First-time home buyer programs in Virginia: assistance, loans and real costs
Virginia Housing’s assistance is a true grant (no lien, no forgiveness period) rather than a second mortgage, and its 10% MCC is modest but lasts the life of the loan — a quieter, simpler package than most states offer. Everything else on this page — the agency programs, the tax credit, the closing costs — sits on top of that fact.
| State housing agency | Virginia Housing (formerly VHDA) |
|---|---|
| Median home price (approx.) | $400,000 — statewide order of magnitude; metros differ |
| 3.5% / 5% / 20% down | $14,000 / $20,000 / $80,000 on the median |
| Property tax (effective) | about 0.82% — roughly $3,280 a year on the median |
| Mortgage credit certificate | Yes — mortgage credit certificate offered |
| Transfer tax | Virginia’s recordation tax on the deed and mortgage is $0.25 per $100 (0.25%) each, paid by the buyer, plus a grantor tax of $0.50 per $500 (0.1%, more in Northern Virginia and Hampton Roads for regional transportation) paid by the seller. |
Virginia’s first-time buyer programs
Virginia Housing (formerly VHDA) offers conventional, FHA, VA, USDA and Plus Second Mortgage first-time buyer loans, the Down Payment Assistance Grant and Closing Cost Assistance Grant, and the Virginia Housing Mortgage Credit Certificate; its SPARC program provides rate reductions through localities.
How the assistance money works
The Down Payment Assistance Grant provides 2% to 2.5% of the price (depending on loan type) with no repayment; the Closing Cost Assistance Grant provides 2% for VA and USDA loans; the Plus Second Mortgage covers 3% to 5% as a 30-year second for buyers who need more.
A second-lien assistance loan has consequences at refinance — it usually must be repaid or subordinated — and a forgivable one repaid early loses its forgiveness. Plan the holding period accordingly. See how down payment assistance programs work.
Is there a first-time buyer tax credit?
Virginia Housing’s Mortgage Credit Certificate provides a federal tax credit of 10% of annual mortgage interest for the life of the loan to first-time buyers within income and price limits.
Income and purchase price limits
Virginia Housing income limits vary by region (highest in Northern Virginia) and household size, and purchase price limits apply; a 620 minimum credit score (660 for conventional) and a free homebuyer education class are required.
Closing costs, transfer taxes and who pays them in Virginia
Virginia’s recordation tax on the deed and mortgage is $0.25 per $100 (0.25%) each, paid by the buyer, plus a grantor tax of $0.50 per $500 (0.1%, more in Northern Virginia and Hampton Roads for regional transportation) paid by the seller.
Virginia buyers pay recordation taxes on both the deed and the mortgage — roughly 0.5% combined — plus title, attorney or settlement agent fees and lender costs, for a typical 2.5% to 3.5% of the price. The closing costs guide shows what is negotiable; seller concessions shows how much a seller may contribute on each loan type.
Worked example: buying the median home in Virginia
Take a $400,000 home — roughly the statewide median, though Virginia’s metros vary widely — and an illustrative 6.5% rate. The table shows the cash down and the monthly principal and interest for the three structures first-time buyers use most, plus the property tax at Virginia’s approximate 0.82% effective rate ($3,280 a year). Insurance and mortgage insurance come on top.
| Structure | Down payment | Loan amount | P&I at 6.5% (30 yr) | Property tax / mo (est.) |
|---|---|---|---|---|
| FHA, 3.5% down | $14,000 | $386,000 | $2,440 | $273 |
| Conventional, 5% down | $20,000 | $380,000 | $2,402 | $273 |
| Conventional, 20% down (no PMI) | $80,000 | $320,000 | $2,023 | $273 |
Illustrative rate and approximate state figures — not an offer or a quote. Full payment tables cover $150,000 to $800,000 at 5% to 8%; the affordability guide explains how lenders size the loan.
Frequently asked questions
Does Virginia have down payment assistance for first-time buyers?
The Down Payment Assistance Grant provides 2% to 2.5% of the price (depending on loan type) with no repayment; the Closing Cost Assistance Grant provides 2% for VA and USDA loans; the Plus Second Mortgage covers 3% to 5% as a 30-year second for buyers who need more. Program terms and amounts change with funding — confirm the current version with Virginia Housing or an approved lender before you count on a figure.
Is there a first-time home buyer tax credit in Virginia?
Virginia Housing’s Mortgage Credit Certificate provides a federal tax credit of 10% of annual mortgage interest for the life of the loan to first-time buyers within income and price limits. The credit is worth a percentage of the mortgage interest you pay each year, up to a federal cap, and can be combined with many first-mortgage programs.
What are typical closing costs when buying a house in Virginia?
Virginia buyers pay recordation taxes on both the deed and the mortgage — roughly 0.5% combined — plus title, attorney or settlement agent fees and lender costs, for a typical 2.5% to 3.5% of the price. Virginia’s recordation tax on the deed and mortgage is $0.25 per $100 (0.25%) each, paid by the buyer, plus a grantor tax of $0.50 per $500 (0.1%, more in Northern Virginia and Hampton Roads for regional transportation) paid by the seller.
Guides for first-time buyers
- Pre-approval vs pre-qualification: what sellers actually respect
- Closing costs explained: what is negotiable, what is not
- PMI for first-time buyers: what it costs and how to get rid of it
- Gift funds for a down payment: the rules, the letter, the paper trail
Also for this state: hard money rules in Virginia · foreclosure in Virginia.