Buying a Home in Alexandria | Popular Down Payment Programs for First Timers
Alexandria VA Homes For Sale - Let's face it, rents in Alexandria and Arlington have skyrocketed. When you couple that with the expenses of daily living which include commuting costs, food, and utilities, it can literally take years to save money for a down payment on a new house.
If you have solid credit, stable employment, and a good rent payment history, but don't have a lump sum of cash sitting around, you should take a look at the down payment programs that are available. Here are the most popular programs today:
VHDA - Virginia Housing Development Authority. This is the most popular down payment program in Virginia. VHDA offers grant funds (which means zero down payment and zero repayment), low options of 1% and 3% down, and grants for closing costs.
USDA - Rural Housing Program. No down payment, 100% financing. This program is open to buyers who are looking in more rural areas, such as western Prince William County, Loudoun County, and Stafford.
FHLB - Federal Home Loan Bank. Offers down payment assistance and extra incentives for law enforcement, teachers, healthcare workers, firefighters, and veterans.
VA - Veterans Administration. Up to 100% financing for active duty military, veterans, and eligible reservists. It's surprising to know that a lot of military members do not take advantage of this option. With a VA loan, buyers take advantage of a 30-year fixed rate, no mortgage insurance, and interest rates that are usually lower than conventional 30-year mortgages. If you are buying a luxury home, the VA does requires a small down payment. You don't have to be a first time buyer, and you can use this mortgage for homes in the upper end price range. Veterans who are also first-time buyers can couple a VA loan with a VHDA closing cost grant. This is especially helpful in a tight sellers market where sellers are not paying closing costs. With a VA closing cost grant, military buyers have the advantage of zero down payment, and zero out of pocket closing costs.
FHA - Federal Housing Administration. Requires a 3.5% down payment. An FHA mortgage offers more flexibility for buyers with credit scores below 700. This is a popular option for buyers with a good rental history and employment, but little savings.
NFCU - Navy Federal Credit Union. This offers 100% financing to all credit union members, including non-military. The interest rate is higher than market rate, but it is a 30-year fixed rate mortgage. Navy Federal's program is popular with military homebuyers who have their VA loan tied to another property.
NWFCU: Northwest Federal Credit Union. Offers 100% financing plus no mortgage insurance to members. This program is available to all buyers, not limited to first-time buyers or military.
Home Ready - Program offered by Fannie Mae. Minimum down payment of 3%. This program is open to first-time buyers and repeat home buyers with a credit score above 620.
For more information on these programs, click here and download our information flyer.
Over half of homebuyers are completely wrong about how much money is needed for a down payment. Traditionally, 20% was the norm, but with credit unions, state programs, and military benefits available, you don't have to strap yourself down to a multi-year lease. Let's talk about your options, all of them. Part of the mortgage approval process includes not only shopping lenders, but shopping for the right loan that fits your needs, and your long-term and short-term goals. Send me a quick message now, or text me at 703-623-8759 when you're ready.