Many first-time homebuyers rely on programs like the Home Purchase Assistance Program (HPAP) to make their homeownership dreams possible. HPAP prioritizes people who are elderly, disabled, displaced, or with lower incomes with a goal of supporting economic mobility and financial growth.
In June, the Department of Housing and Community Development (DHCD) announced HPAP had run out of money. The abrupt announcement shocked lenders and applicants who had already invested in inspections and purchasing costs with the expectation that their deals would close.
Buyers – I heard and felt your devastation. I used HPAP to buy my first home. Buying is a complex feat under the best circumstances, let alone when the support you’re relying on disappears. I sent a letter to DHCD asking for short-term and long-term solutions, including:
- A plan to avoid this type of abrupt disruption in the future;
- A plan to make sure River East at Grandview (Talbert Street) homeowners would receive HPAP again after losing their homes; and
- A plan for implementing a $25,000 grant program for home repairs that Council passed last year.
In response, and to their credit, DHCD created a useful HPAP dashboard that they will update weekly, then daily, to provide transparency and predictability to buyers and lenders. At a joint hearing that I held with Chairman Mendelson on November 9th on the River East at Grandview (Talbert Street) issue, DHCD also committed to making sure River East residents can use HPAP funds again as a part of helping them recover.
Unfortunately, the Mayor’s response to the HPAP shortage also led to an overcorrection.HPAP funding running out early led to stress for potential buyers, but the solution I asked for was increased transparency, not adding more limits to who can receive HPAP funding. As some of you have already experienced, the Mayor added new restrictions on HPAP funding that are preventing residents on fixed incomes from accessing the program at all. Under her new policy, buyers can still use up to $202,000 in HPAP loans, but the HPAP loan must be 30% or less than the purchase price. This means that people on fixed incomes, like seniors, who rely on significant amounts of HPAP loans can’t participate because their “loan to value” amounts are higher than 30%. This is an overcorrection that goes against who HPAP is meant to prioritize and against the ways to increase Black homeownership. Further, the Mayor was not specific on the $25,000 grants for home repairs. DHCD said there was no demand for the grants, but they haven’t done outreach to make sure people know it’s an option.
HPAP money is going fast, which means more people are becoming first time homebuyers. I understand the desire to make sure the funds last as long and for as many people as possible. But excluding those buyers who the money is meant to help the most is not the right solution.
I have asked the Mayor to reconsider her new policy, and I’ll continue asking DHCD for clarity on the home repairs grants.
If you have challenges with the changes to HPAP or thoughts on how the program be better, please let me and my team know at firstname.lastname@example.org or (202) 727-8270.