D.C.’s Loan Program Problems and the Dream of Home Ownership

The District’s loan program for first-time homeowners has good intentions: to provide second mortgages that make buying a home possible for low-income families. But a Washington Post investigation found nearly 20 percent of people participating in the program are behind on mortgages payments.

Owning a home is often viewed as a necessary step for entering the middle class. But foreclosures can send many families backward in their class-climbing. The black middle class was particularly affected by the foreclosure crisis, in part because African Americans have more of their wealth tied to home equity than whites do.

DeAngelo McDonald, a Metro bus driver and father of six who earns $61,000 a year, financed a $338,000 house in 2008, in part with a loan from the city, paying double what city loan officials had estimated he could afford. His three-bedroom home in Southeast is now in foreclosure.

“I was a first-time home buyer thinking that everything was on the up and up,” said McDonald, 48, who declared bankruptcy in 2009. “At any minute, we could be out on the street. It’s heartbreaking. It’s scary. I don’t know what could happen, especially with my kids.”

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