VHDA the Virginia Housing Development Authority was instituted in 1972 to help low to moderate families find affordable options for financing a home.
The federal definition of First Time Homebuyer is anyone that has not owned a primary residence in the past 3 years.
The difference between the VHDA programs and those on the Open Market is where VHDA gets their money. VHDA is a bond program. With the Bond program comes additional restrictions- income limits and sales price limits. For a complete list please visit www.vhda.com. In the Northern Virginia area the income limit is up to $120,900 for a family of 1-2 or $140,000 for a family of 3+
VHDA programs eliminate most of the reasons one puts off purchasing a home. The most common reason is lack of down payment. VHDA offers a program that allows up to 101.5% financing. What this means is not only will they allow the 96.5% that an FHA loan allows but will also allow the FTHB a 2nd trust for their down payment. If the borrower has over a 680 credit score they may also borrow up to 1.5% of the purchase price to be used for closing costs and prepaid items.
Many programs require a 640+ credit score. VHDA will allow credit scores of 620+. This is a great benefit to many borrowers.
The debt to income ratios on a conventional loan are 28/36 meaning that no more than 28 % of your gross income should go towards your housing ratio and no more than 36% of your gross income should be used for your housing plus any minimum monthly obligations. VHDA allows ratios up to 38/43 with compensating factors giving the borrower more purchasing power.
Often interest rates are lower than available on the open market also helping First Time Home Buyers by providing them with more purchasing power. VHDA often works closely with the County programs to offer additional benefit to First Time Home Buyers.
Recently VHDA has expanded its programs to include streamline refinancing on the FHA loans currently serviced by VHDA. This allows a borrower to refinance at a lower rate, even if the home is “upside down”. It also provides options to help cover the closing costs of the refinance. They may even me low to no-cost loan options available for those who qualify.
The Rapid Refinance program was instituted with a short window of opportunity to help those borrowers that purchased prior to the housing crisis that have interest rates over 6% and were in an interest only loan program by allowing them to refinance using a no doc program. This program also gave 1% credit towards the borrowers closing costs.
VHDA continues to strive to find solutions to help Virginia’s low to moderate income families find affordable solutions to their mortgage needs. Email me at sarah.c.pichardo or give me a call at (703) 929-1701 to let me show you how these programs may benefit you or someone you know.