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What to know about buying a house in Virginia
Real estate prices have been rising in the Old Dominion state, which can often put home buyers under pressure. Luckily, if you’re a first-time buyer in Virginia, there’s plenty of help available. That ranges from advice and home buyer education courses to cash grants or loans to help you out with your down payment. Here’s how to get started.
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Virginia home buyer overview
The median home price in Virginia was $365,000 in October 2022. That was an increase of 4.3% year-over-year, according to data from the Virginia Association of Realtors.
Of course, rising real estate values will actually help you out once you become a homeowner because you’ll build equity more quickly. But home price inflation can make saving for a down payment feel like a challenge. So read on for ways to get help with your down payment (and potentially your closing costs, too).
Virginia home buyer stats
| Average Home Sale Price in VA1 | $365,000 |
| Minimum Down Payment in VA (3%) | $10,950 |
| 20% Down Payment in VA | $73,000 |
| Average Credit Score in VA2 | 721 |
| Maximum VA Home Buyer Grant3 | $40,000+ (Virginia DHCD) |
Down payment amounts are based on the state’s most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.
If you’re eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.
First-time home buyer loans in Virginia
If you’re a first-time home buyer in Virginia with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).
Of course, few first-time buyers have saved enough for 20% down. But the good news is that you don’t need that much. Not by a long shot.
Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment loan programs:
- Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. The mortgage must be within local conforming loan limits. You can usually stop paying mortgage insurance after a few years
- FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
- VA loan: Only for veterans and service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
- USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
- Virginia Housing: May include competitive interest rates and down payment assistance. More information below
Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.
In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.
If you’re unsure which program to choose for your first mortgage, your lender or real estate agent can help you find the right match based on your finances and home buying goals.
Virginia first-time home buyer programs
There’s no shortage of support programs for Virginia first-time home buyers. You may be eligible for advice, educational courses, mortgages, and down payment assistance programs (DPA). The latter are often delivered through a local provider run by your city, county, or a nonprofit in your area.
Two such organizations offer statewide support for would-be home buyers:
You’ll have to meet some eligibility requirements, whichever provider you choose. Each gets to set its own rules. But there are a few common guidelines you can expect to see:
- Income limits: Your household income typically can’t be above 80% of your area median income (AMI)
- Caps on your new home’s sales price
- Mandatory home buyer education course
- Requirement to use an approved lender for the program
Because each rule book is different, it’s important to explore each provider’s offering to see which suits you best.
Virginia Housing programs
Virginia Housing offers plenty of help to both first-time and repeat buyers, including counseling, special mortgage loans, and down payment and closing cost assistance.
Virginia first-time home buyers may also be eligible for a mortgage credit certificate (MCC). This allows you to credit 10% of your annual mortgage interest against your federal income tax. This tax credit frees up more income to qualify for a home loan and afford your monthly mortgage payments.
Virginia Housing lets you download a handy e-booklet (PDF) in English or Spanish, which details its programs. But here’s what you can expect.
Virginia Housing Conventional
Virginia Housing offers first-time buyers a conventional loan with as little as 3% down, which can be even lower when paired with one of its down payment grants. This is a 30-year fixed-rate mortgage that requires PMI with down payments of less than 20%. Furthermore, borrowers will need a minimum credit score of 640 to qualify.
Virginia Housing Conventional No Mortgage Insurance
This mortgage program is nearly identical to the Virginia Housing Conventional. First-time home buyers receive a 30-year fixed-rate loan with options for down payment and closing cost assistance. However, this program doesn’t require private mortgage insurance with less than 20% down. That can lead to huge savings on your monthly payment.
However, you’ll need a higher credit score for this loan — expect to need at least a 660 FICO score to qualify.
Virginia Housing Loan Combo
Through Virginia Housing, first-time buyers can obtain a mortgage loan, down payment grant, Mortgage Credit Certificate, and a free home buyer education course all in one tidy bundle. You’ll need a credit score between 620 to 680 to qualify, depending on the loan type.
Virginia first-time home buyer grants
Along with a variety of special mortgage loans, Virginia first-time home buyers can access a number of down payment and closing cost assistance options.
DHDC Down Payment Assistance
Virginia DHCD’s down payment assistance program doesn’t provide outright home buying grants. But it does offer conditional ones.
If you’re eligible, you may be in line for a grant that you never have to repay, provided you remain in the home for a certain number of years.
- If you borrow up to $14,999, you have to remain in residence for five years. And you have to pay back the whole amount if you move earlier
- If your grant exceeds $40,000, you have to stay put for 15 years for it to be forgiven
- For grant amounts between $15,000 and $40,000, the period of residency is 10 years
The highest grants are available only in places designated as “high-cost areas” or “chronically economically depressed.” You can find details through the link above.
Virginia Housing Down Payment Assistance
A Virginia Housing loan doesn’t let you borrow as much as Virginia DHCD. It usually offers 2% (sometimes 2.5%) of your next home’s purchase price. But this is a true grant. So there are no residency requirements. Once you have the money, it’s yours to keep.
Each of the programs below comes with its own eligibility requirements. So visit Virginia Housing’s underwriting guidelines page for more information.
Closing Cost Assistance Grant
The Closing Cost Assistance Grant lowers upfront borrowing costs for buyers with a USDA loan or a VA loan. As stated above, the maximum grant is 2% of the purchase price. But funds can also be applied to the rural housing service guarantee fee or the VA funding fee.
Down Payment Assistance Grant
Qualified first-time home buyers in Virginia can receive a grant of up to 2.5% of the purchase price. You’ll need to use this grant with a Virginia Housing mortgage and not exceed income limits.
Virginia Housing Plus Second Mortgage
First-time buyers may be eligible for a forgivable second mortgage equal to 3%-5% of the purchase price. Not only does this loan cover your entire down payment, but qualified buyers with credit scores of 680 can also finance closing costs into the second mortgage.
Buying a home in Virginia’s major cities
Unlike many states, home prices in Virginia’s three biggest cities are actually below the statewide average. But prices in those cities are rising faster than elsewhere in the Old Dominion.
Virginia Beach first-time home buyers
The median list price in Virginia Beach was $350,000 in November 2022. That was up 6.1% year-over-year, according to Realtor.com.
If you want to buy a home at that median price, your down payment options might fall between:
- $10,500 for 3% down payment
- $70,000 for 20% down payment
The City of Virginia Beach also has a down payment assistance program of its own. It says, “Individuals may … qualify for down payment assistance or, if a veteran seeking a VA loan, a closing cost assistance grant.” Visit the above link for more information.
Norfolk first-time home buyers
The median list price of homes in Norfolk, VA was $282,300 in November 2022. That was a year-over-year increase of 6.6%, according to Realtor.com.
If you want to buy a home at that median price, your down payment options might fall between:
- $8,470 for 3% down payment
- $56,460 for 20% down payment
The City of Norfolk and Norfolk Redevelopment and Housing Authority (NRHA) has a down payment assistance program called the NRHA HOME program that provides up to $40,000 in down payment and closing cost assistance to first-time home buyers.
However, the NRHA website doesn’t mention whether this assistance is a grant or a forgivable second mortgage. Nor does it give details about program eligibility, aside from household income not exceeding 80% of the area median income.
If you’re interested in this NRHA program, reach out to them directly by calling (757) 623-1111
Chesapeake first-time home buyers
The median list price of homes in Chesapeake, VA was $360,000 in November 2022. That was a year-over-year increase of 9.3.%, according to Realtor.com.
If you want to buy a home at that median price, your down payment options might fall between:
- $10,800 for 3% down payment
- $72,000 for 20% down payment
You can find out more about the Chesapeake Redevelopment and Housing Authority (CRHA) HomeOwnership Program (HOP) by downloading its PDF brochure. It’s a unique program, so we’ll quote directly from that brochure to be sure we get the information right:
“HOP will assist residents/clients transition from renting to homeownership and create a pool of residents adequately prepared to pursue the goal of buying their own home through local homeownership programs and resources.
“Current HCV voucher holders who participate in the HOP program and meet all program requirements may be able to use their housing assistance with a monthly mortgage payment, thereby increasing their borrowing capacity. The assistance may continue for 15 years for 20+ year funding, or 10 years if less than a 20-year mortgage. Assistance under this program may be either a monthly home-ownership assistance payment or a single, down payment assistance grant.”
Want more information? Call (757) 523-0401.
Where to find home buying help in Virginia
Virginia first-time home buyers can often find help by reaching out to one of two statewide agencies: the Virginia Department of Housing and Community Development (Virginia DHCD) and Virginia Housing.
You should also check to see if a local solution might meet your needs better. According to the U.S. Department of Housing and Urban Development (HUD), there are plenty of regional organizations that can help renters on the path to homeownership.
This list of resources is sourced from the Department of Housing and Urban Development.
Hampton Roads Area
Southwest Virginia Area
Eastern Shore
Shenandoah Valley Area
Northern Virginia Suburbs
Fredericksburg Area
Petersburg Area
Richmond Area
Roanoke Valley Area
Charlottesville Area
Danville Area
What are today’s mortgage rates in Virginia?
You can see today’s live mortgage rates in Virginia here.
When you’re ready to start the home buying process, experiment with a mortgage calculator to see how down payment and interest rates will affect your monthly payment. Then make sure you get personalized rate quotes from at least three to five mortgage lenders.
Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.
1 Source: Virginia Association of Realtors Home Sales Report
2 Source: Experian.com study of 2021 and 2020 data
3 Based on a review of the state’s available DPA grants at the time this was written
