Virginia first-time homebuyer grants and down payment assistance (2026)

Three Virginia Housing products, and you can only pick one

Each of Virginia Housing’s three assistance products is tied to a specific kind of first mortgage. Its guidelines bar combining any two of them ⁠¹⁠²:

• Down Payment Assistance Grant. 2.5% of the lower of the sales price or appraised value with an FHA Bond first mortgage, or 2% with a Conventional Bond loan. It can be used only for the down payment, not closing costs. You must still put in 1% of the price, which can come from a gift ⁠¹.
• Closing Cost Assistance Grant. Up to 2% of the purchase price with an RD Bond or VA Bond loan. It can pay closing costs, the RD guarantee fee or the VA funding fee, and you need to be a first-time buyer. It sits on top of loans that already finance 100% of the price ⁠⁵.
• Virginia Housing Plus Second Mortgage. A second loan that covers the whole down payment. It is the only one of the three open to repeat buyers, and it works with bond or non-bond FHA and conventional first mortgages ⁠².

The grant must be reserved after the first mortgage is locked. It expires with that rate lock, which can be extended by up to 60 days ⁠¹. All three products can be combined with non-Virginia Housing assistance, such as the county loans below ⁠¹⁠².

What you owe later: grant versus Plus Second Mortgage

The two grants have no note, no deed of trust and no repayment, even if you sell the next year ⁠¹. The Plus Second Mortgage is a real loan. It is fully amortizing over 30 years at a fixed rate, with monthly payments and no prepayment penalty. Its rate mirrors the first mortgage rate, and taking it adds 0.25% to an FHA first-mortgage rate or 0.125% to a conventional one ⁠².

The extra 1.5% available at 680 is meant for closing costs ⁠². If no borrower has a credit score, an FHA buyer is held to 3.5% and a conventional buyer cannot use the Plus Second at all ⁠².

Bond loans have one more cost to know about. Virginia Housing’s FHA Bond and Conventional Bond loans are subject to federal recapture tax if you sell early at a gain. They also cap the buyer’s net worth at 50% of the sales price ⁠⁴.

Virginia Housing’s August 2026 limits by region

Income and price caps depend on where the home is and which product you use. The grants use the lowest income column and count every household member’s income. Bond loans used with the Plus Second Mortgage use the standard bond column. Non-bond loans use a higher cap with no sales price limit and count only borrowers’ qualifying income ⁠¹⁠²⁠³.

Scroll the table sideways to see every column.

The Washington area includes Arlington, Fairfax, Loudoun, Prince William, Stafford, Spotsylvania, Fauquier and Clarke counties and the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas and Manassas Park. Richmond covers Chesterfield, Henrico, Hanover and 13 other localities. Hampton Roads covers Chesapeake, Hampton, Norfolk, Portsmouth, Suffolk, Virginia Beach and others. The limits page lists every locality. Unlisted localities use “All other areas.” Applications before Aug. 1, 2026 used the 2025 limits ⁠³.

Homes in federal Areas of Economic Opportunity get higher limits, and the first-time buyer rule is waived there. Your lender checks whether the address qualifies ⁠³⁠⁴.

Credit, DTI and the first-time test

On FHA Bond loans, Virginia Housing requires a 620 middle score for every borrower, with no exceptions. A borrower with no score can still qualify through FHA manual underwriting ⁠⁴. Conventional loans require 640 ⁠⁵. The debt-to-income cap is 50% with Desktop Underwriter or Loan Product Advisor approval. Manually underwritten loans must meet the stricter of FHA’s and Virginia Housing’s ratios ⁠⁴⁠⁵. Non-occupant co-borrowers are not allowed ⁠⁴.

You count as a first-time buyer if you have not owned and occupied a primary residence in the last three years. Lenders check this with the signed Exhibit E affidavit, your loan application and your credit report, and may ask for three years of tax transcripts ⁠⁴.

Homebuyer education: Virginia Housing’s free class or a HUD-approved course

Every person who will share responsibility for the mortgage must take the class and give the lender a completion certificate before closing. The class is free, offered in English and Spanish, and can be taken in person or online ⁠⁵. On bond loans, Virginia Housing also accepts a HUD-approved counseling agency’s course, Fannie Mae Framework or Freddie Mac CreditSmart. It does not accept Fannie Mae HomeView. Certificates are valid for two years ⁠⁴.

DHCD’s HOME money through regional nonprofits

DHCD’s HOMEownership Down Payment and Closing Cost Assistance program (DPA) serves first-time buyers at or below 80% of area median income. It pays up to 10% of the sales price, or up to 15% in localities DHCD lists as high-cost or chronically economically depressed. Providers can add up to $2,500 for closing costs, with a $40,000 maximum and a $1,000 minimum ⁠⁹⁠¹⁰. The high-cost list includes Fairfax, Arlington, Alexandria, Loudoun, Prince William, Stafford and Spotsylvania, along with many Southwest Virginia counties ⁠¹⁰.

The assistance is a 0% deferred second lien with no payments, forgiven after 5 years for $1,000 to $14,999 or after 10 years for $15,000 to $40,000. If you sell or move out before then, DHCD recaptures the full amount from net sale proceeds ⁠¹⁰. Providers apply a 38% housing ratio and 45% DTI, with exceptions up to 50%. They also require HUD-certified counseling and a home inspection, and they may charge program fees ⁠¹⁰. DHCD’s separate Virginia Pilot Down Payment Assistance Program pays up to $50,000 to buyers at or below 60% of AMI ⁠⁹. You apply for either one through the regional provider for your locality, not through DHCD itself ⁠⁹.

County loans in Northern Virginia

• Arlington, MIPAP. Open as of Oct. 20, 2026. It pays up to 25% of the price, capped at $120,000 for 1-3 people or $130,000 for 4 or more, as a 0% deferred second trust. At sale or refinance you repay the loan plus a proportional share of any appreciation, up to 25%. The 2026 income limit is $132,880 for four, and the price cap is $650,000. You need a 1% contribution, no more than $50,000 in liquid assets, a 38% housing ratio and 45% DTI. The first mortgage must be a conventional loan from a Virginia Housing-approved lender. Review can take up to 60 days ⁠¹¹.
• Fairfax County Down Payment Loan. A pilot launched April 14, 2026 with Virginia Housing grant money. It pays up to $50,000 to first-time buyers at or below 80% of AMI, first come, first served while funds last ⁠¹³. The 2026 limit is $131,100 for four. The loan has no monthly payments. When you pay it off, you also repay the same percentage of your home’s appreciation that the loan was of the purchase price. You need Virginia Housing’s class, a HUD-certified counselor and a Virginia Housing first mortgage. Your lender submits the application, and you cannot already be under contract ⁠¹².
• Loudoun, DPCC and DPCC Plus. Each pays 10% of the price or $70,000, whichever is less, at 0% and forgiven over 15 years. DPCC covers incomes of $49,850 to $116,299, and DPCC Plus covers $116,300 to $166,100. You must have lived or worked in Loudoun for six months. Funds are first come, first served ⁠¹⁴.
• Prince William, FTHB. It covers Prince William County, Manassas and Manassas Park, using federal HOME funds, and takes applications in open periods while money lasts. Assistance can reach 33% of the price for households at or below 60% of AMI, or 23% up to 80%, secured by a 30-year second deed of trust. Requirements include a 640 middle score, 32/40 ratios and three Virginia Cooperative Extension classes ⁠¹⁵.

No MCC, but SPARC and FirstHome Dream rate cuts

Virginia Housing suspended its Mortgage Credit Certificate program on May 1, 2023, and no state MCC is available ⁠⁶. Instead, local governments and nonprofits receive rate-reduction allocations. SPARC cuts the Virginia Housing rate by 1.00% for buyers a sponsor approves ⁠⁷. FirstHome Dream cuts it by 2.00% on bond loans for first-generation buyers. Under that program, no borrower or spouse can ever have owned a home, and no borrower’s parents can have owned one in the last three years ⁠⁸. The two cannot be combined, but either can be combined with a Virginia Housing grant ⁠⁷⁠⁸.

Applying in Virginia, from class to closing

1. Take the free class

   Register for Virginia Housing’s classroom, virtual or online course. Each co-borrower needs a certificate ⁠⁵.

2. Get pre-qualified by an approved lender

   Use Virginia Housing’s lender search or call 877-843-2123. Ask which first mortgage fits your credit score and whether a grant or the Plus Second Mortgage fits better ⁠⁵.

3. Check your area’s limit

   Compare your total household income with the August 2026 grant column for your region ⁠³.

4. Line up local money before you sign a contract

   Fairfax and Arlington pre-approve first. Prince William requires an information session before you write an offer. For DHCD funds, contact your locality’s provider ⁠¹²⁠¹¹⁠¹⁵⁠⁹.

5. Gather documents

   Expect pay stubs, two years of W-2s or tax returns, bank statements and IDs for all adults. The signed Exhibit E affidavit is also required ⁠⁴⁠¹².

6. Lock, reserve and close

   The lender locks the first mortgage, then reserves the grant. You sign the grant award letter at closing, and the grant appears on your Closing Disclosure ⁠¹.

If a county fund runs dry, Fairfax and Prince William close new applications until money returns, and you can reapply in the next period ⁠¹²⁠¹⁵. Other states are compared on the first-time homebuyer grants page, and other Virginia guides are on the Virginia page.