2024 Virginia First-Time Homebuyer Programs and Loans

Buying your first home is a huge milestone — but for many, the financial hurdles can be tough to overcome. Oftentimes, saving for a down payment is what ends up putting the dream on hold for several years.

The good news is that there are first-time homebuyer programs in Virginia that are designed to help new buyers achieve their dreams of homeownership through education, down payment assistance and other benefits.

First-time homebuyer programs in Virginia

Aspiring Virginia homebuyers have a variety of programs to help them complete the purchase of their first home. If you meet the criteria, you can get assistance with down payments, closing costs and even savings for a home.

• HOMEownership Down Payment and Closing Cost Assistance Program
• Fairfax County First-Time Homebuyers Program
• Down Payment Assistance Grant
• Virginia Individual Development Accounts (VIDA) Program
• Virginia Housing Closing Cost Assistance Grant

As you learn about each program, you may want to create a list of homebuyer questions you have to ask a lender before you apply.

HOMEownership Down Payment and Closing Cost Assistance Program

This grant program is offered by the Virginia Department of Housing and Community Development to assist first-time homebuyers who earn up to 80% of the area median income (AMI) with the purchase of a home. The homebuyer must live in the home as their primary residence, and they may receive as much as 10% to 15% of the sales price, plus $2,500 toward closing costs.

Requirements

• Meet first-time homebuyer qualifications (never owned a home, or have not owned a home in the last three years)
• Get homeownership counseling from a HUD-certified agency and counselor
• Complete a HUD-certified homebuyer education course through a Virginia Housing or Neighborworks® certified course
• Income can’t exceed 80% of the area median income (AMI)
• Minimum credit score of 620
• Debt to income ratio of 43% or below
• Pay at least 1% of the home sales price from personal funds if income is between 50% to 80% of the AMI), or $500 if income is less than 50% of the AMI

Fairfax County First Time Homebuyers Program

The Fairfax County First-Time Homebuyers (FTHB) Program was launched in 1978 to help low- to moderate-income homebuyers find affordable homes via the Affordable Dwelling Unit (ADU) Program. Eligible buyers are offered homes that are priced to sell lower than other homes in the area.

Requirements

• Must be a first-time homebuyer (not owned a home in the last three years)
• You must earn at least $25,000 in annual income — plus, there’s also an income cap depending on the number of people in your household:
  • 1 person: $74,500
  • 2 people: $85,150
  • 3 people: $95,800
  • 4 people: $106,450
  • 5 people: $114,950
  • 6 people: $123,500
  • 7 people: $132,000
  • 8 people: $140,500
• A minimum credit score of 620
• Must be able to put down at least 2%, cover closing costs and have at least one month of savings
• If there are people in the household aged 55 and older, you may be eligible for special offerings

Down Payment Assistance Grant

The Virginia Housing Development Authority’s down payment assistance grant doesn’t have to be repaid — however, it’s only available to homebuyers who purchase with eligible Virginia Housing loans.

Requirements

• Qualify as a first-time homebuyer (repeat buyers may be eligible if purchasing in “areas of economic opportunity”)
• Your home loan must be a bond FHA or conventional loan from Virginia Housing
• Must meet Virginia Housing’s income limits
• Be within Virginia Housing’s allowable sales price and loan limits, which vary by area

Virginia Individual Development Accounts (VIDA) Program

The Virginia Individual Development Accounts (VIDA) program helps people who are saving for a down payment fast track their purchases. If you qualify, VIDA will match each dollar you save with $8, up to $4,000 in match. Participants also get training and support. To apply, you’ll have to work with an intermediary in your service area.

Requirements

• Must be a Virginia resident and U.S. citizen or legal resident
• Must be at least 18 years old
• Applicants must fall within VIDA income guidelines and household net worth limits, which vary depending on county and number of people in household
• Must be able to show earned income
• Program must be completed within six to 24 months

Virginia Housing Closing Cost Assistance Grant

This grant helps homebuyers with out-of-pocket closing costs, up to 2% of the home price. Funds can be used for closing costs, as well as fees for USDA Rural Development or VA loans.

Requirements

• Be a first-time homebuyer (repeat buyers in areas of economic opportunity can also qualify)
• Loan must be either a USDA RD or VA loan from Virginia Housing
• Must meet Virginia Housing’s income limits
• The home price and loan amount must be within Virginia Housing’s limits

Virginia first-time homebuyer qualifications

Applying for a first-time homebuyer program in Virginia is a fairly straightforward process. In some cases, there may be a homebuyer education course or counseling required, so be sure to give yourself ample time to research, check your eligibility and apply for programs.

Steps to apply for a first-time homebuyer program

Step 1: Check your credit score.First-time homebuyers programs tend to have lenient credit score requirements, but you should look at your score to see where you stand. For instance, two of the programs outlined above require a 620 minimum score. The average credit score among Virginia residents was 722 in 2023, so if you’re in that ballpark, you should have no problem qualifying.

Step 2: See if there are income guidelines and if you meet them.In many cases, first-time homebuyer programs are geared toward helping people with lower incomes. Virginia programs with this requirement will have a chart that specifies the income limits based on your area and the number of people in your household.

Step 3: Find out if there are sales price or loan amount limits.Depending on the program, there may also be a maximum home price or home loan amount that you’ll need to stay under to be eligible for the assistance.

Step 4: Find a program that aligns with the type of home loan you are getting.First-time homebuyer programs may be earmarked for borrowers of a particular type of loan. Your mortgage lender should be able to help you identify any potential first-time homebuyer programs that you can qualify for.

Step 5: Get a mortgage preapproval.In order to pursue a first-time homebuyer program, you should have your mortgage financing lined up first.

 Learn more about getting a mortgage preapproval.

Step 6: Determine who to contact and how to apply.Most first-time homebuyer programs in Virginia have instructions on their websites about who to contact or how to get the process started. In some cases, you may have to reach out to a nonprofit organization in your area.

Step 7: Schedule required counseling sessions or sign up for necessary coursework.If you’re required to work with a housing counselor or take a homebuyer course, you’ll have to sign up or get in touch to schedule a session.

Understanding Virginia first-time homebuyer down payment assistance

There are a few different types of first-time homebuyer down payment assistance. In some cases, you may be able to use more than one type to save more. Here are a few options to investigate.

Deferred second mortgage

A deferred second mortgage is essentially a second home loan that you can use to pay your closing costs and down payment when you buy a home. What makes them appealing is that you won’t have to pay them back right away. In some cases, you may not have to pay them back until you sell or refinance the home.

Forgivable second mortgage

Similar to the deferred second mortgage, a forgivable second mortgage can be even more beneficial — you might not have to pay it back at all if you remain in the home for a certain period of time.

Grant

Unlike a second mortgage, grants to help with down payments or closing costs are a form of gift aid, meaning they won’t have to be paid back. There may be some conditions that need to be met in order to qualify for a first-time homebuyer grant, such as income limits or housing price limits.

Mortgage credit certificate

A mortgage credit certificate (MCC) is a homebuyer assistance program administered by state and local Housing Finance Agencies (HFAs) that provides lower-income homebuyers with a tax credit for mortgage interest that they paid. There are usually income and purchase price limitations, and the recipient must live in the home as their primary residence.

Keep these things in mind about DPA programs

In some cases, you may be required to repay your down payment assistance if you don’t remain in the home as your primary residence for a required amount of time. For example, if you try to sell the home or refinance it before a set period, the full amount of assistance will have to be returned.

How much of a down payment do I need to buy a house in Virginia?

The amount of down payment required to buy a home in Virginia will depend on a number of factors including the total price of the home, the percentage of that price you want to put down and the type of home loan you’re getting. According to Lending Tree’s latest FTHB study, the average down payment for Virginia homes is $35,095.

Can I qualify for down payment assistance in Virginia?

Your ability to qualify for down payment assistance in Virginia will depend on a number of factors. In most cases, these programs are reserved for homebuyers who have lower incomes or fall within specific income limits. You’ll usually need to be a first-time homebuyer or at least have not owned a home within the last three years. Other possible requirements may be having a certain minimum credit score, residing in the commonwealth of Virginia and being at least 18 years of age.

How do I apply for Virginia first-time homebuyer down payment assistance?

If you think you may qualify for a Virginia first-time homebuyer down payment assistance program, you can start the application process by contacting the housing agency to find out what’s required. Your mortgage lender may also be able to assist you with the application process. In some cases, you may have to speak with a housing counselor or take a required homebuyer education course.

 Here’s what you need to know about the process of applying for a home loan.

Other first-time homebuyer loan programs

Conventional loans

First-time homebuyers who have strong credit and ample income may be well suited for a conventional loan. These nongovernment loan programs tend to have competitive mortgage rates and favorable terms, but some more stringent requirements.

FHA loans

FHA loans are government-backed loans that are popular with first-time homebuyers since they only require a 3.5% down payment and have flexible eligibility requirements. For instance, people with credit scores in the 500s may be able to qualify. Since they are government-backed, FHA-approved lenders are able to offer competitive FHA interest rates and terms.

VA loans

VA loans are guaranteed by the U.S. Department of Veterans Affairs and available to veterans and military service people, as well as their spouses. They offer low interest rate and closing costs, and borrowers are not required to make a down payment.

USDA loans

Guaranteed by the U.S. Department of Agriculture (USDA), USDA loans are aimed at lower-income homebuyers who wish to purchase a home in a qualified rural area. Borrowers do not have to make a down payment.

What are the best first-time homebuyer loans?

As a first-time homebuyer, there are a lot of factors to consider including which type of home loan is best for you. There really is no one-size-fits-all loan — everyone’s individual financial circumstances vary, and each type of loan has its pros and cons. It really comes down to your credit score, income, debt, how much you’ve saved for a down payment (if any), the type of home you wish to buy and if you meet any special eligibility requirements.

Conventional loans (if you can qualify for them) usually allow for the most flexibility as far as the property you’re buying. If you have credit challenges, an FHA loan could provide a home ownership path, while a conventional loan may not. Anyone with a military affiliation should look into VA loans, since they have numerous benefits. USDA loans have a lot of perks as well, but they’re only available for select buyers in select areas.

Home price trends in Virginia major areas

U.S. house prices rose 6.49% between the fourth quarter of 2022 and the fourth quarter of 2023, according to the Federal Housing Finance Agency’s (FHFA) House Price Index (HPI). In Virginia, according to the FHFA’s latest data, the price increase over the same period of time was slightly higher at 7.32%.

When looking at specific metro areas of Virginia, however, one metro in particular saw the highest housing price increases: the Richmond metro area, home to the commonwealth’s capital. There, home prices were up 9.30%. In another major metro — Virginia Beach, Norfolk and Newport News — the 6.76% increase was closer to the national average. The same was true for the Washington-Arlington-Alexandria metro area, where the prices went up 6.62%.

Is there a first-time homebuyer tax credit in Virginia?

Virginia Housing used to have a mortgage credit certificate program — but since it’s been suspended as of May 1, 2023, there are currently no tax breaks. There’s also no longer a federal tax credit for first-time homebuyers.

What are the current mortgage rate trends in Virginia?

While rates for fixed and adjustable rates have bounced around since the start of the year, current rates are close to where they were earlier in the year.