Over the past month or so I have been talking to a number of potential first time home buyers in the Richmond area. They are all renting and the rent rates continue to go up so they feel it may be better for them to buy a place of their own. But with the interest rates at such high levels and the prices not coming down and even the fact that they are competing with so many other buyers, it has made many of them apprehensive about moving forward to buy that first home.
And with all of this, many feel that they need to have a lot more money in savings before they can even begin to think about buying a house.
But there are some options available to you. In this post, let’s talk a little bit about some of the financing options you may want to consider as you make your decision on whether or not to buy a house!
VIRGINIA HOUSING DEVELOPMENT AUTHORITY (VHDA)
Virginia Housing Development Authority (or VHDA) is a great resource for a first time homebuyer. They offer great loan products as well as grant money. There are lots of different options available here. Not all lenders in the area offer VHDA loans but if you are interested you should definitely find a lender who knows about the VHDA financing options and which loan product would work best for you. Check them out on their very informative website here!
HOUSING OPPORTUNITIES MADE EQUAL (HOME)
This is another wonderful resource that we have here in the Richmond area. They offer education, guidance counseling, credit recovery classes and much more. Check them out on their very informative website here!
SOUTHSIDE COMMUNITY DEVELOPMENT & HOUSING CORPORATION (SCDC)
This is another wonderful non profit in our community that not only offers things like grant money, but is also involved in developing neighborhoods with affordable housing! They offer down payment assistance programs if you are looking to purchase a home in the City of Richmond or Henrico County. They may also offer a SPARC program in which the Virginia Housing approved lenders can offer a 1% mortgage rate reduction to eligible first time home buyers! Check them out on their very informative website here!
RICHMOND REDEVELOPMENT HOUSING AUTHORITY (RRHA)
Many people think of Richmond Redevelopment Housing Authority as being involved only in rentals in the City of Richmond; however, they have an interesting program for qualified Housing Choice Voucher families to use their subsidy towards monthly homeownership expenses. They are also working with some of their partners to redevelop homes in some areas of the city, which are then sold to buyers who have an income below 80% of the Adjusted Mean Income (AMI) for the city. They also have a Greenwalk program to redevelop homes into Earthcraft certified homes for first time home buyers with an income below the 80% of AMI. Check them out at their website here!
TEACHER NEXT DOOR PROGRAM
If you are a teacher or even a school employee, you may be able to use the Teacher Next Door program to help you get into your first home. And as of June 1, 2023, the program has now been revised to include not only teachers and school employees, but also police officers, firefighters, nurses, medical professionals, etc. But the home needs to be qualified as a “HUD Good Neighbor Next Door Home” in order to be able to qualify for this program. Those will be listed on the HUD website! See more information on their website here!
MAGGIE WALKER COMMUNITY LAND TRUST (MWCLT)
This non profit has been in the Richmond area for several years. Their goal is to provide perpetually affordable homes to families with modest incomes throughout Richmond’s neighborhoods. Homes that have been sold through this program have been in neighborhoods such as the Carver neighborhood, the VCU area, Church Hill, etc. Learn more about this program on their website here!
VIRGINIA FIRST TIME HOME BUYER SAVINGS PLAN
This program was passed by the General Assembly a number of years ago but I don’t know that many buyers I have talked to are aware of it. It does allow any Virginian to set aside up to $50,000 to be used on the costs of closing on a new home! The nice thing about this is that the interest and capital gains is free of Virginia taxes forever. For many of my buyers who are getting married, they have been able to utilize this by getting money instead of wedding gifts so that it can be put into the savings account to help them buy their first home. Here is a website that has a great summary of this program!
YOUR LOCAL BANKS
Many of the local banks are offering downpayment assistance programs. For instance, Bank of America has affordable housing programs that offer down payment assistance grant money. Chase has a $5k closing guarantee. Truist offers a number of programs and mortgage for first time home buyers. Banks such as Village Bank and C&F Mortgage also offer First Home Loan Bank of Atlanta grant money, while Fulton Mortgage offers First Home Loan Bank of Pittsburgh grant money. You may wish to check with your bank or credit union if they are also offering grant money or special loan programs for first time home buyers.
As you can see, there are lots of options available for you if you are purchasing your first home. If you are thinking about purchasing a home but have lots of questions (and most first time home buyers do have questions), feel free to contact me and we can sit down and discuss!
