One of the first numbers looked at in mortgage approval assessments is the debt-to-income ratio, or DTI. For Qualified Mortgages, a backend DTI of 43% or lower is recommended, while conventional loans typically accept ratios between 36% and 45% (Consumer Financial Protection Bureau). In markets like Washington DC, where the median home price is high, this ratio is as crucial as the size of the down payment in determining approval.

The median sales price in DC has recently been around $695,000 based on the last three months (Redfin, 2026). According to Zillow, the average home value is $618,651, which has decreased by 4.2% over the past year. The difference between these two figures is due to the disparity between actual sales prices and estimated models, making it more realistic to budget based on actual transactions.

Based on this price, calculating down payments shows that 3.5% is $24,325, 5% is $34,750, 10% is $69,500, and 20% is $139,000. FHA loans allow for a 3.5% down payment with a credit score of 580 or higher, while a score between 500 and 579 requires a 10% down payment (fha.com). The principle that PMI is required for down payments under 20% and waived for those over 20% applies equally in DC.

A lower down payment reduces the initial entry burden but increases the loan principal and PMI, resulting in higher monthly payments. Conversely, putting down more than 20% reduces monthly burdens and total interest, but saving up that $139,000 can take time. Both options require consideration of income stability and savings rates. Additionally, many listings in DC are condos, which have separate HOA fees that need to be factored into the monthly holding costs along with the down payment size to see the actual burden.

The effective property tax rate in DC is 0.58%, meaning the annual median tax amount for a $724,600 home is around $4,180 (propertytaxrates.org, 2026). If you qualify for the Homestead Exemption, you can deduct $91,950 from the assessed value, reducing your actual burden. If moving from Virginia or Maryland, the tax rate systems differ, so budgeting based on your previous residence may lead to discrepancies. Notably, when comparing tax rates with Arlington, Virginia, or Montgomery County, Maryland, DC's rates are relatively lower.

The DC Open Doors program can provide up to 3% of the purchase price as an interest-free second loan, potentially covering the entire down payment, and it is available even to those who are not first-time homebuyers. The Home Purchase Assistance Program (HPAP) offers support for down payments and closing costs up to $202,000 based on income and household size, with repayment deferred for low-income households until the sale or refinancing (DCHFA). Receiving such assistance can reduce the down payment burden while minimizing initial cash outlay, which can also favorably impact approval assessments.

To increase approval rates, managing your credit score and lowering your DTI should be priorities. It's advisable to pay off existing credit card debt or student loans and to get pre-approved to clarify your budget range. Avoid new loans or job changes before closing, and keep a few months' worth of living expenses as reserves after closing for a more stable assessment. Interest rates also vary by credit score, with rates of 6.59% for scores above 780 and 6.91% for those in the 700s (themortgagereports.com, as of July 2026). To reduce this difference, lowering credit utilization and managing payment dates without late payments a few months before closing can be effective.

Areas with school districts preferred by Korean families tend to have higher prices in DC, so it's wise to compare school ratings with your budget. School district boundaries change frequently, so be sure to verify the assigned school before purchasing. This article is not investment or legal advice, and consulting a professional before any actual contracts is recommended.