Buying your first home in Virginia can feel out of reach when the down payment and closing costs stack up. If you’re wondering how other buyers make the numbers work, you’re not alone. The good news is that Virginia offers practical programs that can lower upfront costs and improve affordability. In this guide, you’ll learn what help exists, who typically qualifies, how these programs pair with common loan types, and the simple steps to get started. Let’s dive in.
Virginia Housing at a glance
Virginia Housing, often called VHDA, is the statewide agency that supports first-time and moderate-income buyers. Programs focus on two goals: reducing the cash you need to close and improving long-term affordability.
- Down payment assistance (DPA): Often a second loan or grant that helps with your down payment and sometimes closing costs.
- Mortgage Credit Certificate (MCC): A federal tax credit that can reduce your annual federal income tax based on part of the mortgage interest you pay.
- Special mortgage options: Conventional and government-backed loans offered through participating lenders, with competitive rates and flexible guidelines.
- Local add-ons: Some Virginia cities and counties offer extra assistance that can stack with state programs, depending on rules.
You can explore current offerings and limits on the official Virginia Housing website. Start with the Homebuyers and Programs pages on the main site at Virginia Housing.
Who qualifies and what to expect
Many programs define a first-time buyer as someone who has not owned a primary residence in the last three years. Some options also allow repeat buyers under specific limits. Always confirm the exact rules for the program you plan to use.
Most assistance has income and purchase price limits that vary by county or metro area and household size. These numbers change over time, so you should always verify current limits for the property’s location.
Homebuyer education is commonly required. Plan to complete an approved class before closing so it does not slow your timeline. If you need a starting point, you can connect with a HUD approved housing counselor for education and budgeting help.
Credit and underwriting follow the rules of the loan you choose. FHA, conventional, VA, and USDA each have different guidelines and insurance or guaranty features. Lenders can also add their own requirements, sometimes called overlays.
Pairing assistance with your loan
The right pairing depends on your credit profile, target price, location, and whether you qualify for specific benefits like VA or USDA. Here is how these combinations usually work.
VHDA DPA with conventional loans
- Common and flexible. DPA reduces your upfront cash and may be structured as a second lien.
- Conventional loans generally require private mortgage insurance if you put less than 20 percent down, which affects your monthly payment.
- A VHDA-approved lender will line up the first mortgage and DPA to meet investor and program rules.
VHDA DPA with FHA loans
- Many VHDA DPA options can pair with FHA financing, which allows low down payments and flexible credit in many cases.
- FHA requires mortgage insurance, which you should include in your monthly budget. Learn more in the FHA loan basics.
- Lender overlays may apply, so ask about credit score and debt-to-income requirements.
Assistance with VA loans for eligible veterans
- VA loans already offer no down payment for many buyers. DPA or local aid may help with closing costs if allowed by the program.
- Always confirm compatibility with both your lender and the program. Review the VA home loan program to understand core benefits.
Assistance with USDA loans for eligible rural areas
- USDA loans serve eligible rural properties and can offer no down payment.
- Some assistance may be used for closing costs if allowed. Check program rules and lender requirements. Explore USDA Single-Family Housing Programs for basics.
Mortgage Credit Certificate (MCC)
- An MCC does not change your loan terms. It reduces your federal income tax liability each year you qualify, using a credit for a portion of the mortgage interest you pay.
- You usually must request the MCC at loan origination. If approved, you claim the credit when you file taxes using IRS Form 8396.
DPA, MCC, and your monthly budget
Down payment assistance can be structured as a grant, a forgivable loan, or a second mortgage that is deferred or repayable. The structure matters for your cash flow.
- Grants or forgivable loans may not add a monthly payment but can carry conditions like occupancy or time-in-home rules.
- Second liens may add a monthly payment now or later. Some become due at sale or refinance. Ask your lender to outline repayment triggers.
- MCC is not a monthly payment reducer. It can increase your tax refund or reduce your tax due, which may free up cash at tax time.
Be sure to ask your lender to show a side-by-side estimate with and without assistance. That way you can see your cash to close, monthly payment, and long-term costs in a clear format.
Step-by-step plan to use Virginia programs
Use this checklist to move forward with confidence.
Confirm your eligibility basics
- Check if you meet the first-time buyer definition for your target program.
- Look up current county income and purchase price limits for Virginia Housing programs on the Virginia Housing site.
Complete homebuyer education
- Finish an approved class early so it does not delay your loan approval.
- If you need options, find a HUD approved housing counselor or explore courses through NeighborWorks.
Choose a VHDA-approved lender
- Ask which VHDA DPA and MCC options they offer and which pair with FHA, conventional, VA, or USDA.
- Confirm required credit score, debt-to-income ratio, and any lender overlays.
Get preapproved for both the loan and assistance
- Request preapproval that includes the first mortgage and any DPA and MCC you plan to use.
- Ask for a detailed estimate showing down payment, closing costs, seller credits, gift funds, and net cash to close.
Shop within program limits
- Verify that each property meets the program’s price and property eligibility rules.
- Keep an eye on HOA fees or condo policies that may affect underwriting or affordability.
Apply and provide documentation
- Submit pay stubs, W-2s or tax returns, bank statements, ID, education certificate, and program forms.
- Respond quickly to lender requests to keep your closing on track.
Close and claim benefits
- Review closing documents to confirm the assistance structure and any second liens.
- If you have an MCC, keep the certificate and file IRS Form 8396 each year you qualify.
Keep records and follow program rules
- Save all program paperwork, including any occupancy or resale restrictions.
- Before refinancing or selling, review repayment triggers with your lender.
For additional budgeting tools and plain-English explanations, the CFPB homebuying checklist is a helpful companion as you plan.
Common mistakes to avoid
- Skipping the education class until the last minute. Some programs require completion before funding, which can delay closing.
- Assuming you can add an MCC later. You generally must request it at loan origination.
- Overlooking county limits. Income and purchase price caps vary by location and change over time.
- Not asking how DPA is structured. Know whether it is a grant, forgivable loan, or second lien and when repayment could be due.
- Ignoring lender overlays. Two lenders can give different answers based on their internal rules. Ask direct questions.
How T&G helps first-time buyers
Buying your first home is exciting, but it works best with a clear plan and a steady guide. Our team helps you focus on homes that fit your budget and your program’s rules. We coordinate with VHDA-approved lenders, structure offers that consider seller credits, and keep your timeline on track through inspection, appraisal, and closing.
You make the decisions. We provide the local insight, contract strategy, and communication that help you move forward with confidence. If you want a calm, practical path to your first home in Northern Virginia, we are here for you.
Ready to take the next step? Connect with T&G Real Estate Advisors to talk through your goals and start a tailored first-home game plan.
FAQs
What is Virginia Housing and how does it help first-time buyers?
- Virginia Housing is the statewide agency that offers down payment help, closing cost support, and MCC tax credits through approved lenders to make buying more affordable.
How do income and purchase price limits work in Virginia?
- Limits vary by county or metro area and household size, and they change over time, so you should verify current numbers for the property’s location on Virginia Housing’s site.
Can I combine a Virginia down payment program with an FHA loan?
- Yes, many VHDA DPA options can pair with FHA financing, but lender and FHA rules apply, including mortgage insurance and potential lender overlays.
How does a Mortgage Credit Certificate help a Virginia buyer?
- An MCC is a federal tax credit that can reduce your tax bill each year based on a portion of your mortgage interest, claimed via IRS Form 8396 after closing.
Do I have to repay Virginia down payment assistance?
- It depends on the program; assistance may be a grant, a forgivable loan, or a second lien that is deferred or repayable, with repayment often triggered by sale or refinance.
Can veterans use Virginia programs with a VA loan?
- Often yes for closing cost help if the program allows it, but you must confirm compatibility with your lender and review VA loan rules.
What documents will I need for a VHDA application in Virginia?
- Expect income proof, tax returns, bank statements, ID, a homebuyer education certificate, and any program-specific forms requested by your lender.
When should I complete homebuyer education for Virginia assistance?
- Complete it early in the process, since many programs require the course to be finished before you can receive funding.
Do seller credits or gift funds affect Virginia DPA eligibility?
- They can, since lender and program rules limit sources and amounts, so ask your VHDA-approved lender to review how these will interact with your assistance.
