The City of Tacoma is offering a new DPA Program and the NSP DPA program is no longer available as of September 1st. Under this new program, we will assist eligible first-time homebuyers with up to the FHA required down payment (currently 3½%) to purchase a home in any of the eligible areas of Tacoma;
see map. Example: Purchase Price: $150,000 x 3.5% = $5,250 in DPA assistance. NOTE: Buyer must contribute at least $1,000 toward the purchase price. If you have questions, contact Gary Tiedeman at (253) 591-5219 or e-mail
gtiedema@cityoftacoma.org.
The DPA funds can only be used for the purchase and owner-occupancy of a house that is currently owner occupied or vacant, single family dwelling in an eligible area of Tacoma ~ see attached map. Rentals occupied by tenants who will be displaced or have recently been displaced within the past 90 days can not be considered for a DPA loan. House must be purchased at or below the current appraised value; an appraisal within the past 60 days.
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Maximum Qualifying Income |
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Maximum Loan Amount |
The maximum down payment assistance loan amount will be the current FHA required down payment; currently 3½%. The DPA funds can only be used for down payment and closing costs. The borrower must pay at least $1,000 toward the purchase price.
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All document requirements remain the same as our regular down payment assistance programs; ratios of 40% front (PITIMI) and 50% back (total of all monthly payments); and borrower must be a first-time homebuyer (not have owned a home for the past three years) and must invest at least $1,000.00 of their own money. The DPA loans will have a 30 year term at 0% interest with no payments; due at the end of 30 years or when the purchaser no longer occupies the home as their primary residence.
We require 10 business days to process a “Complete” DPA application from the time we have all the documentation. Incomplete applications will not be processed until all required documents are received.
1. Borrower must be a first-time homebuyer; not have owned a home in the past three years.
2. Borrower must have been approved by a lender for the primary mortgage prior to applying for DPA funds.
3. Borrower must meet all federal and local requirements.
4. House must pass the Housing Quality Standards (HUD 52580) by a certified inspector.
5. DPA loans will not be made in conjunction with an FHA 203k or any other purchase/rehab loan. Home must pass the HQS inspection prior to funds being committed. (#4 above)
6. The selling price must be no greater than a recent appraisal (within 60 days of closing).
7. The availability of funds is not guaranteed. The City of Tacoma and the Tacoma Community Redevelopment Authority (TCRA) reserve the right to terminate programs at any time when funds are no longer available. While every effort will be made to give adequate advance notice, it is difficult to predict exactly when available funds will be expended.
When evaluating applications for down payment assistance, the following factors and formulas will be used:
1. Homebuyer's annual household income for the HOME/DPA program must not exceed 80% of the published median income for the area (see chart), adjusted for household size. Annual income is defined as the adjusted gross income anticipated by all adults (age 18 and over) in a household during the 12 months following the effective date of determination.
2. The mortgage payment to income ratio shall not exceed 40% as determined by the mortgage payment, including principal, interest, property taxes, homeowner's insurance and mortgage insurance (PITIMI), divided by the household's gross monthly income.
3. The Affordability Index shall not exceed "1" as determined by the mortgage payment, including principal, interest, property taxes, homeowner's insurance and mortgage insurance (PITIMI), divided by 40% of the household's gross monthly income.
4. The total household monthly payment(s) to income ratio shall not exceed 50% as determined by the total recurring monthly payments, including PITIMI for the proposed mortgage(s), all revolving installment debt and child /spousal support payments (if continuing for 3+ years), divided by the household's gross monthly income.
If you have questions, contact Gary Tiedeman at (253) 591-5219 or e-mail gtiedema@cityoftacoma.org.