First Time Home Buyer Virginia: Incentives, Programs and Grants

For most people, buying a house is the American dream. But, sadly, too many potential home buyers believe it is one that is completely out of their reach. The truth is that there are actually a number of incentives, programs, and grants available that can help a first time home buyer in Virginia bring their dream to fruition. So if you’ve been putting off buying a home because you don’t think you can qualify for a loan or because you believe that you need a boatload of money for a down payment, check out the following information. You might be surprised to learn that, yes, you can actually purchase a home in Virginia today.

Are There Any Programs that Can Help Me with My Down Payment? 

Discouraged because it seems like you’ll never be able to save up enough money for a down payment for your first home? Don’t be. Instead, check out the Down Payment Assistance (DPA) program, which is available through the Virginia Department of Housing and Community Development. If you qualify, this program can provide you with gap financing that can help pay for your down payment. To be eligible for this program:

• Your income must be at or below 80 percent of the Area Median Income (AMI).
• You must finish a home ownership counseling course.

Under certain circumstances, this program also provides up to $2,500 toward your closing costs.

Where Can I Find an Affordable Loan?

The Virginia Housing Development Authority has numerous home mortgage loans available for potential first-time buyers. To be eligible for one of these low, fixed-rate loans, you must:

• Be buying your first home. The exception is if the property is located in one of Virginia’s Areas of Economic Opportunity where the state is trying to encourage growth
•  Be credit-worthy
• Show proof of a stable income
• Meet the income and sales price limits

I’m a Public Servant. Are There Special Grants Available for Me?

Some county governments offer their full- and part-time employees home ownership grants. For instance, Loudoun County employees who want to purchase their first home can apply for a Public Employee Homeownership Grant Program (PEG). This grant is for $10,000 and must be used to purchase a house within Loudoun County. The best thing about this loan? Twenty percent of the loan is forgiven each year over a five-year period as long as you don’t sell or move out of the house you purchase through this program. And you must also remain employed by Loudoun County, as well. These loans are:

• On a first-come, first serve basis
• Available to employees with a gross household income that falls between 30 and 70 percent of the AMI

Other Virginia counties offer similar programs, but you will need to check the eligibility requirements of each, as they may differ.

Are There Cheaper or Lease-to-Own Homes Available for First-Time Buyers? 

Some counties in Virginia have set aside affordably priced as well as lease-to-own houses for first-time home buyers. For example, Fairfax County, which is one of the richest counties in the United States, offers townhomes and condominiums that are priced well below the sales price of similar housing in the same community for potential first time buyers. Of course, you must meet certain requirements, which include but are not limited to:

• Having a household income of at least $25,000 but that is below a certain limit set by the county.
• Having a credit score of 640 or higher
• No bankruptcies for at least two years and absolutely no foreclosures on your record

In addition, you must attend a first-time home buyers orientation and education classes, get a conditional loan approval and attend a group application session. Once you complete these steps, you will receive a Certificate of Eligibility.

Finally, there is a drawing and an open house for each of the homes that will be sold through this program. To be eligible to purchase one of these properties, you must attend the home’s open house with your Certificate of Eligibility and enter the drawing.

In Roanoke, residents can become first-time homeowners through a different type of program. The Roanoke Redevelopment and Housing Authority (RRHA) offers a Lease/Purchase Program to its low-to-moderate-income residents who live in RRHA Public Housing and Section 8 programs. The homes that are available through this program are brand-new. Interested candidates must:

• Earn at least $18,000 a year
• Demonstrate an excellent rental history
• Have an acceptable credit report
• Be able to purchase the house within the next three years

What if I’m Receiving Rental Vouchers? Are there Programs for Me?  

Yes. If you receive vouchers to help pay for your monthly rent, you might be able to qualify for the Homeownership Voucher Program, which was started by the United States Department of Housing and Urban Development (HUD). With this program, you can use your vouchers to help pay for a mortgage on your first home instead of having it go towards rent. You will, however, need to check with your local jurisdiction to see if they offer this program as it is available in some, but not all areas. Prince William County in Northern Virginia, for example, offers this program. Also, area housing authorities differ in the way they administer the program but, in general, to qualify, you must:

• Be purchasing your first home
• Be using rental-housing vouchers or have applied for the voucher program
• Meet a minimum income standard and have at least one adult family member who is working full time. You might also be able to qualify if one of your family members is elderly or has a disability.
• Complete a homeownership counseling program.

2 Point Highlight

The truth, however, is that there are a number of incentives, programs and grants available that can help a first time home buyer in Virginia bring this dream to fruition.

Twenty percent of the loan is forgiven each year over a five-year period as long as you don’t sell or move out of the house.