What to know about buying a house in Virginia

Home prices have been rising in the Old Dominion state. And that can often put first-time home buyers under pressure.

Luckily, if you’re a first-time home buyer in Virginia, there’s plenty of help available. That ranges from advice and homebuyer education courses to cash grants or loans to help you out with your down payment. Ready to get started?

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Virginia home buyer overview

The median home price in Virginia was $375,000 in March 2022. That was an increase of 11.9% year-over-year, according to data from the Virginia Association or 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 gains 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 $375,000 
Minimum Down Payment in VA (3%) $11,250
20% Down Payment in VA $75,000
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 US 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, 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 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 Department of Housing and Community Development: 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 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/or 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 offers one intriguing conventional loan option for both first-time and repeat buyers:

  • Virginia Housing Loan No Mortgage Insurance: Finance up to 97% of the home purchase without having to pay private mortgage insurance. Plus, this loan can be paired with the Virginia Housing Plus Second Mortgage which provides additional down payment assistance

Virginia Housing lets you download a handy e-booklet (PDF) in English or Spanish, which details its programs.

Virginia first-time home buyer grants

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.

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.

You could also get a mortgage credit certificate (MCC) with Virginia Housing, which is “a dollar-for-dollar [tax credit] toward your federal income tax liability.” And, “The annual credit is equal to 10% of the annual mortgage interest you pay.”

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. And prices in those cities have been rising less quickly than elsewhere in the Old Dominion.

So that’s a bit of good news for Virginia first-time home buyers. But the numbers are still fairly daunting if you’re saving for a down payment. So check out local down payment and closing cost assistance programs if you could use a hand.

Virginia Beach first-time home buyers

The median list price in Virginia Beach in March 2022 was $327,500, according to Realtor.com. That was up 11% year-over-year. So prices and home price inflation are consistent with the average across the state.

If you want to buy a home at that median price, your down payment options might fall between:

  • $9,825 for 3% down payment
  • $65,500 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

In March 2022, the median list price of homes in Norfolk, VA was $270,000, according to Realtor.com. That was a year-over-year increase of 8.4%.

If you want to buy a home at that median price, your down payment options might fall between:

  • $8,100 for 3% down payment
  • $54,000 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 is a lot like the one offered by Virginia DHCD.

This is a similarly generous second mortgage (rather than a grant) that’s forgiven over time. For example, if you borrow less than $15,000, you’ll owe nothing after five years because the whole amount will have been forgiven over that period.

However, there’s an important difference between the two programs. Because, with Virginia DHCD, you’d have to repay the entire grant if you moved at the end of year four. But with NRHA, you’d only pay back 20% of your loan. Because NRHA forgives its loans year by year. So 80% of it would have been forgiven by the end of year four.

That’s a key difference, and one you should bear in mind if you’re choosing between the two programs.

Chesapeake first-time home buyers

In March 2022, the median list price of homes in Chesapeake, VA was $340,000, according to Realtor.com. That was a year-over-year rise that month of 10.5%.

If you want to buy a home at that median price, your down payment options might fall between:

  • $10,200 for 3% down payment
  • $68,000 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 an unusual 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.

Regional and local first-time home buyer resources in VA

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, make sure you get personalized rate quotes from at leastthree 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

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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