First Time Buyer Incentives in the DC Metro Area

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:


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

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