Mortgage

First Virginia Residence Purchaser: Applications and Grants for 2021

What You Should Know About Buying a Home in Virginia

Property prices have skyrocketed in the Old Dominion. And that can often put pressure on first-time home buyers.

Thankfully, if this is your first time buying a Virginia home, there is plenty of help out there. This ranges from advice on building owner training to cash grants or loans to help you with the down payment. Ready to start?

Check your eligibility to buy a home in VA. Start here (08/13/2021)

In this article (continue to …)

Overview of Home Buyers in Virginia

Average home prices in Virginia rose 16.6% between May 2020 and May 2021. Of course, once you become a homeowner, rising property values ​​will actually help you as you build equity faster.

But the surge in home prices can make saving for a down payment feel like wading through molasses. So read on for help with your down payment (and possibly your closing costs as well).

Virginia Home Buyer Summary

Average home sale price in VA
$ 367,200

Minimum down payment in VA (3%)
$ 11,020

20% down payment in VA
$ 73,440

Average number of credit points in VA1
717

Maximum VA Grant for Homebuyers2
$ 40,000 + (Virginia DHCD)

Down payment amounts are based on the last available average home sale price in the state. A “minimum” down payment is assumed to be 3% less than a conventional mortgage with a minimum credit rating of 620.

If you are eligible for a VA loan (supported by the Department of Veterans Affairs) or a USDA loan (supported by the U.S. Department of Agriculture), you may not require a down payment at all.

Check your eligibility to buy a home in VA. Start here (08/13/2021)

Initial Loans for Homebuyers in Virginia

If this is your first time buying a Virginia home with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for personal mortgage insurance (PMI).

Of course, only a few first-time buyers have saved enough for 20 percent. But the good news is you don't need that much. By far not.

Borrowers can often move into a new home as little as 3% or even 0% with one of these low down payment loan programs:

Conventional 97 – From Freddie Mac or Fannie Mae. 3% down payment and at least 620 credits. The mortgage must be within the local compliant credit limits. You can usually stop paying mortgage insurance after a few yearsFHA loans – Supported by the Federal Housing Administration. 3.5% down and a credit score of at least 580. But you are looking for mortgage insurance until you refinance, move to another type of mortgage, or pay off your loanVA loan – For veterans and service members only. A zero deposit is required. The minimum credit score varies by lender, but is often 620. No ongoing mortgage insurance upon completion. These are arguably the best mortgages available. So apply when you are eligibleUSDA loan – For low to middle income people who shop in designated rural areas. Zero deposit required. The creditworthiness requirements vary depending on the lender, but often 640. Low mortgage insurance ratesVirginia Department of Housing and Community Development – May include competitive interest rates and deposit assistance. More information below

All of these first-time home buyer programs, with the exception of traditional loans, require you to purchase a primary residence. This is a home that you will live in full time (not a second home or investment).

You also need to decide which type of mortgage you want: a fixed rate mortgage or a variable rate loan.

Fixed-rate mortgages have a fixed rate and monthly payment that never changes. Variable rate loans may be cheaper to start with, but you run the risk of your rate and mortgage payment rising later.

If you are unsure which program to choose for your first mortgage loan, your lender can help you find the right deal based on your finances and your home purchase goals.

Find the best first-time buyer loan for you (August 13, 2021)

Programs for first-time home buyers in Virginia

There is no shortage of assistance programs for first time home buyers in Virginia. You may be eligible for counseling, educational courses, mortgages, and / or Down Payment Assistance (DPA) programs. The latter are often supplied by a local supplier in your city, county, or non-profit organization in your area.

Two of these organizations provide nationwide support for potential homebuyers:

That Virginia Department of Housing and Community Development (Virginia DHCD)
Virginia housing (formerly Virginia Housing Development Authority or VHDA)

Regardless of which provider you choose, you must meet a few eligibility requirements. Everyone can make their own rules. However, there are some general guidelines that you can expect:

Income Limits – Your household income should generally not be more than 80% of your regional median income (AMI)

Since every set of rules is different, it is important to research what each provider has to offer to find out which one suits you best.

Virginia Housing offers you the option of downloading a handy e-booklet (PDF) in English or Spanish that describes the programs in detail.

Grants for First Time Home Buyers in Virginia

Virginia DHCD's Down Payment Assistance Program does not provide direct home purchase grants. But it offers conditional.

If you are eligible, you may be eligible for a scholarship that you will never have to repay as long as you stay home for a certain number of years.

If you borrow up to $ 14,999, you must be resident for five years. And you will have to repay the full amount if you withdraw earlier

The highest grants are only available in places known as "high-cost areas" or "chronically economically depressed". Please see the link above for details.

Virginia Housing doesn't let you borrow as much as Virginia DHCD does. It usually offers 2% – but sometimes 2.5% – of the purchase price of your next home. But that's a real grant. So there are no residence requirements. Once you have the money, you can keep it.

You can also obtain a Mortgage Loan Certificate (MCC) from Virginia Housing, which is "a dollar for dollar (tax credit) on your federal income tax liability." And: "The annual loan is 10% of the annual mortgage interest you pay."

Check your eligibility to buy a home in VA. Start here (08/13/2021)

Buy a home in the major cities of Virginia

Unlike most states, house prices in Virginia's three largest cities are actually below the national average. And prices in these cities have risen less rapidly than elsewhere in the Old Dominion.

So this is good news for first time home buyers in Virginia. But the numbers are still pretty daunting when you're saving up for a down payment. So check out local down payment and graduation grant programs if you could help.

First time home buyer in Virginia Beach

The average list price in Virginia Beach in June 2021 was $ 314,000, according to Realtor.com. That was 4.8% more than in the previous year. So prices and house price inflation are lower than the state average.

If you want to buy a home at this average price, your down payment options can be between the following options:

$ 9,420 for 3% deposit$ 62,800 for 20% deposit

The City of Virginia Beach also has its own deposit support program. It states, “Individuals may be eligible for down payment assistance or, if a veteran is seeking a VA loan, a graduation grant.” Visit the link above for more information.

First time home buyer in Norfolk

In June 2021, the median list price for a Norfolk, VA home was $ 249,900, according to Realtor.com. That was 8% more than in the previous year.

If you want to buy a home at this average price, your down payment options can be between the following options:

$ 7,770 for 3% deposit$ 51,800 for 20% deposit

The City of Norfolk and the Norfolk Redevelopment and Housing Authority (NRHA) have a down payment assistance program called the NRHA HOME program, which is very similar to Virginia DHCD.

This is a similarly generous loan (rather than a grant) that will be given out over the years. For example, if you borrow less than $ 15,000, you owe nothing after five years because the entire amount was waived during that period.

However, there is one important difference between the two programs. Because at Virginia DHCD, you would have to repay the entire scholarship if you moved at the end of your fourth year. But with NRHA you would only be paying back 20% of your loan. Because the NRHA grants its loans year after year. By the end of the fourth year, 80% of it would have been taken.

This is a key difference to keep in mind when deciding between the two programs.

Chesapeake First Time Home Buyers

As of June 2021, the median list price for Chesapeake, VA homes was $ 304,900, according to Realtor.com. That was an 8.4% year-over-year increase this month.

If you want to buy a home at this average price, your down payment options can be between the following options:

$ 9,150 for 3% deposit$ 60,980 for 20% deposit

You can learn more about the Chesapeake Redevelopment and Housing Authority (CRHA) Home Ownership Program (HOP) by downloading the PDF brochure. It's an unusual program, so we're quoting directly from this brochure to make sure we're getting the right information:

“HOP will help residents / customers transition from renting to home and creating a pool of residents who are adequately prepared to pursue the home purchase goal through local home ownership programs and resources.

“Current HCV voucher holders who participate in the HOP program and meet all program requirements may be able to obtain their housing allowance with a monthly mortgage payment, which will increase their creditworthiness. The support can continue for 15 years if the funding is longer than 20 years, or 10 years if there is a mortgage with a term of less than 20 years. The support under this program can either be a monthly home ownership subsidy or a one-off down payment subsidy. "

Would you like more information? Call (757) 523-0401

Where can I find help buying a house in Virginia

First time Virginia home buyers can often find help by contacting one of two state-wide agencies: the Virginia Department of Housing and Community Development (Virginia DHCD) and Virginia Housing.

However, you should still consider whether a more local solution would suit your needs better.

According to the U.S. Department of Housing and Urban Development (HUD) there are many regional organizations that can help tenants on their way to home ownership.

You can fund the full list of HUD's regional and local aid programs in Virginia here.

What are the mortgage rates in Virginia today?

See the latest live Virginia mortgage rates here.

When you're ready to start buying your home, make sure you get personalized interest rate quotes from at least 3 mortgage lenders.

Don't just look at the advertised prices online; Indeed, apply for pre-approval and compare the interest rates and fees that are offered to you. This is the only way you can be sure that you are getting the best possible offer for your new home loan.

Confirm your new price (August 13, 2021)

1 Source: Experian.com 2021 study on 2020 data

2Based on a review of available state DPA grants at the time of this writing

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