Home Ownership Key: Down Payment Assistance for Teachers
Last week DC Public School (DCPS) teachers, administrators, and staff were notified that there’s a new down payment assistance program available to them called Landed.
Living in a high cost of living area can make home ownership difficult for teachers and other public servants. As someone who’s married to a DCPS teacher and friends with many others, I have personal experience with this.
I tried to register with Landed to get more information, but there’s an error on their real estate agent submission form and I reached out to them through email and instgram but haven’t hear back yet. While we wait to learn more, here are the details based on what’s publicly available:
If you have 10% down payment saved for a home, landed will match an additional 10% so you can reach 20% down payment. For example, if you’re buying a $500,000 home and have $50,000 saved for your down payment, Landed will match an additional $50,000.
This will allow the buyers to avoid private mortgage insurance (PMI) and have a lower monthly mortgage payment by putting more down.
Landed is not a non-profit and these funds are not a grant or gift. You will have to pay them back.
The match on your down payment is not a grant or a loan that will need to be paid back monthly. It will be due upon the sale of your home or after 30 years, whichever is first.
When you sell your home (or after 30 years), you will need to pay back the original amount that Landed contributed PLUS 25% of the increase in your home’s value. If your $500,000 home increased in value to $600,000, you would owe Landed $50,000 (their share of the down payment) plus $25,000 from the $100,000 increase in value. That’s $75,000 total.
If your home loses value, you need to pay back to original amount Landed contributed MINUS 25% of the decreased value of your home. If your $500,000 home decreased in value to $400,000, you owe Landed $50,000 (their share of the down payment) minus $25,000 (their share of the $100,000 in decreased value). That’s $25,000 total.
These funds will be paid at settlement so you hopefully won’t have to come up with the cash to pay them back. It will depend on your mortgage interest rate, how long you have owned your home, and other factors.
Here are a few more things to note:
Landed will provide up to $120,000. If you match that with $120,000 you’ve saved (I feel your eye rolls teachers) that’s a 20% down payment on a $1,200,000 house.
It doesn’t seem like there are any restrictions on where you can buy a home, meaning you could buy in DC, Maryland, or Virginia.
If you work with a real estate agent who isn’t part of Landed’s program you might owe a fee.
There is no mention of closing cost assistance, so keep in mind you will likely also need to have enough saved to cover your closing costs.
I’m sure more information will come out in the coming weeks and I’ll update this post as I learn more. In the meantime, send me an email to kerri@bestaddress.com with any questions.
