Virginia First Time Home Buyer

Are you a first time home buyer looking to purchase a home in Virginia?  On this page you can learn about the different types of mortgage programs that are available to first time home buyers.  You may also view the different down payment assistance programs that are currently being offered in Virginia.

Virginia First Time Home Buyer Loans

Below are some mortgage programs that are available to first time home buyers.

Types of Mortgages:

• Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment.  If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI).  However, conventional loans also offer low down payment options, such as programs that only require 3% down.
• FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan.  The qualification requirements for FHA loans are much more lenient than conventional loans.  This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
• USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment.  These loans are intended for borrowers with low-to-moderate income.  In addition to not requiring any money down, you can also finance the closing costs into the loan.  This means you can essentially buy a home with no money out of pocket!
• VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment.  These loans are not available to the general public, but exclusively to military/veterans.
• Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan.  You can lookup the 2023 conforming loan limits for your county using this conforming loan limits lookup tool.  If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
• Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime or non-qm loan.  These programs are especially helpful to self-employed borrowers, and a variety of people with credit issues (such as low credit scores and/or a recent bankruptcy, foreclosure, or short sale).  Regardless of your situation, you may want to learn more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.

These are some of the options that are available to first time home buyers.  If you would like to get pre-approved for a mortgage, we can help match you with a lender that offers first time home buyer loans in Virginia.

Click here to get pre-approved for a mortgage

Virginia Down Payment Assistance Programs

First time home buyers in Virginia may be eligible to receive down payment assistance.  This includes programs offered throughout the entire state, as well as several locally offered programs.  You can learn more about these programs below.  If you would like some help checking your eligibility for down payment assistance, please fill out this form.  We will match you with a mortgage lender that specializes in helping first time home buyers find down payment assistance.

VHDA Down Payment Assistance Grant

The VHDa Down Payment Assistance Grant offers first time home buyers up to 2.5% in down payment assistance.  This assistance comes in the form of a grant, which means that it does not need to be paid back.

Program Requirements

• The highest DTI ratio allowed is 45%.
• You must meet the program income limits.
• The minimum credit score allowed is 620 if used with an FHA loan, 640 if used with a Fannie Mae Reduced MI mortgage, and 660 if used with a Fannie Mae No MI mortgage.  Please note, this program may NOT be used with a no down payment mortgage, such as a USDA or VA loan.

Want to learn more?  Visit the Virginia Housing Development Authority website.

HOMEownership DPA Program

This program offers up to 10% of the purchase price, and up to $2,500 in closing cost assistance.  In order to be eligible, you must meet the following requirements:

• You must be a first time home buyer, or have not owned a home in the last 3 years.
• Complete a homebuyer education course.
• Your household income must be at, or below 80% of the average median income.
• Contribute 1% of the home sales price (if your income is between 50%-80% of the median average).  If your income is below 50% of the area median average, then you only need to contribute $500 towards the purchase.
• You can purchase either a single family home, a townhome, condominium, or a 2 unit property (as long as you occupy one of the units, and you can rent out the other unit).

To learn more about this program, please visit the Virginia Department of Housing and Community Development website.

Regional Programs

Below are some down payment assistance programs offered exclusively in specific cities or counties in Virginia:

City of Alexandria down payment assistance

City of Arlington down payment assistance

City of Danville down payment assistance

Fairfax County down payment assistance

Henrico County down payment assistance

James City County down payment assistance

Loudoun County down payment assistance

Louisa County down payment assistance

City of Petersburg down payment assistance

City of Portsmouth down payment assistance

City of Roanoke down payment assistance

City of Richmond down payment assistance

Virginia First Time Home Buyer Tax Credits

The Mortgage Credit Certification (MCC) tax credit provides you an opportunity to reduce your tax bill, as well as enhance your home loan application by reducing your debt-to-income ratios.  How this works, is you can deduct up to $2,000 off your federal tax bill each year.  The MCC allows up to 50% of your annual interest to be eliminated (with the cap being at $2,000).  Some great news, is this can be used in addition to standard mortgage interest deductions!

Get Matched with a Mortgage Lender

A mortgage lender can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance.  If you would like some help finding a mortgage lender, we can match you with a lender that offers first time home buyer loans in Virginia.

Click here to get matched with a mortgage lender

First Time Home Buyer Questions 

Below are some of the most frequently asked questions about first time home buyer loans:

How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program.  USDA and VA loans do not require any down payment.  FHA loans only require a 3.5% down payment (and allow down payment assistance to be used).  Conventional loans typically require either 3% or 5% down.   The minimum down payment for a non-prime loan is usually at least 10% (or higher).

What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in.  There are maximum loan limits for each type of mortgage program which are set at the county level.  Conforming loan limits are the maximum loan amounts allowed for conventional mortgages.  FHA loans have their own loan limits.  This is not necessarily how much you can borrow though, but the maximum amount allowed in your location.  The amount that you can personal qualify for will be based upon your income, and how much debt you have.  For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.

Can I buy a home without a real estate agent?
It depends on your state and the type of loan program.  For some states, you must use an agent.  In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages.  However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.

Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges.  The minimum credit score required for an FHA loan is 500.  For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500.  Non-prime loans also do not have any waiting periods after a bankruptcy.

Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.

Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.

Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband.  The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.

How do I find out if I qualify for a mortgage?
It is easy to find out what mortgage programs you may qualify for.  We can match you with lender that offers free consultations, and they can help you get pre-approved (and also compare what options may be available to you).  To have a mortgage lender contact you, request to be matched with a lender.