First Time Buyer Incentives in the DC Metro Area

Last year, we saw the end of the $8,000 Federal Tax Credit to first-time home-buyers. Many people were sad to see it go, however, you may not realize that there are other incentives available to you if you’re thinking of buying your first home! Here’s a rundown:

Washington,D.C.

There’s a highly UNDERpublicized $5,000 tax credit if you meet the following criteria:

• Purchase a home on or before December 31, 2011
• Purchase a home in DC as your principal residence
• “First-Time” buyer is defined as not owning any other main home in DC during the 1-year prior to your purchase date
• Tax credit is $5,000 if single, married filling jointly, head of household, or qualifying widow(er) or $2,500 if married but filing separately
• Other income restrictions and qualifications may apply.

Montgomery County, Maryland

Closing Cost Assistance Program, which gives up to $10,000:

• At least one applicant must WORK in Montgomery County
• Must purchase a home in Montgomery County to be used as your Principal Residence with a maximum sale price of s $429,619
• Must be a “first-time buyer” which is defined as not having owned a home in in the previous 3 years
• The total household income of the applicant may not exceed the current maximum income limits established for the County:
  • One person household: $  82,650
  • Two person:  $118,080
  • Three or more:  $137,760
• Complete a home buyer education class before you close

State Transfer Tax Elimination

• Must be a “first-time buyer” which is defined as never having owned property in Maryland
• Must buy the home as your Principal Residence
• The State Transfer Tax is normally .50%, to be split equally between buyer and seller; however, in the case of a “First Time Maryland Buyer,” this is reduced to .25% and paid by the seller

Arlington County, VA

Virginia Housing Development Authority (VHDA) with FHA Plus – down-payment and closing cost assistance

• Borrower(s) must have cash available equal to a minimum of 1% of the sales price.
• Second mortgage – 3.5% to 5% of sales price.
• Maximum second mortgage 3.5% for qualified borrowers with a 620 – 679 credit score or 5.0% for qualified borrowers with a 680 or greater credit score. The maximum second mortgage is based on the lower of sales price or appraised value.
• The 30-year fixed interest rate for the first and second (both VHDA-financed) mortgage is slightly higher than our standard fixed rate programs.
• The combined total of the two loans cannot exceed VHDA sales price limits.

Low Interest Mortgage Program (SPARC)

• Half percentage point below the current standard mortgage rate
• Loan Limit of $450,000
• Must be a “first time buyer” defined as applicants who have not owned a home within the past 3 years
• Cannot exceed these income limits: $97,500 for a family of 1 or 2 and $112,950 for a family of 3 or more.

Moderate Income Purchase Assistance Program

• Provides up to 25% of the purchase price towards the purchase of a home in Arlington.  MIPAP assistance comes in the form of a deferred payment, no interest rate second trust loan.  The MIPAP loan can cover all closing costs not paid by the seller (including pre-pays), up to a maximum of three discount points (to reduce the interest rate on the first trust mortgage), and a portion of the down payment.
• Must be a “first time buyer” defined as applicants who have not owned a home within the past 3 years
• Property must be located in Arlington County
• Maximum purchase price: $362,790
• Maximum loan amount: $90,700
• Minimum down payment:  1% of the purchase price