Mortgage Industry News & Advice

Down Payment And Closing Cost Assistance Available For First-Time Homebuyers Living In Alexandria, Arlington, Fairfax And Loudoun Counties In Northern Virginia

By on November 28, 2010 in Tips And Advice

Attention Qualified First-time Homebuyers!… Did you know there is still Down Payment and Closing Cost Assistance available to purchase a home in the Alexandria, Arlington, Fairfax and Loudoun County areas of Northern Virginia?  Read on!        

Saving for a down payment and the necessary closing costs it takes to buy a home is often one of the greatest concerns that most first time home buyers express when they talk about why they haven’t purchased a home yet.   Many still feel that saving for the down payment is simply out of reach and because of that belief they are sitting on the sidelines while home prices are currently at some of the most affordable levels in decades.  Now is certainly a fabulous time to consider entering the Northern Virginia Housing market by purchasing your first home.  So why haven’t you?  Are you lacking the down payment or money for your closing costs?

What if you had the necessary money and were qualified to buy…would you purchase a home?

There is great news!  VHDA’s FHA Plus Loan program may be your answer.

Here are highlights of the program…. 

  • To qualify, you must be a First Time Homebuyer
  • Borrowers are required to participate in an approved VHDA First-Time Homebuyer Class
  • There are two loans in the transaction
  • -   First loan is 96.50%LTV (which alone, would mean you still need a 3.5% down payment)
  • -   Maximum Second loan of 3.5% for qualified borrowers with a 620 to 679 credit score (this second trust allows you to finance the 3.5% down payment so you don’t have to pay for it in cash)

OR…if you have a higher credit score

  •  -  Up to 5% Second loan for qualified borrowers with a 680 or greater credit score (which means it can cover the 3.5% down payment and possibly even some closing costs too)
  • Both VHDA- financed loans have a term of 30 years at the same interest rate which is fixed for 30 years

So what is the VHDA FHA Plus loan and how can it help?

The FHA Plus loan is financed by VHDA and is FHA-insured.  It gives first time home buyers a standard first trust loan but it also includes a second mortgage that is designed to help qualified borrowers with the down payment and closing costs they need.  It in essence allows a qualified buyer to finance these costs into a second trust mortgage loan rather than have to come up with that money in cash. 

And under this loan program, the seller can still pay allowable closing costs for the borrower if they are willing to do so based on the contract offer presented by the buyer.  So you can finance the down payment under this program and ask the seller to pay your closing costs!  If you have a higher credit score, you can finance the down payment and even some of the closing costs and then still ask the seller to pay the balance of closing costs, if any remain uncovered by your second trust.  It is a really terrific program if you qualify!

 There are also Income and Sales Price Restrictions…

In the Northern Virginia areas of Alexandria, Arlington, Fairfax and Loudoun Counties…

  • Income for a family of two can’t exceed $97,500 a year
  • Income for a family of three or more can’t exceed $112,500 a year
  • The maximum sale price of the home is $450,000
  • The combined total of the two loans can’t exceed this sales price limit. 

Borrowers must have cash available equal to a minimum of 1% of the home price.

All borrowers have to submit complete copies of their last three years tax returns.

VHDA sets the interest rate and point combinations for this loan program.

What is VHDA?  The Virginia Housing Development Authority (VHDA) was created in 1972 as a non-profit organization whose mission is to help provide affordable mortgage loans to qualified home buyers to assist them in finding and buying housing in the Commonwealth of Virginia.  Through bond programs that they issue, VHDA creates affordable housing loan programs in an effort to overcome affordable housing barriers.   And one of the greatest barriers to first time home buyers is the down payment and closing cost requirements of most loan programs.  The VHDA FHA Plus loan program was created to help qualified first-time home buyers secure a second trust mortgage that would enable them to finance their down payment and possibly closing costs based on credit scores and other qualification restrictions and thus open the door to homeownership now rather than delaying a purchase while the buyer continuues to save for a down payment or closing costs.  Take advantage of this program and BUY TODAY!

 So give me a call at 703-621-7895…check out the VHDA FHA Plus loan program to see if you qualify!  And since this is a Bond Program, they can change the program guidelines and the funds available are based on issued bonds which can be exhausted at any time.  So hurry while the program is still funded and available.

FOR ALL YOUR MORTGAGE NEEDS…Think Big! – Call Small   703-621-7895

About the Author

About the Author: Hi, I'm Cynthia Small, a Mortgage Lender serving all of Northern Virginia. My specialties include FHA 203(k) Rehab, Jumbo and Streamline refinances, USDA Rural Housing loans, VHDA, SPARC, Arlington County, Fairfax County, Loudoun County and City of Alexandria Homeownership Assistance Programs for First-Time Homebuyers, VA Purchase and VA Refinance, Conventional and Reverse Mortgages. I would welcome the opportunity to be of service. Feel free to contact me at 703-621-7895 or email csmall@union-mtg.com. NMLS#329508 .

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