First-Time Homebuyer Programs in Virginia
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The priority is helping low-income families, so you’ll need to be within certain income limits. To qualify, you must be a first-time homebuyer, and you must be approved for a Virginia Housing first mortgage. Income is the crucial factor here — all household members cannot exceedVirginia Housing’s income limits. A first-time homebuyer in Virginia is defined as any family or individual who has never owned a home, or at least not in the past three years, depending on the region. It’s worth waiting it out if you’re nearing the three-year mark because these programs could provide a significant financial boost.
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Virginia Housing Plus Second Mortgage
If you have a credit score of 680 or higher, you can also finance part of your closing costs into the second mortgage. You must have 1 percent of the home’s purchase price in your savings.Income limitsare a priority, too, so make sure you’re not exceeding limits. A first-time home buyer savings account is a tax-advantaged savings account that incentivizes home buyers to save toward their future home purchase. Funds saved in these accounts can be applied, on a tax-advantaged basis, toward the down payment and closing costs of your first-home. Whether you have access to these accounts will vary by your state of residence.
HOME is a federally funded nonprofit that offers a Steps to Homeownership program, which provides homeownership classes, free financial counseling and down payment assistance. The Virginia Housing Development Authority has aroster of programsthat help first-time homebuyers as well as repeat homebuyers or those buying in a targeted area. Across the board, homebuyers will need to complete a homebuyers’ education course. Virginia Housing makes this requirement easy by providingfree online and in-person courses. The Virginia Individual Development Accounts program helps qualified individuals save for a down payment on a home.
Virginia Law
Mobile homes, travel trailers and other non-permanent structures are not eligible properties. You only need a 3 percent down payment, or even less if you opt into the second mortgage program — more details on that below. A “qualified beneficiary” can be you, or someone named by you, who has never owned a single-family home before. The beneficiary has to live in Virginia when they buy a single-family home. Individuals interested in saving should contact a VIDA intermediary listed below. VIDA Intermediaries determine eligibility and work with enrolled savers to prepare them to achieve their homeownership goals.
Eligible participants receive training, support and match funding on their savings. The current match rate is $8 for every $1 the participant saves, up to $4,000 in match. While we adhere to stricteditorial integrity, this post may contain references to products from our partners. The Act has in mind parents and grandparents who are interested in setting aside funds for future first-time home purchases in Virginia by their children and grandchildren. Note that the funds may only be used to purchase homes in Virginia, not other states. The Act requires the first-time home buyer to live in the home after purchase.
Virginia Credit Union First-Time Homebuyers Program
To be eligible, homebuyers must complete a homebuyers’ education class and two hours of individual financial counseling, and secure a Virginia Housing home loan for a new home within Alexandria city limits. Your account can have no more than $50,000 in principal and $150,000 in principal and interest. The cash in your savings account can only be used for expenses related to buying your first home, specifically your down payment and closing costs. Through the Virginia Housing Loan Combo program, first-time homebuyers in Virginia can combine a Virginia Housing mortgage, down payment assistance grant, mortgage credit certificate and a free homebuyer education course into a single package.
Whether you’re thinking ofsettling down in Charlottesville,buying a home in Blacksburg, or looking to retire in a Virginia city suburb, there is no shortage of housing options in Virginia. But wherever you decide to set down roots, be sure to take advantage of the array of first-time buyer assistance programs that Virginia has to offer. There is also a NeighborWorks Second Mortgage Loan Program that provides between 6 and 8 percent of your home’s purchase price in a loan that’s deferred until you sell your home or decide to refinance it.
The following states have enacted legislation establishing First-Time Home Buyer Savings Account programs. Individual states differ on what can and cannot be deducted, however once the funds are used, another form must be filed with the state, showing that the funds were used for approved purposes. Here’s a closer look at each program’s details, how to apply as well as the fine print.
The savings account is not subject to Virginia taxes, and with interest the account can grow tax-free to a maximum of $150,000. A one-time deposit of $50,000 may fund the account or it may be funded over time with smaller deposits. In addition to the Virginia Housing Conventional, Conventional No Mortgage Insurance and FHA loans, the agency offers VA and USDA loans, which might also be combinable with Virginia Housing grants and other forms of assistance. Here is a complete list of first-time homebuyer loan programs to consider.
As always, when you’re doing your research, read the fine print for any limitations. E. Upon being furnished proof of the death of the account holder, a financial institution shall distribute the principal and accumulated interest or other income in the account in accordance with the terms of the contract governing the account. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
You can subtract this income from your federal adjusted gross income to figure out your Virginia adjusted gross income. The MCC can only be issued by Virginia Housing through a participating lender before closing and it’s typically set aside for low- to moderate-income homebuyers. "Allowable closing costs" means a disbursement listed on a settlement statement for the purchase of a single-family residence in the Commonwealth by a qualified beneficiary. You’ve set up a first time home buyer savings account with your bank or another financial institution. In 2014, the REALTORS® association supported the enactment of a law that enabled first-time homebuyers to save up to $50,000 in a specially designated account for the purchase of a home.
Virginia Housing’s Granting Freedom program provides up to $8,000 in grant funds for members of the military to make their homes more accessible. The grant is available to Virginia veterans or servicemembers living with a disability because of an injury sustained in the line of duty. The funds can help pay for modifications such as ramps or wider doorways, and apply to work done in both owner-occupied homes and rental units. The state’s MCC is reserved for first-time homebuyers or buyers purchasing in a “Targeted Area.” MCCs can be leveraged each year you live in the home, and any unused credit can be carried forward for up to three years.
Ironically, the First-Time Home Buyer Savings Plan may give wealthy families an advantage in the real estate market because they may have sufficient funds to designate accounts under the Act, leaving other assets unrestricted. Families unable to take advantage of this new law will not enjoy the state tax-exempt growth. Perhaps creative estate planning professionals will find ways of using this Act to help their clients achieve their goals within the context of their unique circumstances. Consult qualified tax and estate planning advisors prior to using this new tool.
With your home loan in hand, you can apply for a special rebate of up to $2,500. Qualified homebuyers can credit up to 10 percent of their annual mortgage interest paid against their year-end tax liability. The tax credit is allowable every year for the life of the original loan until the loan is paid off or refinanced.
You must apply for a VA or RHS first mortgage via a lender partnered with Virginia Housing. Virginia Housing also offers a down payment assistance grant program, which gifts eligible homebuyers with between 2 and 2.5 percent of the home’s purchase price. With Plus Second Mortgage, you can secure another Virginia Housing loan that’s a maximum of 3 to 5 percent of your home’s purchase price, depending on your credit score and the type of Virginia Housing first mortgage you receive.
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