Virginia Housing First-Time Homebuyer Programs 2026: Complete Guide

By Ken Byrne, NMLS #187129 · ALCOVA Mortgage LLC, NMLS #40508 · Updated May 2026

If you're trying to buy your first home in Virginia in 2026 — especially in Northern Virginia, where the median price in Fairfax County now hovers near $750,000 — the down payment is almost always the hardest part. Saving 3% to 5% on a $600,000 house means setting aside $18,000 to $30,000 in cash, on top of closing costs, reserves, and moving expenses. For most first-time buyers earning $90,000 to $150,000, that math takes years.

That's where Virginia Housing (formerly known as VHDA) comes in. The state's housing finance agency runs a coordinated set of mortgage and down payment assistance programs designed specifically for first-time and lower-to-moderate-income buyers. Used together correctly, these programs can drop your out-of-pocket cash to closing into the low four figures — sometimes zero.

This guide walks through every active Virginia Housing program in 2026, the 2026 income and purchase price limits, who qualifies, how to stack programs together, and the step-by-step application process. We'll also be straight about what's not available — the popular Mortgage Credit Certificate (MCC) tax credit has been suspended since May 2023 and has not returned to the 2026 lineup.

Virginia Housing 101: Who They Are

Virginia Housing is the Commonwealth of Virginia's housing finance authority. It's a self-supporting, nonprofit public corporation — not a state agency funded by taxpayers — that uses bond financing to provide below-market interest rates and down payment assistance to qualifying buyers. The agency was previously known as the Virginia Housing Development Authority (VHDA), and you'll still see "VHDA" used interchangeably in lender documents and county housing program literature.

Virginia Housing doesn't lend directly to you. Instead, it works through a network of approved lenders — ALCOVA Mortgage is one of them — who originate, underwrite, and close Virginia Housing loans on the agency's behalf. That means you apply for a Virginia Housing loan the same way you'd apply for any mortgage: through a participating loan officer.

2026 Program Lineup at a Glance

Here's how the active 2026 Virginia Housing programs stack up against each other:

Virginia Housing Down Payment Assistance (DPA) Grant

The DPA Grant is the most popular Virginia Housing benefit because it's exactly what it sounds like — a true grant. The money is given to you to cover your down payment, and you never pay it back. There's no second lien recorded against your house, no payment, no balloon, no payoff. It simply offsets your cash to close.

DPA Grant: 2026 Key Figures

• Grant amount: Up to 2.5% of the sales price (varies by loan type — typically 2% on conventional, 2.5% on government).
• Use of funds: Down payment only (not closing costs).
• Minimum credit score: Generally 620 for government loans, 640 for conventional.
• Must be paired with: A Virginia Housing first mortgage.
• Homebuyer education: Required before closing.
• First-time buyer status: Required (no homeownership in the prior 3 years), except in federal target areas.

DPA Grant in Action: $500,000 Loudoun County Townhouse

Take a Loudoun County buyer purchasing a $500,000 townhouse with a Virginia Housing conventional loan requiring 3% down ($15,000). With a 2% DPA Grant, Virginia Housing contributes $10,000 of the down payment. The buyer is responsible only for the remaining $5,000 — plus closing costs. That cuts the down payment requirement by two-thirds.

Plus Second Mortgage

Where the DPA Grant is free money, the Plus Second Mortgage is borrowed money — but on favorable terms. It's a second-lien mortgage from Virginia Housing that piggybacks on your first mortgage and covers both your down payment and your closing costs.

Plus Second Mortgage: How It Works

• Amount: 3.5% to 5% of the sales price (depending on first mortgage loan type).
• Term: 30 years, fixed rate.
• Rate: Set by Virginia Housing; typically near or slightly above the first mortgage rate.
• Use of funds: Down payment, closing costs, prepaids — flexible.
• First-generation buyer bonus: A reduced interest rate is available on the second mortgage if neither parent has owned a home in the past three years.

A buyer using FHA Plus with a 3.5% down payment requirement could have the entire down payment covered by the Plus Second Mortgage — and then layer the DPA Grant on top for additional cash-back at closing. That's how some Virginia Housing borrowers walk into closing with little or no money out of pocket.

Trade-Off: You're Adding a Second Payment

The Plus Second Mortgage is structured as a fully amortizing 30-year loan. That means a separate monthly payment on top of your first mortgage. For a $15,000 second mortgage at, say, a typical Virginia Housing second-mortgage rate, you'd add roughly $80 to $120 per month to your housing cost. That's the cost of getting in with little money down — your total monthly payment goes up.

Community Homebuyer Program (CHP)

The Community Homebuyer Program (CHP) is Virginia Housing's flagship product for buyers at or below 80% of the area median income (AMI). It pairs a low fixed-rate conventional first mortgage with reduced or waived private mortgage insurance — and it stacks with the DPA Grant and Plus Second Mortgage.

Who Qualifies for CHP

• Household income at or below 80% of the AMI for the county where you're buying.
• Minimum credit score of 660.
• First-time homebuyer (not required in federal target areas).
• Property must be a primary residence (no investment, no second homes).
• Completion of Virginia Housing's free homebuyer education course.

The CHP loan is structured as a 97% loan-to-value conventional product — meaning only 3% down — but with reduced mortgage insurance compared to a standard Fannie Mae or Freddie Mac low-down conventional loan. For a lower-income buyer in Northern Virginia, that PMI reduction alone can save $80 to $200 per month.

Granting Freedom Grant (Disabled Veterans)

Granting Freedom is a separate Virginia Housing grant — up to $8,000 — designed to fund accessibility modifications for veterans and active-duty servicemembers who have a service-connected disability. Examples include wheelchair ramps, widened doorways, accessible bathrooms, and stairlifts.

It's not a down payment program — but it pairs naturally with a VA loan or VA Plus loan for disabled veterans buying their first home in Virginia. With Fort Belvoir, Quantico, and the Pentagon all anchoring Northern Virginia's veteran population, this is a quietly important program in the DMV market.

FHA Plus, VA Plus & USDA Plus Loans

"Plus" is Virginia Housing's shorthand for a first-mortgage product (FHA, VA, or USDA) combined with the Plus Second Mortgage. Each one solves a different problem:

FHA Plus

For buyers with credit scores between 620 and 680 or modest savings. FHA's 3.5% down payment is fully financeable through the Plus Second Mortgage. FHA also tolerates higher debt-to-income ratios (up to 50% in some cases) and is more forgiving of credit history. The trade-off: FHA mortgage insurance (both upfront and monthly) is permanent on most loans now.

VA Plus

For veterans, active-duty service members, and qualifying surviving spouses. VA loans already offer 0% down — so what does VA Plus add? It covers your closing costs and the VA funding fee, which can be 2.15% to 3.3% of the loan amount. For a $500,000 home, that's $10,750 to $16,500 in funding fee alone. Pairing VA with Plus puts true zero-cash-to-close within reach.

USDA Plus

For buyers purchasing in USDA-eligible rural areas — which, surprisingly, includes large portions of outer Loudoun County, Fauquier County, Stafford County, and much of West Virginia. USDA itself offers 0% down. Plus Second handles closing costs. Combined household income must meet USDA's income limits, which are tied to the local AMI.

2026 Income Limits by County

Virginia Housing's income limits are set by metropolitan statistical area (MSA) and household size, and they're updated each year. Northern Virginia's higher cost of living translates to higher allowable incomes than the rest of the state. The figures below are approximate ranges for 2026 — verify the current limit for your specific county and household size with your loan officer or directly with Virginia Housing before structuring an offer.

Figures are 2026 approximations. The Community Homebuyer Program (CHP) uses lower limits tied to 80% AMI. Always confirm current limits before applying.

2026 Sales Price Limits

There's also a cap on how much the house itself can cost. Like income limits, sales price limits are set by MSA. The price limit doesn't apply to the appraised value — it applies to your purchase price.

2026 approximations. Higher limits apply in federally designated target areas. Verify with your loan officer.

How to Qualify for Virginia Housing Programs

Across all Virginia Housing programs, the eligibility framework is roughly the same. You'll need to meet each of the following:

Credit Score Benchmarks by Program

Other Requirements

• First-time buyer status: No homeownership interest in the past 3 years (waived in federal target areas).
• Primary residence: The home must be your primary residence. No second homes, no rentals.
• Homebuyer education: Virginia Housing's free online or in-person course must be completed before closing.
• Debt-to-income (DTI): Generally capped at 45–50% depending on loan type and compensating factors.
• Maximum loan amount: Capped by the agency's purchase price limit for your MSA.

Step-by-Step Application Process

Here's the typical path from initial conversation to closing day on a Virginia Housing loan:

Combining Programs & Stacking Strategies

The real power of Virginia Housing comes from stacking. Here are the most common — and most powerful — combinations:

Maximum Down Payment Coverage

FHA Plus + DPA Grant + First-Generation Bonus. An FHA loan covers the bulk of the purchase. The Plus Second Mortgage covers your 3.5% down payment and closing costs. The DPA Grant adds another 2.5% as free money. If you're a first-generation buyer (neither parent has owned a home in the prior 3 years), you may get a reduced rate on the Plus Second. Cash to close: often under $1,000.

Lowest Total Monthly Payment

CHP + DPA Grant. If you're under 80% AMI, this is usually the cheapest monthly payment available. CHP cuts your PMI dramatically. The DPA Grant covers your down payment. You skip the Plus Second Mortgage entirely — so you don't add a second payment to your monthly obligation.

Veteran Zero-Cash-to-Close

VA Plus. VA's 0% down + Plus Second covering closing and funding fee. For service-disabled veterans, the VA funding fee is already waived, freeing up the Plus Second to cover closing costs entirely. For a disabled veteran also buying a home that needs modifications, the Granting Freedom grant can layer in for accessibility work.

Common Mistakes to Avoid

Conclusion & Next Steps

Virginia Housing's 2026 program lineup is one of the most useful — and most overlooked — resources for first-time buyers in the Commonwealth. Between the DPA Grant, the Plus Second Mortgage, the Community Homebuyer Program, and the various government Plus combinations, a buyer earning $90,000 to $150,000 can routinely walk into a $500,000–$700,000 home in Northern Virginia with under $5,000 out of pocket.

The hard part isn't the math. It's matching your specific situation — your income, your credit profile, your target county, and your savings — to the right combination of programs. That's not something you figure out by reading a guide. It's what a Virginia Housing–approved loan officer does on a 15-minute phone call. Ken Byrne has been originating Virginia Housing loans in the DMV for years and can walk you through the entire stack on a single call.

Two clear next steps:

• Get pre-approved. A 10-minute application returns a clear answer on which Virginia Housing programs fit you.
• Start your homebuyer education course early. It's a hard requirement and a free 6-to-8-hour online class — knock it out while you shop.

Frequently Asked Questions

Glossary