The central player in Virginia is Virginia Housing, the state's housing finance agency, which most people still know by its former name, the Virginia Housing Development Authority (VHDA). It defines a first-time buyer as someone who has not owned a home in the last three years, with an exception when you buy in a designated targeted area. Its programs are not loans you apply for directly: you apply through a participating lender who is approved to offer Virginia Housing products, and income and sales price limits apply, so your lender confirms eligibility before you start house hunting in Fairfax or anywhere else.
The best-known product is the Down Payment Assistance (DPA) Grant, a true grant of 2 to 2.5 percent of the purchase price that is never repaid. It must be paired with an eligible Virginia Housing first mortgage (its Conventional or FHA options), and it goes toward the down payment itself, not closing costs. If you are using a VA or USDA loan instead, the Closing Cost Assistance (CCA) Grant fills the parallel role: up to 2 percent of the price applied to closing costs, discount points, prepaid items, and the VA funding fee or USDA guarantee fee. Most Virginia Housing programs also require a homebuyer education course, which is genuinely useful the first time you walk through a closing disclosure in Manassas.
If the down payment itself is the obstacle, the Virginia Housing Plus Second Mortgage is built for that. It pairs an eligible Virginia Housing first mortgage with a second mortgage, typically 3 to 5 percent of the purchase price depending on your credit and the loan type, which acts as your down payment. The second mortgage is repaid over 30 years, and you still need a small amount of your own funds, about 1 percent of the price, in reserves at closing. It is a clean way for a buyer in Woodbridge to get into a home sooner while keeping an emergency fund intact.
Two more programs worth knowing. The Department of Housing and Community Development funds the HOMEownership Down Payment and Closing Cost Assistance program for first-time buyers at or below 80 percent of area median income: the money flows through approved local DPA providers, you complete HUD-certified homebuyer education and counseling, and you contribute a small amount from your own savings. And the state tax code offers a first-time homebuyer savings account where the interest and capital gains you earn are exempt from Virginia income tax, with funds restricted to the down payment and closing costs. Program terms and limits change, so talk to a participating lender early and confirm the current rules before you build your budget around any single number.
FAQ
Who counts as a first-time homebuyer in Virginia?
For Virginia Housing's purposes, a first-time buyer is someone who has not owned a home in the last three years. There is an exception when you buy in a designated targeted area, where the first-time-buyer requirement can be waived. Your participating lender verifies your status when you apply.
Do I have to repay the Down Payment Assistance grant?
No. The DPA Grant is a true grant, a gift from Virginia Housing, not a loan, so it is never repaid. That is different from the Plus Second Mortgage, which is a repayable second mortgage. Make sure you know which product you are using before you sign.
Can I use these programs with any lender?
No. Virginia Housing products are only available through participating, approved lenders, and each program pairs with specific eligible first mortgages. A local lender who does Virginia Housing loans regularly can confirm which products you qualify for and which pair together.
Do Virginia Housing programs work in Northern Virginia's price range?
They can, but income and sales price limits apply, and the limits vary by area and household size and change over time. Have your lender check the current limits for your county and household before you assume eligibility or build an offer around a specific program.