus, folks are realizing that many DC neighborhoods offer the sense of community and accessibility that so many of us are looking for. So besides saying goodbye to being stuck in traffic for hours on the beltway, what are the other perks of buying in DC?

    Homebuyer Assistance

    Particularly HPAP (Home Purchase Assistance Program) and DC Bond. HPAP provides qualified individuals with up to $44,000 in financial assistance in the form of a 0% interest, 5 year deferred loan for the purchase of a home or condominium. The money can be used for down payment and/or closing cost assistance. Applicants must be first-time homebuyers and have lived in the District for at least the past two years. Factors such as income and household size determine the loan amounts that applicants may receive. For more information, visit the Greater Washington Urban League.

    The DC Bond Program provides low interest, 30 year fixed rate loan products to folks purchasing in the District. They also offer $10,000 in downpayment assistance when funds are available. After temporarily suspending the program while finding a new loan servicer, the program will be open again in April 2012. DC Bond funds can be combined with HPAP to increase affordability. Check out the DC Housing Finance Agency for more information.

    There are other programs available for certain qualified individuals like DC government employees. To learn more, check out our helpful programs page.

    Tax Abatement/Homestead Deduction

    There are two different incentives when it comes to paying property taxes in the District. First, the Homestead Deduction is something that everyone who owns a principal residence in DC can take advantage of, regardless of income. As long as you claim the home in DC as your principal residence, the value of the property for tax purposes is reduced by $67,500, so everyone pays a bit less in taxes.

    The other great incentive is the Tax Abatement Program. Qualified applicants are exempt from paying any property taxes for the first 5 years that they live in the property. That’s right. You don’t pay taxes for five years. None. Zilch. You also don’t have to pay transfer and recordation taxes at closing which are hefty at 1.1% of the purchase price of your home. This program is based on income, however, and is intended to help the most vulnerable folks in the city. To find out if you qualify, go to the Office of Tax and Revenue or ask your agent or lender.

    Tax Credit

    Just like the federal government gave an $8,000 tax credit to people who bought homes during the economic crisis, DC also provides first time DC homebuyers with a tax credit of up to $5,000 for married couples. This isn’t just a stimulus measure though. DC has been doing it for years. To find out more, once again go to the Office of Tax and Revenue.

     

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