HPAP: Your Key to Home Ownership

Aug 24

Home Purchase Assistance Program (HPAP) details can be found here. When using district and federal programs for home buying assistance, time is of the essence, and the sooner you start the clock, the better. So try to complete the HPAP class as soon as possible.

What is HPAP?

The Home Purchase Assistance (HPAP) program provides interest-free loans and closing cost assistance to qualified applicants to purchase single family houses, condominiums, or cooperative units. The loan amount is based on a combination of factors, including income, household size, and the amount of assets that each applicant must commit toward a property’s purchase. The loan is subordinate to a private first trust mortgage. NOTE: The Employee Housing Assistance Program (EHAP) is included in the HPAP briefing; when you complete the HPAP training, you complete EHAP requirements. As of 2017, eligible applicants can receive a maximum of $80,000 in gap financing assistance and an additional $4,000 in closing cost assistance. The HPAP 0% interest loan for borrowers with incomes below 80 percent of the area median income (AMI) is deferred until the property is sold, refinanced to take out equity, or is no longer their primary residence. Moderate-income borrowers who earn between 80 percent and 110 percent AMI will have payments deferred for five years with a 40 year principal-only repayment period.

Possible Assistance Provided

The maximum amount of HPAP assistance provided to very low- low- and moderate-income eligible households is $202,000. Closing cost assistance is provided separately and cannot exceed $4,000.

How Long Does HPAP Take?

The length of time it takes to complete the DC Home Purchase Assistance Program (HPAP) process can vary based on several factors. On average, the entire process might take anywhere from 45 to 90 days or more. Here's a general breakdown of the steps involved and the timeframes associated with each:

1. Application and Prequalification (Approximately 1-2 weeks): The initial application and prequalification process typically takes a couple of weeks. This involves gathering all the necessary documents, submitting your application, and undergoing the prequalification review by HPAP.
2. Homebuyer Education (1-2 weeks): Most HPAP programs require homebuyer education classes. These classes usually span over a few days or weeks, depending on availability. Completing the required classes can take around 1 to 2 weeks.
3. Property Search and Offer (Variable): The time it takes to find a suitable property and make an offer can vary widely. It might take a few weeks to several months, depending on the current housing market conditions and your specific preferences.
4. Loan Processing (Approximately 4-6 weeks): Once you have an accepted offer, the mortgage loan application and processing phase begins. This generally takes about 4 to 6 weeks on average. During this time, the lender will conduct a thorough review of your financials and the property's appraisal will be ordered.
5. Underwriting and Approval (1-2 weeks): After the loan is processed, it goes through underwriting for approval. This typically takes 1 to 2 weeks. The underwriter will review all documentation and ensure that all requirements are met.
6. Closing and Funding (Approximately 2-4 weeks): Once your loan is approved, the closing process begins. This can take around 2 to 4 weeks. During closing, all the necessary legal and financial documents are signed, and funds are transferred to complete the purchase.

It's important to note that these timeframes are approximate and can vary based on individual circumstances, the complexity of the transaction, and external factors such as the workload of the lenders and other parties involved. To get a more accurate estimate for your specific situation, it's recommended to consult with HPAP program officials, lenders, and real estate professionals who are familiar with the program and the local market conditions.

Requirements:

Be the head of the household and a first-time homebuyer.
Be a very low--to-moderate income resident, based on the Department’s standards.
Cannot have had ownership interest in any residential real estate within the three years prior to application.
The purchased home must be the borrower’s primary residence and must be located within the District of Columbia.
Possess a good credit rating.