To secure a mortgage in Washington DC in 2005, homebuyers followed these steps: First, obtain a credit report and ensure a FICO score of at least 620, as lenders prioritized creditworthiness. Second, secure pre-approval from a DC-licensed mortgage lender, which required documentation like pay stubs, tax returns, and bank statements. Third, identify a property through local real estate agents, noting DC’s strict zoning laws and historic preservation districts. Fourth, negotiate terms with a lender offering conforming loans (≤$359,650 in 2005) or jumbo loans for higher-priced homes. Fifth, budget for closing costs (typically 2-5% of the loan) and DC-specific fees like transfer taxes (1% of the sale price) and recordation taxes (0.65%).

The process was shaped by 2005’s conforming loan limits and DC’s regulatory environment. FICO scores below 620 resulted in higher interest rates or denial, as 78% of DC borrowers had scores above 630 that year (Urban Institute, 2006). Lenders favored fixed-rate mortgages (65% of DC loans) due to stable rates pre-subprime crisis. DC’s median home price was $385,000, requiring a 20% down payment ($77,000) for conforming loans, though FHA or VA programs reduced this to 3-5%. Closing costs averaged $8,000-$15,000, influenced by DC’s 1.5% transfer tax and $1,000+ title insurance. Jumbo loans exceeded $359,650, with rates 1-2% higher than conforming loans. The DC government’s 2005 Home buyer assistance program (HBAP) provided $25,000 grants for first-time buyers, covering 6.5% of DC’s 28,000 annual home sales. These factors collectively structured DC’s 2005 mortgage market, balancing federal guidelines with local affordability challenges.