HPAP, or the Home Purchase Assistance Program

built for first-time buyers in Washington DC needing assistance with the down payment and closing costs.

Approved applicants are eligible for a repayable loan for both closing costs and down payment funds.  The down payment assistance loan can range from about $16,000 to $80,000, and the closing cost assistance up to $4,000.

The minimum cash contribution for a buyer when using HPAP funds is either $500 or half of their savings above $3,000.

The HPAP loan repayment is deferred

HPAP is a loan and this must be paid back but for the first five years after the purchase the loan repayment is deferred. After the first five years the loan repayment starts and the loan must be paid back over a forty year period with no interest.

The remaining sum is due in full upon moving out or selling.  Therefore if you plan to move out of the property and convert it to a rental, this program may not be a good fit.

The HPAP program funds are meant to be gap financing, to make a housing payment that would otherwise not be affordable, affordable. 

The program guidelines require that if the proposed housing payment is less than 28% of your gross monthly income, that your HPAP loan be reduced. 

This is because there is a limited amount of funds allocated to HPAP annually and if a first time buyer’s proposed housing payment is less than 28% of their income, HPAP’s opinion would be that others need access to the assistance more.

Wanna find out more information on HPAP? Check out the official website here.