Getting a mortgage for a home is critically important and securing an affordable rate even more so. If you are a resident in Virginia, the VHDA (Virginia Housing Development Authority) offers 30-year, fixed-rate mortgage loans to first-time and qualifying, repeat Virginia homebuyers. Additionally, if you’re a first-time borrower in the “Commonwealth”, you may be eligible for Mortgage Credit Certificate (MCC) tax credits, which allow you to claim a dollar-for-dollar tax credit during a given year.
These VHDA financing options can benefit homebuyers in Loudoun, Fairfax, Prince William, Arlington, Alexandria and various other surrounding communities. With recent changes in the program, more buyers may now qualify for these loan options in Virginia.
VHDA, or Virginia Housing, exists to help Virginia residents “attain quality, affordable housing”. In addition to home loans, they “provide financing for apartment communities and neighborhood revitalization efforts”, offer homebuyer classes, and “help people with disabilities and the elderly make their homes more livable”.
Benefits for potential homebuyers include:
Little to no money down
Virginia Housing offers low-to-no money down on a variety of loan programs. Several of these loans can be paired with grants to minimize the amount of cash a buyer is required to bring to closing.
Increased Income Limits
Couples earning up to $145,000 annually can now qualify for VHDA loan programs.
The income limit for households with 3+ people has been increased to $170,000 annually.
According to the 2020 data release of the U.S. Census Bureau’s American Community Survey, the median household income in Fairfax, Prince William, and Arlington counties is below that limit, suggesting the pool of eligible borrowers may be larger than you think.
Increased purchase limits
As a result of an ultra-competitive market in 2021, we saw the price of homes skyrocket. In a market where buyers were already struggling with low inventory, the previously lower purchase limits on VHDA loans, reduced the number of homes available to VHDA buyers even further..
VHDA borrowers can now shop for homes with a sales price of up to $550,000. Financing options up to 101.5%
Buyers with a 680 credit score (and above) can finance up to 1.5% more than the sale price of a home. The program combines a first mortgage up to 96.5% with a 5% second mortgage (at a 30-year fixed rate) for a total of 101.5% financing.
Lower than a 680? Buyers with a 620 credit score can still qualify for 100% financing!
With zero down required, this could eliminate the need for cash-to-close. In the current “correcting” market VHDA loans are an excellent option to curb the cost of higher mortgage rates by leaving more money in your pocket ( and in the economy).
If any of these programs caught your attention, let’s chat — even if you weren’t eligible for VHDA financing previously you might qualify now! I’m happy to answer your questions about the current market and connect you with a lender partner who can walk you through the ins-and-outs of VHDA’s loan programs and any other loan programs that might be a fit for your home buying needs.