DC First Time Homebuyer Program vs DC Lower Income Tax Abatement Program: What proof of income documents do I need to provide to the title company?

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The District of Columbia offers several homebuying programs, including the popular DC Tax Abatement program and the DC First-time Homebuyer Recordation Tax Reduction program.

We’ve noticed sometimes homebuyers get these two programs confused when it comes to household and documentation requirements.

Here we break down the household and income document distinctions for DC Tax Abatement and the DC First-time Homebuyer Recordation Tax Reduction program.

DC First-time Homebuyer Program (Recordation Tax Reduction)

  • 1. Household: Uses income of all household members and purchasers (grantees) listed on the deed. Even if the grantee does not intend to live in the property, DC will use his or her income.
    • a) Ex. Father is on deed to the property with Son as purchasers, but the Father will not be living in the property. DC will use the Father’s income to determine qualification.
  • 2. Proof of Income Documents: A copy of the most recent year’s filed tax return, (1040), for each household member AND persons listed on the Deed. The tax return must show the Federal Adjusted Gross Income.

    • Persons in Household Income*
      1 $158,760
      2 $181,440
      3 $204,120
      4 $226,800
      5 $244,980
      6 $263,160
      7 $281,340
      8 $299,520

    DC Tax Abatement (Lower Income Homeownership Exemption)

  • 1. Household: Uses income of all household members only. Thus, individuals that are listed on the Deed as grantees and who will NOT be occupying the property as a household member are not required to report income.
    • a) Ex. Father is on deed to the property with Son as purchasers, but the father does not intend to live in the property. DC will not use the father’s income to determine qualification.
  • 2. Proof of Income Documents: A copy of the most recent year’s filed tax return, the most recent years w-2, and the two most recent paystubs for all household members over 18. If Self-employed, a notarized Profit and Loss statement for current income and previous year’s income tax returns is required.

    • Persons in Household Income*
      1 $66,900
      2 $76,440
      3 $85,980
      4 $95,520
      5 $103,200
      6 $110,820
      7 $118,500
      8 $126,120

    * Deemed accurate at the time of publication. Contact us for more information.

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