Every address in the District is easy to finance by location. What makes DC different are its rules: two taxes on every sale, a tenant's right to buy before an owner sells, a higher tax rate on vacant houses, rent stabilization and a rental license. This page walks through what each one does to a flip or a rental, then our lending partners' terms.
Our lending partners' underwriting guidelines look for property within about 45 to 60 minutes of a metro area of 200,000 people or more. Every address in the District sits in the middle of one of the largest metro areas in the country, so that test is met everywhere from Anacostia to Chevy Chase. The lot rule, two acres or less, and the value floor, $100,000, are also easy here.
What decides a DC deal instead are rules no other place has: two taxes on every sale, a tenant's right to buy, a vacant property tax, rent stabilization, and a rental license. Each one belongs in the numbers before you make an offer.
DC charges a deed recordation tax and a deed transfer tax on every sale. Each is 1.1 percent of the price on residential transfers under $400,000, and 1.45 percent of the entire amount at $400,000 or more. By custom the buyer pays recordation and the seller pays transfer.
On a flip you are the buyer and then the seller, so you pay one of each. Buy for $550,000 and sell for $800,000: about $7,975 in recordation tax going in and $11,600 in transfer tax coming out, $19,575 in all. That is before commissions, financing and renovation. Put it in the first line of your numbers, not the last.
DC's Tenant Opportunity to Purchase Act, known as TOPA, gives tenants of many rental properties the right to be offered the chance to buy before the owner sells to anyone else, with notice periods and deadlines that can add weeks or months to a sale. The rules differ for multifamily buildings and single-family homes, and a 2018 change narrowed the rights for many single-family rentals, but not all.
For an investor buying an occupied property, TOPA is a timeline and title question. Confirm with a DC real estate attorney whether the seller has complied, or whether the property is exempt, before you commit to a closing date. For a lender, an unresolved TOPA question is a title problem, so expect it to be asked.
DC applies much higher property tax rates to buildings classified as vacant or blighted than to occupied homes. A flip sits vacant by design, so this matters. Exemptions exist, including for some properties under active renovation with the right permits, but they have to be claimed and kept current.
Before you close on a vacant DC house, find out how it is classified today, what it takes to qualify for an exemption during your renovation, and how long the exemption lasts. A tax bill at the vacant rate on a project that runs long can take a real bite out of the profit.
Rent stabilization. DC's rent stabilization program covers a large share of units in buildings built before 1976, with exemptions that include some small landlords. It limits how much the rent can rise each year, so check a building's status before you project rents.
A rental license. DC requires a basic business license to rent out residential property, with an inspection. Budget time for it before the first tenant.
A DSCR loan qualifies a rental on its rent, which in DC can be strong. Our lending partners' DSCR program runs from $75,000 to $2 million at up to 80 percent of value, with rates from 5.99 percent on the program page. Remember that the lender counts the full property tax in the payment, so use the post-purchase tax figure.
The District is not on the list of six jurisdictions where our lending partners cap leverage at 50 percent, so standard terms apply.
Fix and flip and bridge loans: from $50,000, up to 100 percent of cost but no more than 70 percent of after-repair value, with a 600 minimum credit score. Standard pricing under the underwriting guidelines is 12.99 percent and 2.99 points. The 10.99 percent starting rate is available after two loans have been paid off in good standing with our lending partner; a first-time borrower should expect to start above it and earn the way down.
Construction loans: $100,000 to $3 million on non-owner-occupied single-family homes, from 8.5 percent.
Loans close in an entity such as an LLC, and every owner of 30 percent or more personally guarantees the loan. Terms change, so we confirm them for your property before you commit.
Yes. The District is one of the places our lending partners finance, and every DC address sits inside one of the largest metro areas in the country. The property must be non-owner-occupied investment property with an after-repair value of at least $100,000.
Each is 1.1 percent of the price on residential transfers under $400,000 and 1.45 percent on the entire amount at $400,000 or more. By custom the buyer pays the recordation tax and the seller pays the transfer tax, so on a flip you pay one going in and the other coming out.
The Tenant Opportunity to Purchase Act gives tenants of many DC rental properties the right to be offered the chance to buy before the owner sells to someone else. Rights differ for multifamily buildings and single-family homes, so check TOPA with a DC real estate attorney before you contract to buy any occupied property.
Yes. DC applies much higher property tax rates to buildings classified as vacant or blighted than to occupied homes. Exemptions exist, including for some properties under active renovation with permits, so make sure your project qualifies and is registered correctly, because a flip sits vacant by design.
Yes, for many older rental buildings. DC's rent stabilization program covers a large share of units built before 1976, with exemptions that include some small landlords. Check a building's status before you buy, since it limits how much the rent can rise.
Yes. DC requires a basic business license for residential rental housing, which comes with an inspection process. Plan for it before you market a DC rental.
Holding a DC rental? Our two free landlord books compare what a rental costs to carry across the states.
Answer these and your deal goes to our lending partner's team, who will contact you about whether it is fundable and on what terms. By sending it you agree to your details being shared with them. Investment property only — our lending partners do not finance a home you will live in.
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Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.
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