Virginia First-Time Home Buyer Programs of 2023

Abby Badach Doyle
By Abby Badach Doyle 
Updated
Edited by Johanna Arnone

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Hopeful first-time home buyers in Virginia have access to state programs that can help them make a down payment, pay closing costs or qualify for a home loan. For more than 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.

Virginia Housing highlights and eligibility requirements

Virginia Housing programs offer first-time home buyers in Virginia helpful benefits, including down payment grants and federal tax breaks.

Program highlights

  • Down payment and closing cost assistance grants.

  • A conventional loan with 3% down and no mortgage insurance.

  • Offers government-backed loans (some with zero down payment) that can be combined with other Virginia Housing grants and loans.

Eligibility

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

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

  • Maximum income and loan limits vary depending on a home’s location and if you’re combining with a grant.

  • The home must be your primary residence.

  • Many loans require applicants to complete a free homeownership education class.

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Min. down payment 
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Virginia Housing first-time home buyer programs

Closing Cost Assistance Grant

Best for:

Closing cost funds you don’t have to repay

What you need to know:

This grant is eligible for home buyers who have a Rural Housing Service or Veterans Affairs loan through Virginia Housing. First-time buyers qualify, as well as repeat buyers who are purchasing in a designated Area of Economic Opportunity. The grant can cover closing costs up to 2% of your home’s purchase price and does not need to be paid back. Income and sales price limits apply.

Down Payment Assistance Grant

Best for:

Down payment funds you don’t have to repay

What you need to know:

Qualified first-time buyers can receive 2% to 2.5% of a home’s purchase price to apply to a down payment — no repayment required. The grant must be combined with an eligible Virginia Housing loan, and household income limits are considered.

Granting Freedom

Best for:

Service-disabled veterans

What you need to know:

For service members or veterans with service-connected disabilities, this program offers a grant of up to $8,000 to pay for home modifications that increase accessibility, such as widening doorways and adding wheelchair ramps.

Virginia Housing Conventional

Best for:

Low down payment

What you need to know:

This program is for first-time buyers or repeat homeowners. The down payment can be 3% or even lower, when combined 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 

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. To qualify, your credit score needs to be slightly better: 660.

Virginia Housing Plus Second Mortgage

Best for:

Down payment or closing cost assistance

What you need to know:

When combined with an eligible first mortgage from Virginia Housing, this 30-year fixed-rate loan can cover the upfront cost of your down payment. For borrowers who meet credit qualifications, it can also cover some or all of the closing costs. Unlike the Closing Cost Assistance Grant or Down Payment Assistance Grant, this is a loan, so you do have to pay it back. However, there’s no prepayment penalty. Income and other eligibility requirements apply.

FHA

Best for:

Government-backed loans, low down payment

What you need to know:

FHA loan qualifications are more lenient than those for conventional loans. Through Virginia Housing, credit scores as low as 620 may qualify. While that’s a stricter requirement than some FHA lenders, Virginia Housing makes it easy to package an FHA loan with additional grants and loans from the state. The standard 3.5% FHA down payment can be brought down to as low as 1% with Virginia Housing’s down payment assistance grant, or to 0% when combined with the Plus Second Mortgage.

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. A USDA loan through Virginia Housing can be combined with the Closing Cost Assistance Grant. 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.

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 VirginiaHousing.com for program details, or use its online lookup tool to find a Virginia Housing lender by ZIP code.

First-time home buyer programs near Virginia

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 lower 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 home buyers

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.

Mortgage loans from our partners

New American Funding - PURCHASE logo
Check Rate

on New American Funding

New American Funding

4.0

NerdWallet rating 
New American Funding - PURCHASE logo

4.0

NerdWallet rating 
Min. credit score 
580

Min. down payment 
3%

Check Rate

on New American Funding

Rocket Mortgage - PURCHASE logo
Check Rate

on Rocket Mortgage

Rocket Mortgage

4.0

NerdWallet rating 
Rocket Mortgage - PURCHASE logo

4.0

NerdWallet rating 
Min. credit score 
620

Min. down payment 
1%

Check Rate

on Rocket Mortgage

NBKC - PURCHASE logo
Check Rate

on NBKC

NBKC

4.5

NerdWallet rating 
NBKC - PURCHASE logo

4.5

NerdWallet rating 
Min. credit score 
620

Min. down payment 
3%

Check Rate

on NBKC

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