First-Time Homebuyer Programs in Virginia: Your Path to Homeownership

Are you a first time home buyer in Virginia? Looking for down payment assistance in Virginia?  Fortunately, there are a range of first-time homebuyer programs in VA. These programs help people buy homes by offering grants and loans, favorable loan terms, and educational programs.

This article will go through the programs that both the Virginia Department of Housing and Community Development (DHCD), and Virginia Housing offer.

In this guide, we'll explore key down payment assistance programs and grants available in Virginia, including the HOMEownership Down Payment Assistance Program (DPA), Virginia Individual Development Accounts (VIDA), and Virginia Housing's Down Payment Assistance (DPA) Grant, and Plus Second Mortgage programs.

DHCD HOMEownership Down Payment Assistance Program (DPA)

What It Offers

The Homeownership Down Payment Assistance Program (DPA) is designed to help first-time homebuyers cover the initial costs of purchasing a home. This program provides financial assistance that can be used toward your down payment, making it easier to get into your new home.

Per the DHCD, “An income-eligible homebuyer may receive up to 10 percent or 15 percent (within the established approved areas by DHCD) of the sales price, plus up to $2,500 to pay for the cost of closing (e.g. attorney’s fee, title insurance, taxes as needs demand).”

Key Advantages

1. Financial Help: The DPA program offers substantial assistance to help with down payments, which can ease the burden of buying a home.

2. Educational Support

Eligibility Requirements

- First-Time Buyers: You must be buying a home for the first time.

- Income Requirements: There are specific income limits you need to meet, which vary based on household size and location.

- Credit Score: You’ll need a credit score of 620 or higher with at least 3 lines fo credit open.

DHCD Virginia Individual Development Accounts (VIDA)

What It Offers

The Virginia Individual Development Accounts (VIDA) program is a unique savings initiative that helps individuals save for major expenses like buying a home. VIDA accounts are matched savings accounts, meaning that, just like in your Foyer account, for every dollar you save, the program matches a portion of it, boosting your total savings.

Key Advantages

1. Matched Savings: VIDA provides matching funds for your savings, which can significantly increase the amount you have available for a down payment or other home-related expenses. They match $10 for every $1 you contribute, up to $10,000 in match value.

2. Financial Education: Participants receive valuable financial education and counseling to help manage their finances effectively.

Eligibility Requirements

- Income Limits: You must meet specific income criteria, typically set below a certain percentage of the area median income.

- Savings Commitment: You need to commit to saving a portion of your income in a VIDA account.

Virginia Housing Down Payment Assistance (DPA) Grant

What It Offers

The Virginia Housing Down Payment Assistance (DPA) Grant provides first-time homebuyers with a grant of up to 1% of the home’s purchase price to use toward their down payment. This grant is used alongside a Virginia Housing first mortgage to help reduce the amount needed upfront.

Key Advantages

1. Grant Funds: You can receive up to 1% of the purchase price, which helps lower the down payment requirement.

2. Combination with First Mortgage: The grant works with Virginia Housing Conventional, Conventional No Mortgage Insurance, or FHA loans.

Eligibility Requirements

- First-Time Homebuyers: You must be a first-time buyer or have not owned a home in the past three years.

- Property Requirements: The home must meet the first mortgage requirements, be located in Virginia, and fall within Virginia Housing loan limits.

- Homebuyer Education: You need to complete a homebuyer education course.

How to Apply

Apply through a Virginia Housing-approved lender, who will help you navigate the application process and ensure you meet all the program’s requirements.

Virginia Housing Plus Second Mortgage

What It Offers

The Virginia Housing Plus Second Mortgage program helps first-time homebuyers by offering a second mortgage to cover the down payment. This program reduces the amount of money you need to bring to closing and is available in conjunction with a Virginia Housing first mortgage.

Key Advantages

1. Second Mortgage: This program provides a second mortgage up to 3% to 5% of the home’s purchase price, depending on your credit and the type of first mortgage.

2. Reduced Out-of-Pocket Costs: It helps reduce the amount you need to save for a down payment.

Eligibility Requirements

- Borrower Requirements: You need to have 1% of the home’s purchase price available for closing costs or reserves, meet Virginia Housing income limits, and complete a homebuyer education course.

- Property Requirements: The property must meet the first mortgage requirements, be located in Virginia, and generally be no more than two acres (though exceptions may apply).

How to Apply

To apply, work with a Virginia Housing-approved lender. They will help you determine if you qualify and guide you through the application process.

Conclusion

Virginia provides a range of first-time homebuyer programs designed to make homeownership more achievable and affordable. From down payment assistance through the Homeownership DPA program to matched savings with VIDA and grants and second mortgages from Virginia Housing, numerous resources support you on your journey to owning a home.

If you're an aspiring homeowner, be sure to join Foyer to plan and save for your first home with confidence.

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