They say that "Virginia is for lovers." Whether that's true or not is up to the residents of that state, but there are more than 8 million who call Virginia home. It ranks as the 12th largest state in terms of population and the 35th largest in terms of total area. Yet like any state, first time home buyers in Virginia face challenges in these tough economic times if they lack the financial resources needed to purchase their first homes. Fortunately, there are a good number of programs designed specifically for this purpose.
Some first time home buyer programs in Virginia are offered by way of low interest loans. Other programs combine the low interest loans with extra assistance for paying closing costs and down payment. If you are a first time home buyer in Virginia your best bet is to ask your real estate agent or your mortgage lender about programs in your area. They should have all of the up-to-date information you need at the time you apply for your mortgage.
Virginia Housing Development Authority
The Virginia Housing Development Authority (VHDA) is a quasi-public organization formed by the Legislature in 1972. Although the Authority has the responsibility of administering safe for all housing to all Virginia residents, the main thrust of its activity is centered around helping first time home buyers and low income earners. The organization is completely self-funded through the sale of bonds and other securities. To date they have assisted nearly 175,000 first time home buyers.
First Time Home Buyer Loans
Currently the VHDA only administers one type of assistance for first time home buyers. That assistance comes by way of a low interest loan carrying with it certain eligibility requirements. These loans can be made as FHA, VA, or RHS loans. Interest rates will depend on the buyer's income, the area where the home is being purchased, and other conditions that may apply at the time of purchase. Conventional and FHA loans under this program offer a low down payment, while the VA and RHS loans require no down payment.
FHA Plus
The FHA Plus mortgage is a specialty product offered to eligible first time home buyers classified as low income. It offers the same 30-year fixed-rate mortgage along with a secondary loan providing assistance with closing costs and down payment. Eligible borrowers will not be required to contribute any of their own money up front as long as they meet program qualifications. The secondary loan can range between 3.5% and 5% of the total sales price.
The VHDA provides home buyer education courses free of charge as part of both of their loan programs. It's not clear whether taking the courses is required for eligibility, but there's a strong possibility it is. If so it should be included in the list of requirements you're presented with at the time of your loan application. Generally these courses are only a few hours long and fairly easy to complete.
Additional Local Programs
It's not uncommon for cities and counties to offer their own first time home buyer assistance programs in order to encourage housing development or restore areas suffering from blight. Below is a list of such programs taken from the HUD website. Keep in mind that local and county programs will have their own restrictions in addition to any state restrictions that might apply. Be especially aware that you may be required to live in your purchased home for a significant amount of time in order to be eligible.
- Arlington County Moderate Income Purchase Assistance Program
- Loudoun County Down Payment and Closing Cost Assistance Program (DPCC)
- Norfolk HOME Program
- Portsmouth The Center for Community Development Affordable Housing for First Time Homebuyers (FTHB)
- Richmond Direct Homeownership Assistance Plus (DHAP)
- Richmond Keystone Program Direct Homeownership Assistance (DHA)