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How to Buy a Home with Low Income

August brought some changes to Virginia Housing Development Authority (VHDA) financing options that can benefit homebuyers in Loudoun, Fairfax, Prince William, Arlington, Alexandria and various other surrounding communities. More buyers may now qualify for loan options, so if you’ve been working towards homeownership, this might be for you!

VHDA, or Virginia Housing, exists to help Virginia residents “attain quality, affordable housing”. In addition to home loans, they “provide financing for apartment communities and neighborhood revitalization efforts”, offer homebuyer classes, and “help people with disabilities and the elderly make their homes more livable”.

Benefits for potential homebuyers include:

Little to no money down

Virginia Housing offers low-to-no money down on a variety of loan programs. Several of these loans can be paired with grants to minimize the amount of cash a buyer is required to bring to closing.

Increased Income Limits

Couples earning up to $145,000 annually can now qualify for VHDA loan programs.

The income limit for households with 3+ people has been increased to $170,000 annually.

According to the 2020 data release of the U.S. Census Bureau’s American Community Survey, the median household income in Fairfax, Prince William, and Arlington counties is below that limit, suggesting the pool of eligible borrowers may be larger than you think.

Increased purchase limits

As a result of an ultra-competitive market during the first 6 months of 2021, we saw the price of homes skyrocket. In a market where buyers were already struggling with low inventory, the previously lower purchase limits on VHDA loans, reduced the number of homes available to VHDA buyers even further..

VHDA borrowers can now shop for homes with a sales price of up to $550,000.

Financing options up to 101.5%

Buyers with a 680 credit score (and above) can finance up to 1.5% more than the sale price of a home. The program combines a first mortgage up to 96.5% with a 5% second mortgage (at a 30-year fixed rate) for a total of 101.5% financing.

Lower than a 680? Buyers with a 620 credit score can still qualify for 100% financing!

With zero down required, this could eliminate the need for cash-to-close. In the current competitive climate, it could also offer buyers a slight edge over the competition, if they are able to pair it with saved funds.

If any of these changes caught your attention, let’s chat — even if you weren’t eligible for VHDA financing previously! I’m happy to answer your questions about the current market and connect you with a lender partner who can walk you through the ins-and-outs of VHDA’s loan programs.

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