One of the biggest hurdles many people face in the path to homeownership is saving money for the down payment and closing costs. These costs add up quickly, and first-time homebuyers often have the most trouble coming up with the money. If you are ready to purchase a home but lack the funds to do so, check out one of Virginia’s numerous assistance programs.
- Virginia Housing Development Authority (VHDA) FHA Plus Loans Combined Assistance
A unique program offering both first and second mortgages to qualified borrowers, the VHDA FHA Plus Loans Program is a great way to to get assistance with a down payment and closing costs. These VHDA-financed mortgages are all based on a 30-year repayment schedule and feature fixed-rate interest. A 1 percent overall contribution is required from the buyer. All second mortgages are are calculated based on the borrowers’ credit scores, with the lowest second mortgages being 3.5 percent of the home’s value and the largest 5 percent.
- VHDA Down Payment Assistance Grant
No repayment is necessary for the VHDA Down Payment Assistance Grant. This program gives buyers additional assistance with their VHDA-approved loans; Fannie Mae loan recipients are offered up to 2 percent of the purchase price, and FHA loan recipients are eligible for up to 2.5 of the purchase price. Again, borrowers are expected to contribute 1 percent of their own funds toward the purchase price of their new home.
- Virginia Department of Housing and Community Development (DHCD) Virginia Individual Development Accounts (VIDA) Program
Qualified participants contribute money to their savings accounts and watch it grow with the VIDA Program. For every $1 that is put into a savings account toward the down payment of a home, the VIDA program matches it with $8, with a max of $4,000. To supplement the money, participants are offered training and support to make the most of their home-buying experience.
- Housing Opportunities Made Equal of Virginia (HOME) Down Payment Assistance
A forgivable form of assistance, the HOME Down Payment Assistance Loan offers up to $10,000 for down payments and closing costs. Participants who are able to stay in their new home for 5 or more years do not have to worry about repayment.
Affordable First Mortgages
- VHDA Fixed Rate Loans
When using the VHDA Fixed Rate Loan Program, borrowers can choose from three loan types: VA, FHA and Rural Housing Services (RHS). Each loan comes with its own set of specifications, allowing borrowers to choose the option that is correct for their situation. VA loans cover up to 97 percent of the purchase price of the home and require no down payment; FHA Loans also cover up to 97 percent of the purchase price, and they allow borrowers to fees into the loan and finally, RHA loans cover up to 100 percent of the appraised value of a home for qualified borrowers.
- Union Mortgage Group STAR Portfolio Loan Program
Get up to $300,000 in financing with as little as zero percent down with the Union Mortgage Group Steps Toward Achieving Results (STAR) Loan Program. All of the loans in this program are 30-year fixed-rate loans with no required mortgage insurance, for extra cost savings. Borrowers with credit scores greater than 700 enjoy financing at 100 percent of the home’s cost.
- USDA Single Family Guaranteed Loan Program
Low- and moderate-income borrowers benefit the most from the USDA Single Family Guaranteed Loan Program. This program is designed to help lenders provide borrowers with up to 100 percent USDA financing for the construction, improvement or purchase of a principal residence in a rural area of Virginia.
- United States Department of Agriculture (USDA) Single Family Direct Loan Program
The USDA Single Family Direct Loan Program was created to help low- and very low-income buyers in rural areas purchase safe housing. Through this program, borrowers enjoy up to 100 percent loan-to-value financing with no down payment, lower than average interest rates and extended periods for repayment. In fact, for extreme low- income situations, borrowers have up to 38 years to repay their loan.
- VHDA Mortgage Credit Certificate (MCC) Program
Open to first-time homebuyers purchasing their principal residence only, the VHDA MCC Program helps over the long term by providing mortgage interest tax breaks. Borrowers in this program qualify for a 20 percent annual tax break on their federal income tax for the entire life of the loan. Because the buyers pay only 80 percent annually – with the other 20 percent taken care of by the MCC – significant savings accrue over time.
Make the most of your financial situation, and find the program that best fits your needs. With Virginia’s multitude of homebuyer assistance programs, there is sure to be something that fits your needs. Once you are approved, contact us to begin the search for your next home sweet home.