Lower Income Homeownership Exemption Program (DC Tax Abatement)

Lower Income Homeownership Exemption Program (DC Tax Abatement) is down payment assistance for homebuyers in Washington, District of Columbia, administered by DC Office of Tax and Revenue (OTR), Recorder of Deeds / Real Property Tax Administration. Under D.C. Law 5-31 (D.C. Code 47-3502), qualifying lower-income owner-occupants are exempt from DC recordation and transfer taxes at purchase and receive up to a five-year abatement of real property taxes, beginning the October 1 after the deed is recorded. To qualify, total household gross income must fall under the published income limits (higher in Economic Development Zones) and the purchase price must not exceed $576,000. The benefit also extends, with certification, to non-profit housing organizations, shared-equity investors, cooperative housing associations, and community land trust transfers. Applicants file Form FP-420 with required income documentation when recording the deed. Exemption from DC recordation and transfer taxes at purchase. Up to 5-year real property tax abatement. Higher income limits in Economic Development Zones. Available for shared-equity and community land trust purchases. No repayment (tax exemption/abatement, not a loan). Funding comes from DC tax expenditure (forgone recordation/transfer tax and abated real property tax) under D.C. Law 5-31 / D.C. Code 47-3502.

Lower Income Homeownership Exemption Program (DC Tax Abatement) is forgiven after 5 years, so a homebuyer who stays that long does not repay it. Repayment is triggered by If household ceases to qualify, owner must notify OTR in writing within 30 days; exemption ends when eligibility lost. Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Lower Income Homeownership Exemption Program (DC Tax Abatement) is open to homebuyers who will live in the home as their primary residence. Residency requirement: Owner-occupant; must reside in property as principal residence. File Application FP-420 plus Claim for Exemption at recording; abatement application deadline September 30; must submit Settlement Statement, Sales Contract, and proof of household income; 5-year abatement begins Oct 1 after deed recorded; owner must notify OTR within 30 days if household ceases to qualify. Non-profit/co-op/SEF transfers require additional Part V certification. Gaps: no credit score, DTI, or %AMI figure published; income stated in flat dollar tables.

Lower Income Homeownership Exemption Program (DC Tax Abatement) limits household income to $128,160. The limit applies to total household income, not only the borrower’s. The program lists a maximum household size of 8. Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

Lower Income Homeownership Exemption Program (DC Tax Abatement) caps the purchase price at $576,000. Eligible property types include Single Family, Condo, and Cooperative. New construction is eligible. Manufactured homes are not eligible.

Lower Income Homeownership Exemption Program (DC Tax Abatement) serves homebuyers purchasing in Washington, District of Columbia.

Applications for Lower Income Homeownership Exemption Program (DC Tax Abatement) go through DC Office of Tax and Revenue (OTR), Recorder of Deeds / Real Property Tax Administration, which publishes the current terms and the application steps on its own site. Funds are reserved through File Application FP-420 (and Claim for Exemption from Real Property Recordation and Transfer Tax) at time of recording deed; abatement application deadline is September 30 of the tax year. Hey Prescott is not a lender and does not accept applications; this page describes the program so a homebuyer can take it to a lender or housing counselor.