Think you don’t have enough money to buy a house? Actually, you do.

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It is typical for real estate agents to suggest that buyers put at least 20 percent down when buying a home, but not everyone has that kind of cash on hand. I find that many Millennials, young professionals and first-time homebuyers — particularly in the metro D.C. area — make a great salary, but because they’re young, they haven’t had that much time to save a great deal of money. However, this doesn’t preclude you from purchasing a home.

Read: Most Millennials in D.C. can’t afford to buy a home (Curbed DC)

Down payment assistance programs can turn owning a home from a dream into a reality. There are grants, nonprofit organizations and lenders that can help with down payments based on a buyer’s credit score and income. These programs are not necessarily designed only for low-income people, but rather individuals who just don’t have a down payment saved up yet.

Click here to see all of the Virginia and D.C. Homeownership Programs available via the U.S. Dept. of Housing and Urban Development. Here’s the link to see the programs offered in other states. 

To see if you qualify, lenders will check your income, monthly expenses/debts and credit history in order to assess how much of a risk you pose to them in terms of your ability to repay the debt. It’s always encouraged do to as much as you can to minimize your debt and increase your credit score in order to obtain the lowest interest rate possible for borrowing money. Lenders have the ability to conduct “what if” scenarios to see how much your credit score would improve if you reduced your debts to a certain amount.

Instead of having a conventional loan (which requires 20 percent down), you are likely to use an FHA loan, which requires only 3.5 percent down. You will have to pay Private Mortgage Insurance (PMI), which is a kind of insurance policy on your mortgage loan. However, the IRS considers PMI as home mortgage interest, and therefore, may be tax deductible each year.

In Virginia, there is the Virginia Housing Development Authority (VHDA) Mortgage Credit Certificate, which offers a dollar-for-dollar credit against your federal taxes equal to 20 percent of the annual mortgage interest you pay. Your income and the price of the home you buy have to be below a preset limit to qualify for the credit, which vary by location.

There’s also the Virginia Dept. of Housing and Community Development Downpayment Assistance (DPA), Fairfax County’s First-Time Homebuyers Program, Virginia’s First-Time Home Savings Plan and D.C.’s Open Doors.

Click here to read UrbanTurf D.C.’s First-Time Primer: Virginia’s Home Buyer Assistance Programs.

In D.C., there is also the Homestead Act.

From Federal Title & Escrow Company: The DC Office of Tax and Revenue increased the Homestead Deduction benefit from $69,100 to $70,200 for those DC residents who own and occupy their property as their principal residence. This results in an annual property tax bill reduction of $596.70.

Per the DC Office of Tax and Revenue, in order to qualify for the deduction, the homeowners must:

  • Submit an application with the Office of Tax and Revenue;
  • Occupy the property, and the property must not contain more than 5 dwelling units (including the unit occupied by the owner); and
  • Use the property as their principal residence

Check out this calculator on to get a quick estimate on what you might be able to afford.

Also: How much home can I afford? Find that magic number here 

Disclosure: I am not a mortgage lender. For more specific and detailed information about loan programs, contact a loan officer. Don’t have a loan officer? Let me know, and I’ll send you contact information for a number that I work with on a consistent basis and trust. *NOTE: I do not receive any kind of financial benefit from any referrals I send. 

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