Buying your first home is exciting, though a bit daunting. If you finance your first home by taking advantage of the many loan programs available to you, you can be comfortable with your purchase for many years. For many first-time home buyers, the biggest challenge is how to finance the purchase. First-time buyers in Virginia can be assured that they have a wide range of financing programs with very favorable terms.
What Is A First-Time Home Buyer?
If you have never owned a home, you are considered a first-time home buyer. Some first-time buyer loan programs also deem you a first-time buyer if you have not owned your principal residence within the past three years. You may also qualify for first-time home buyer status if you buy property in specific areas targeted for redevelopment. If you are buying a property in a rural area, you may be eligible for a USDA loan, which also requires nothing or little down.
First-Time Home Buyer Programs in Virginia
As noted above, Virginia offers a nice array of mortgage loan programs and grant money for first-time buyers. Some of the loan programs require no down payment. Some of the loans are available to buyers with less than stellar credit scores. All of the first-time buyer loans in Virginia have maximum income limits, sales price limits, and loan amount limits. These limits vary based on where the prospective home is located. Here is an overview of some of the Virginia programs that may be available to you.
Virginia Housing Conventional
This loan program is available to first time buyers and eligible repeat buyers trying to “move up.” You need to have a minimum credit score of 640. With this loan program, buyers need to be able to pay a 3% down payment. You can reduce the down payment to 1% if you qualify for a Virginia Housing DPA Grant. It can be structured to give you an affordable monthly payment. It requires mortgage insurance, but at the lowest cost possible. With this loan, you may also be eligible for other helpful loan programs, such as Virginia Housing’s Plus Second Mortgage, Virginia Housing’s Down Payment Assistance grant (DPA), and Mortgage Credit Certificate (MCC).
Virginia Housing Conventional No Mortgage Insurance
Mortgage insurance can make monthly payments a struggle. With this program, first time buyers and repeat buyers can avoid mortgage insurance. You will need to pay 3% down (or 1% down with Virginia Housing DPA Grant) and have a more affordable monthly payment than most other government or conventional loan programs. As a result, you may be able to afford a larger home. For this loan, you will need a credit score of at least 660.
You may also be eligible for Virginia Housing’s Plus Second Mortgage, Virginia Housing’s Down Payment Assistance grant, and Mortgage Credit Certificate.
A Virginia FHA loan is insured by the Federal Housing Administration. You will have to pay 3.5% down (or 1% with a Virginia Housing DPA Grant), but you can qualify if your credit score is at least 620. With this loan program, you may also be eligible for Virginia Housing’s Down Payment Assistance grant, Virginia Housing’s Plus Second Mortgage, and Mortgage Credit Certificate.
Virginia Housing Plus Second Mortgage
This fantastic loan program can eliminate the need for a down payment and can eliminate the need to have funds at closing. It also can help keep your total monthly mortgage payment affordable. It is available to first-time buyers and certain repeat buyers. It can also be paired with the Mortgage Credit Certificate program.
Under this program, buyers can have a second mortgage with a 30-year fixed rate. You can actually borrow 1.5% more than the sales price. It is available to buyers who are purchasing a property in a Federal Targeted Area.
Virginia Down Payment Assistance Grant
As its name implies, this program reduces the amount of funds buyers need for a down payment. The down payment is often the biggest financial hurdle that first time buyers face. This grant makes funds available to buyers to help meet down payment requirements, and buyers do not need to repay amounts received under the grant. In some cases, the grant funds allow buyers to pay a larger down payment, which reduces the amount they will have to borrow and thus reduces their monthly payments. For additional benefits, this grant program can be paired with the Mortgage Credit Certificate.
Virginia Closing Cost Assistance Grant
With grant money used for closing costs, first time buyers can reduce or eliminate their out-of-pocket costs for closing. This grant can also be paired with a Mortgage Credit Certificate.
Mortgage Credit Certificate
While this program is not a loan program, it is worth mentioning as a way a first time buyer can lower the overall costs of homeownership. This program works by lowering the amount of federal income taxes first time buyers may owe. When used with a Virginia Housing first mortgage product and an approved Virginia housing lender, first-time buyers will get a tax credit, which can be taken for the life of a loan and for as long as the home is the buyer’s principal residence.
Reach Out To Fairfax Mortgage Investment For More Info On First Time Home Buyer Programs In Virginia
Get help with financing your Virginia home and make your dream a reality. If you are a first-time home buyer in need of a loan, contact the mortgage experts at Fairfax Mortgage Investment to learn about all of the home loan programs that are available to you.