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Virginia may be for lovers, but it’s for homeowners, too. Over 67 percent of the state’s residences are occupied by their owners, according to 2022 U.S. Census figures. First-time homebuyers are essential to that trend.
Virginia Housing is a state-created not-for-profit organization that offers programs for repeat and first-time homebuyers, including loans, grants, education and other forms of assistance. Let’s break down what they offer.
Virginia Housing offers two 30-year, fixed-rate conventional loan programs:
The primary difference between the two programs is that the latter does not require the borrower to pay mortgage insurance, which is an additional cost on top of the monthly mortgage payment. Both loan programs provide first-time borrowers with up to 97 percent financing, and they can be paired with other programs that offer down payment assistance or a tax credit.
Borrower requirements:
Property requirements:
The Virginia Housing Plus Second Mortgage saves first-time homebuyers from having to come up with substantial funds out-of-pocket for a down payment. The program pairs an eligible Virginia Housing first mortgage — either a Virginia Housing Conventional, Conventional No Mortgage Insurance or FHA loan — with a Virginia Housing second mortgage.
The second mortgage is capped at 3 percent to 5 percent of the purchase price, depending on the borrower’s credit and what type of loan the first mortgage is, to cover the down payment. It is available to first-time homebuyers, but also buyers who are purchasing in a specially designated “Targeted Area.”
Borrower requirements:
Property requirements:
Virginia Housing’s Down Payment Assistance (DPA) grant provides qualified first-time homebuyers (or those buying in a “Targeted Area”) with up to 1 percent of the home’s purchase price to put toward a down payment. The borrower must use the grant funds in conjunction with a Virginia Housing Conventional, Conventional No Mortgage Insurance or FHA loan — and also meet all of the requirements of that first mortgage — in order to qualify.
Virginia Housing’s Closing Cost Assistance (CCA) grant reduces out-of-pocket expenses for first-time homebuyers (or those buying in a “Targeted Area”) seeking a VA loan or USDA loan. The maximum grant is 2 percent of the home’s purchase price, and borrowers can apply the money to closing costs, discount points, prepaid items and the VA funding fee or USDA guarantee fee. Like the DPA grant, the borrower must also meet all of the requirements of the first mortgage in order to qualify.
Virginia Housing’s Granting Freedom program provides up to $8,000 in grant funds for members of the military to make their homes more accessible. The grant is available to Virginia veterans or servicemembers living with a disability because of an injury sustained in the line of duty. The funds can help pay for modifications such as ramps or wider doorways, and apply to work done in both owner-occupied homes and rental units.
Through the Virginia Housing Loan Combo program, first-time homebuyers in Virginia can combine a Virginia Housing mortgage, down payment assistance grant and a free homebuyer education course into a single package.
Coming in early 2024, the Richmond Redevelopment and Housing Authority (RRHA) is launching a new homeownership initiative. This program is specifically for public housing residents and voucher holders. It’s proposed to offer closing cost and down payment assistance, paired with below-market interest rates and mortgage insurance relief for qualified buyers in Richmond.
On a national level, there are loans geared toward first-time homebuyers that Virginians can take advantage of. Some of the loans you can explore include:
Note that Virginia Housing offers all of these loan types at lower interest rates, which can be paired with closing cost and down payment assistance.
Once you’ve familiarized yourself with Virginia and national first-time homebuyer assistance programs, it’s time to research the ins and outs of buying a house in Virginia. Depending on where you live, you may have more access to resources. However, there may also be more competition in buying a home in the state’s more popular housing markets.
When you’ve informed yourself and are ready to move forward with buying a home, contact Virginia Housing to start the process of getting assistance.
