2025 Virginia First-Time Homebuyer Programs and Loans

Buying your first home is a huge milestone — but for many Virginians, the financial hurdles can be tough to overcome. Upfront expenses, such as a minimum down payment or closing costs, can be especially challenging to save for, particularly if you have a modest income or live in an area with high home prices.

The good news is that aspiring Virginia homebuyers have a variety of programs to help make buying a home more affordable. If you meet the criteria, you can get assistance with your down payment or closing costs or even with boosting your cash savings.

First-time homebuyer programs in Virginia

Despite higher costs in some parts of Virginia, the Old Dominion state is still a pretty good place to be a first-time homebuyer. Depending on your income and area of residence, you could be eligible for substantial cash assistance. For example, here are some of the programs available:

• HOMEownership Down Payment and Closing Cost Assistance Program: Good option for low-income homebuyers who are searching for a long-term residence.
• Down Payment Assistance Grant: Good option for low- to moderate-income homebuyers looking for help with their down payment.
• Closing Cost Assistance Grant: Good option for low-income rural homebuyers and veterans planning for a no-down payment mortgage.
• Virginia Housing Plus Second Mortgage: Good option for cash-strapped homebuyers willing to borrow extra money for their down payment.
• Virginia Individual Development Accounts (VIDA) program: Good option for aspiring homebuyers who need help saving for a down payment.

HOMEownership Down Payment and Closing Cost Assistance Program

This grant program from the Virginia Department of Housing and Community Development is designed to help low-income Virginians with limited savings afford the initial expense of buying a home. Administered by local partners, it offers qualifying homebuyers a forgivable loan of up to 10% or 15% of a home’s purchase price, as well as $2,500 for closing costs. Plus, you only have to put down $500 or 1% of a home’s purchase price, depending on your income.

However, the program comes with restrictions, including strict income limits, a cap on a home’s purchase price and a requirement that the buyer lives in the home for at least five to 15 years. The program is best for low-income Virginians looking for a modest home they can live in long term.

Requirements

• Meet first-time homebuyer qualifications (either never owned a home or have not owned a home in the last three years)
• Complete homeownership counseling and a homebuyer education course
• Income can’t exceed 80% of the area median income (AMI)
• Minimum credit score of 620
• Debt-to-income ratio no higher than 43% to 45%
• Home must be within the purchase price limit and can’t exceed five times your income

Pros and cons

Down Payment Assistance (DPA) Grant

The Virginia Housing Development Authority’s Down Payment Assistance Grant isn’t as generous as the HOMEownership Down Payment and Closing Cost Assistance Program. This down payment grant only offers a maximum gift of 2% to 2.5% of a home’s purchase price. The income limits are higher, so the program is available to more Virginians. The grant never has to be repaid, and it can be used with other non-Virginia housing grants. You must pair the grant with an eligible loan from Virginia Housing, though, so it’s best-suited to low- and moderate-income buyers who can’t find a better loan elsewhere.

Requirements

• Qualify as a first-time homebuyer (must have either never owned a home or not owned a home in the last three years), unless you are purchasing in an “area of economic opportunity”
• Your home loan must be a bond FHA or conventional loan from Virginia Housing
• You must have a household income no higher than $80,000 to $164,000, depending on the size of your household and where you want to purchase a home
• Home price must be no more than $450,000 to $750,000, depending on the area

Pros and cons

Closing Cost Assistance Grant

Similar to the Down Payment Assistance Grant, the Closing Cost Assistance Grant from the Virginia Housing Development Authority gives homebuyers up to 2% of a home’s purchase price to help pay for upfront costs. It’s designed for borrowers who are already using an eligible no-down-payment loan program, such as a bond Rural Housing Service (RHS) loan or a loan backed by the U.S. Department of Veterans Affairs (VA). Eligible expenses include out-of-pocket closing costs, RHS guarantees and VA funding fees. You can also use it with other non-Virginia grants, but you must pair it with an eligible Virginia Housing loan, so it’s only available to rural homebuyers and veterans.

Requirements

• Qualify as a first-time homebuyer (must have either never owned a home or not owned a home in the last three years), unless you are purchasing in an “area of economic opportunity”
• Your home loan must be either a bond RHS or a VA loan from Virginia Housing
• You must have a household income no higher than $80,000 to $164,000, depending on the size of your household and where you want to purchase a home
• Home price must be no more than $450,000 to $750,000, depending on area

Pros and cons

Virginia Housing Plus Second Mortgage

The Virginia Housing Plus Second Mortgage is a unique program designed for first-time homebuyers who don’t have enough cash on hand for their desired down payment or for closing costs. If you can afford another home loan, the Virginia Housing Plus Second Mortgage allows you to borrow 1.5% more than a home’s purchase price and put it toward your down payment. Alternatively, borrowers with credit scores of 680 or more may be eligible for an even bigger loan (up to 5%) that they can also put toward closing costs.

Requirements

• Qualify as a first-time homebuyer (must have either never owned a home or not owned a home in the last three years), unless you are purchasing in an “area of economic opportunity”
• Your home loan must be either a non-bond or bond FHA/conventional or non-bond Conventional No MI loan from Virginia Housing
• You must have a household income no higher than $100,000 to $232,000
• Typically, home price must be no more than $450,000 to $750,000, depending on area (but limits for expanded/non-bond programs are based on insurer/guarantor loan limits)
• You must have at least 1% of a home’s sales price available for closing costs, prepaid expenses or to be held in reserves, but you don’t need to use it for your down payment

Pros and cons

Virginia Individual Development Accounts (VIDA) program

The Virginia Individual Development Accounts program from the Department of Housing and Community Development helps people who are saving for closing costs or a down payment fast track their home purchase. If you qualify, VIDA will match each $1 you save with $10, up to $10,000 in matched savings. Participants also get training and support. The program is designed to last just four to 24 months, though, so only savers who can afford to set aside a lot of money very quickly will see a major benefit. There are also strict income requirements, limiting the program’s availability to lower-income borrowers.

Requirements

• Must be a Virginia resident and U.S. citizen or legal resident, 18 years or older
• Applicants must fall within VIDA income guidelines, which range from $39,400 to $68,500 for a single person
• Must be able to show earned income from full-time, part-time or self-employment work
• Program must be completed within four to 24 months

Pros and cons

Virginia first-time homebuyer qualifications

Applying for a first-time homebuyer program in Virginia is a fairly straightforward process. In some cases, a homebuyer education course or counseling may be required, so be sure to give yourself ample time to research, check your eligibility and apply for programs.

Steps to apply for a first-time homebuyer program

Step 1: Check your credit score.

First-time homebuyers programs tend to have lenient credit score requirements, but you should look at your score to see where you stand. For instance, two of the programs outlined above require a minimum credit score of 620. The average credit score among Virginians was 723 in 2024, according to Experian, so if you’re in that ballpark, you should have no problem qualifying.

Step 2: See if there are income guidelines and if you meet them.

In many cases, first-time homebuyer programs are geared toward helping people with lower incomes. Some Virginia programs with this requirement have a chart that specifies the income limits based on your area and the number of people in your household.

Step 3: Find out if there are sales price or loan amount limits.

Depending on the program, there may also be a maximum home price or home loan amount. Before settling on a home, check to make sure it’s eligible for assistance.

Step 4: Find a program that aligns with the type of home loan you are getting.

First-time homebuyer programs may be earmarked for borrowers of a particular type of loan. Your mortgage lender should be able to help you identify any potential first-time homebuyer programs that you can qualify for.

Step 5: Get a mortgage preapproval.

In order to pursue a first-time homebuyer program, you should have your mortgage financing lined up first. Shop around to see what various lenders offer.

Step 6: Determine who to contact and how to apply.

Most first-time homebuyer programs in Virginia have instructions on their websites about who to contact or how to get the process started, including local county programs. But in some cases, you may have to reach out to a nonprofit organization in your area.

Step 7: Schedule required counseling sessions or sign up for necessary coursework.

If you’re required to work with a housing counselor or take a homebuyer course, you’ll have to sign up or get in touch to schedule a session. The Virginia Housing Authority offers both online courses and in-person classes. You can also use the Department of Housing and Urban Development’s (HUD) online tool to find a HUD-approved counselor in your area.

Understanding Virginia first-time homebuyer down payment assistance

There are multiple types of down payment assistance for you to explore. Out of the 62 DPA programs in Virginia, about 88.7% of them had available funding as of Q4 2024, according to Down Payment Resources’s homeownership program index.

Deferred second mortgage

Requires repayment? Yes

A deferred second mortgage, also called a “soft second” mortgage is essentially a second home loan that you can use to pay your closing costs and down payment. What makes it appealing is that you won’t have to pay it back right away, and you may even be able to wait until you sell or refinance the home.

Forgivable second mortgage

Requires repayment? No

With a forgivable second mortgage, you might not have to pay back your loan at all if you remain in the home for an agreed-upon period.

Grant

Requires repayment? No

Unlike a second mortgage, grants are a form of gift aid, meaning they don’t have to be paid back at all. But they may also be more restrictive than other assistance programs.

Mortgage credit certificate

Requires repayment? No

A mortgage credit certificate (MCC) is a homebuyer assistance program administered by state and local Housing Finance Agencies (HFAs) that allows lower-income homebuyers to claim a special tax credit for up to $2,000 in mortgage interest.

Keep these things in mind about DPA programs

DPA programs typically have strict income and home price requirements and may only be available in certain regions when funding is available. So research your options before you start your home search. Keep in mind that you may also be subject to ongoing restrictions, such as when you can rent or sell your home or when you can refinance it.

How much of a down payment do I need to buy a house in Virginia?

The exact amount you’ll need for a down payment depends on a number of factors including a home’s purchase price and the type of home loan you’re getting. For example, the average U.S. home price was $501,100 in the third quarter of 2024. For that price, a 20% down payment on a conventional loan is $100,220. However, a 3.5% down payment on an FHA loan is a little over $17,538. Many Virginians pay somewhere in the middle. According to LendingTree’s latest FTHB study, the average first-time homebuyer in Virginia had a down payment of $43,901.

Can I qualify for down payment assistance in Virginia?

It depends. In most cases, these programs are reserved for homebuyers with modest incomes. You’ll usually need to be a first-time homebuyer or at least have not owned a home within the last three years. Depending on the program, you may also need a credit score of 620 or higher.

How do I apply for Virginia first-time homebuyer down payment assistance?

If you think you may qualify for a Virginia first-time homebuyer down payment assistance program, you can start the application process by contacting a mortgage lender, local nonprofit or county housing office to find out what’s required.

Other first-time homebuyer loan programs

Conventional loans

First-time homebuyers who have strong credit and ample income may be well suited for a conventional loan. These loans tend to have competitive mortgage rates and favorable terms but also more stringent requirements.

FHA loans

FHA loans are backed by the Federal Housing Administration and are popular with first-time homebuyers since they only require a 3.5% down payment and have flexible eligibility requirements. For instance, people with credit scores in the 500s may be able to qualify. Since these loans are government-backed, lenders are able to offer competitive FHA interest rates that often trend lower than conventional loan rates.

VA loans

VA loans are guaranteed by the U.S. Department of Veterans Affairs and available to veterans and military service people, as well as their spouses. These loans offer low interest rates and closing costs, and borrowers are not required to make down payments.

USDA loans

Guaranteed by the U.S. Department of Agriculture, USDA loans are aimed at lower-income homebuyers who wish to purchase a home in a qualified rural area. Borrowers do not have to make a down payment.

What are the best first-time homebuyer loans?

As a first-time homebuyer, there are a lot of factors to consider, including which type of home loan is best for you. This will depend, in part, on your credit score, income, debt, how much money you’ve saved for a down payment (if any), the type of home you wish to buy and if you meet any special eligibility requirements.

Conventional loans may be less expensive overall, especially if you can afford a 20% down payment. But if you have credit challenges, an FHA loan could be easier to qualify for than a conventional loan. Borrowers with a military affiliation may qualify for a no-down-payment VA loan. Or if you’re buying a home in a rural area, you may qualify for a zero-down USDA loan.

Home price trends in Virginia’s major areas

Virginia house prices rose by 5.65% between 2023 and 2024, according to the Federal Housing Finance Agency’s (FHFA) House Price Index (HPI). The state currently ranks 22nd in the nation for fastest home price growth. However, some metro areas in the Old Dominion are climbing even more quickly, according to FHFA data.

For example, home prices in Lynchburg jumped 8.49%. Meanwhile, home prices in college towns nestled in the Blue Ridge Mountains also climbed more than statewide home prices last year. In the Blacksburg-Christiansburg metropolitan area, home prices increased by 6.60% year over year. Price growth in the capital city of Richmond, by contrast, was closer to the statewide average, climbing by only 5.98%.

Is there a first-time homebuyer tax credit in Virginia?

Virginia Housing used to have a mortgage credit certificate program — but since it’s been suspended as of May 1, 2023, there are currently no tax breaks. There’s also no longer a federal tax credit for first-time homebuyers.

What are the current mortgage rate trends in Virginia?

The average mortgage rate in Virginia is trending somewhat lower compared to last year. According to ICE Mortgage Technology’s rates data, for example, rates for all Virginia mortgage types are currently hovering between 6.4% and 7%, which is close to where national rates are landing. Rates may fall further still, but the road could also remain bumpy: The current mortgage rates forecast from LendingTree predicts that mortgage rates nationwide could dip closer to 6% in a best case scenario, but rates might also spike if inflation worsens.