HOMEownership Down Payment Assistance Program
The three primary costs associated with the process of purchasing a home, down payments, closing costs (costs and fees that are part of receiving a home loan), and prepaid costs such as the establishment of an escrow account (for future payments of taxes and insurance), are sometimes the biggest hurdles toward homeownership that homebuyers face.
The Virginia Department of Housing and Community Development assist homebuyers with these costs through funds from the federal HOME Partnership Investment Fund (HOME). The program offers down payment and closing cost assistance to individuals and families whose income is at or below 80 percent of the Area Median Income (AMI). For example, a homebuyer meeting the income eligibility may receive up to10 percent of the purchase price of a home to go toward the down payment, plus up to $2,500 to pay for the cost of closing; i.e., attorney’s fee, title insurance, taxes, etc.
The HOMEownership Down Payment Assistance program operates through local partnerships with governmental entities, nonprofit housing service providers, and mortgage lenders across the Commonwealth. The program utilizes a network of grant administrators who offer housing counseling and pre-qualification screening for eligibility on a first-come, first-served basis to address regions of the state targeting homebuyers with incomes at or below 80 percent of the AMI. The program structure promotes equitable access to HOME funds by both entitlement and non-entitlement communities based on income and credit criteria. (There is an expectation that organizations in entitlement communities are also serving those within non-entitlement areas). Discounted first mortgage monies are made available by the Virginia Housing Development Authority (VHDA) for first-time homebuyers who are credit-eligible and can qualify for VHDA financing. Mortgages are originated through a VHDA-approved lender, or by the VHDA Mobile Mortgage Van.
HOME funding can be used with U S Rural Development products and community lending initiatives to address the needs of clients that cannot qualify for financing through VHDA or other VHDA-approved lenders. This type of flexibility assists in making the best use of all available loan resources to benefit clients below the AMI.
The funds used for down payment and closing costs are administered through local partnerships with governmental entities, nonprofit housing service providers, and mortgage lenders across the Commonwealth. Currently, a statewide network of administrators is under contract with DHCD to offer housing counseling and intake services for pre-qualification screening for eligibility. The funds are provided on a first-come, first-served basis. The program structure promotes equitable access to the fund by entitlement and non-entitlement communities and is based on income and credit criteria.
For more information, contact DHCD at: HFUNIT@dhcd.virginia.gov or (804) 371-7100.
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