Virginia First-Time Home Buyer Programs of 2021

By NerdWallet 
Edited by Amanda Derengowski

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Hopeful first-time home buyers in Virginia have access to state programs that can help them make a down payment or qualify for a home loan. For nearly 50 years, Virginia Housing (formerly Virginia Housing Development Authority, or VHDA) has worked with lenders throughout the state to make homeownership a reality for thousands of residents.

National first-time home buyer programs

Since you’re doing a bit of research, it can’t hurt to look into national programs aimed at potential home buyers with modest incomes. You’ll find options for loans with low or no down payments.

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

VHDA highlights and eligibility requirements

If you live in Virginia, VHDA programs offer first-time home buyers some unique benefits, ranging from down payment grants to federal tax breaks.


  • Down payment grants available.

  • 30-year fixed-rate loans.

  • Some programs allow zero down payment.

  • Many loan programs are eligible for federal tax credits.


  • Required credit score varies by program; lowest is 620.

  • Haven’t owned a home in the past three years (except in certain areas).

  • Maximum income and loan limits vary by home’s location.

  • The home must be your primary residence; no business use.

  • Applicants must complete homeownership education class.

VHDA first-time home buyer loan programs

Down Payment Assistance Grant

Best for:

Down payment assistance

What you need to know:

This is perhaps the most meaningful benefit offered by Virginia Housing. Qualified first-time buyers can receive up to 2.5% of a home’s purchase price to apply to a down payment — no repayment required. The grant is combined with a Virginia Housing loan, and household income limits are considered.

Granting Freedom

Best for:


What you need to know:

For military members or veterans with service-connected disabilities, this program offers a grant of up to $6,000 to pay for home modifications that increase accessibility, such as widening doorways and adding wheelchair ramps.

Mortgage Credit Certificates

Best for:

Tax credits

What you need to know:

Virginia Housing issues Mortgage Credit Certificates to qualified home buyers who receive a loan commitment through an approved lender. It’s a dollar-for-dollar federal tax credit that may reduce your tax liability. And it’s valid for the life of your loan, while the home remains your primary residence.

Virginia Housing Conventional

Best for:

Low down payment

What you need to know:

This program is for first-time buyers or homeowners looking to “move up.” The down payment can be 3% — even lower, with a Virginia Housing down payment grant. While this program requires a borrower to pay for mortgage insurance, the premium is discounted. You’ll need a credit score of at least 640 to qualify.

Virginia Housing Conventional No Mortgage Insurance (MI)

Best for:

Low mortgage insurance

What you need to know:

Identical to the Virginia Housing Conventional program in most respects, but you won’t have to pay mortgage insurance. That likely means your interest rate will be a tad higher. And your credit score needs to be slightly better, too: 660.


Best for:

Government-backed loans, low down payment

What you need to know:

FHA-backed loans are the go-to mortgage program for first-time home buyers. It seems Virginia Housing has made them even better with this program. The standard 3.5% FHA down payment can be brought down to as low as 1% with the state’s down payment assistance grant. A second mortgage is also available to help with a down payment. A minimum credit score of 620 is required.

USDA (Rural Housing Service)

Best for:

Rural borrowers

What you need to know:

USDA loans also offer zero down payments on homes in rural and suburban areas. Virginia Housing participates in a pilot program that allows the financing of existing manufactured housing up to 10 years old. USDA previously financed only new manufactured housing.

Summary: 2021 VHDA first-time home buyer programs

  • Down Payment Assistance Grant provides up to 2.5% of a home's purchase price to be used as a down payment.

  • Granting Freedom provides a grant of up to $6,000 for accessibility modifications for veterans with service-related disabilities.

  • Mortgage Credit Certificate for borrowers who want to reduce their federal tax liability.

  • Virginia Housing Conventional for a low down payment.

  • Virginia Housing Conventional No Mortgage Insurance (MI) for a low-down-payment loan with no mortgage insurance.

  • FHA for up to 99% financing with a credit score of 620 or above.

  • USDA loan for manufactured housing up to 10 years old.

Talking to a lender, preferably at least a couple, will get you started. Lenders affiliated with Virginia Housing know all the ins and outs and can help you navigate the process. Why talk to more than one? Because terms, interest rates and even customer engagement can vary from lender to lender. It’s satisfying to find someone you like to work with who also looks out for your best interests.

Visit for details on any Virginia Housing program. Here are lenders that participate in Virginia Housing loan programs.

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