The following is a general overview of the Home-ownership program specific for Virginia. There are a number of other programs available to potential home owners in Virginia with similar program parameters and guidelines.

We have found over the years that certain programs are better suited for some individuals and fall short for others. We help each client carefully identify their individual needs, and abilities, and which program is the best match for them.
It can be somewhat confusing, and difficult to chose which program is the best one for you and your family. That is why we offer a FREE no obligation review and analysis of your individual profile to help you chose the best program to fit your needs


The Home-ownership Down Payment & Closing Cost Assistance Program operates through local partnerships with governmental entities, non-profit housing service providers, and mortgage lenders across the Commonwealth. DHCD is seeking to competitively maintain a regional network of grant administrators who offer housing counseling and pre-qualification screening for eligibility on a first-come, first-served basis to address all regions of the state targeting first-time home-buyers with incomes at or below 80% of the Area Median Income (AMI) as established by the U.S. Department of Housing and Urban Development (HUD). The program structure must promote equitable access to HOME funds by both entitlement and no entitlement communities based on income and credit criteria.

The assistance is offered as a forgivable loan to eligible home-buyers. PROGRAM DESCRIPTION PROGRAM GOAL: HOME-OWNERSHIP ASSISTANCE The Home-ownership Down Payment & Closing Cost Assistance Program is a flexible gap financing program that provides opportunities for first-time home-buyers to obtain homes that are safe, decent, and accessible. The long-term goal is sustainable housing and growth in personal wealth and equity for low-income Virginians. Applicants who submit proposals to administer HOME funds for DHCD must have a program of assistance outlined that would provide a mechanism to qualify eligible home-buyers based on actual financial need, on a first-come, first served basis. Applicants must demonstrate the capacity to identify target markets, housing stock and home-buyers to increase the numbers of homeowners in Virginia. Applicants must describe a clear plan of action which demonstrates their knowledge of, and past work with, the target markets, barriers to access, available qualified housing stock, and potential home-buyers who are either currently prepared or who will be prepared in the very near future to enter home-ownership.

The goal of “placing low- income persons in the position of home-ownership” is too vague; the goals of the program must be clearly defined and stated outcomes must be measurable. In order to describe the need for housing assistance costs of the target population applicants should not rely solely on waiting list information maintained by their organization. Organizations should collaborate with other local sources such as housing assistance waiting lists, other housing program grantees and administrators, social service agencies, area agencies on aging, and local building and fire officials to determine target populations.

Program designs that emphasize public/private partnerships will be given priority consideration. APPLIED FORMULAS FOR ALL HOME-ASSISTED UNITS Administrative requirements for the Home-ownership Down Payment & Closing Cost Assistance Program will follow the established guidelines specified in the HOME Final Rule (see The maximum amount of direct assistance to the home-buyer cannot exceed 10% of the sales price, and should be determined by a debt to income ratio analysis that does not exceed the maximum FHA standard HOME DPA Program Last Revised November 2015 5 on a first mortgage loan for housing costs and revolving debt. Home-buyers in localities of the state which have been designated as “high cost areas” or “chronically economically depressed” (see addendum A) may receive “up to” 20% of the sales price as the need demands. In addition, the Regional Administrator can provide an additional $2,500 in HOME subsidy to cover eligible closing costs not adequately paid by the seller.

HIGH COST/CHRONICALLY ECONOMICALLY DEPRESSED Localities: Albemarle Floyd Prince William Alexandria Frederick Pulaski Allegany Fredericksburg Rockingham Annandale Giles Russell Arlington Grayson Salem Bath Herndon Scott Bland Highland Shenandoah Buchanan King George Smyth Carroll Lee Spotsylvania Charlottesville Loudon Stafford Clark Madison Tazewell Craig Manassas Warren Culpepper McLean Winchester Dickenson Montgomery Wise Fairfax Nelson Wythe Falls Church Orange Fauquier Page PROGRAM REQUIREMENTS The Homeownership Down Payment & Closing Cost Assistance Program is designed to operate through local partnerships with governmental entities, non-profit housing service providers, and mortgage lenders across the Commonwealth.

Administrators selected to administer the HOME program funds must be units of local government or nonprofit organizations that are actively participating in housing programs on a regional basis. Administrators may be located in HOME-entitlement areas of Virginia as long as they also provide service through their organization to non-entitlement communities. The HOME program specifically requires: • Down payment and closing costs for identified populations where total family household income does not exceed 80 percent of the area median income; • Supportive services including preliminary home-buyer services; i.e., pre-qualification screening, and housing counseling services; • Access to HOME program funds must be offered on a first-come, first-served basis; and • Assisted housing and associated costs cannot exceed 95 percent of the area median home sales price which are established by HUD as the 203B limits.

HOME DPA Program Last Revised November 2015
I. CLIENT ELIGIBILITY: Participation in the program is limited to credit-eligible home-buyers at or below 80 percent of the area median income (AMI) as defined by HUD based on household size and geographic location of the assisted property. Home-buyers with total household incomes in excess of 80 percent AMI are not eligible for this assistance. HOME down payment and closing cost assistance is not an entitlement, but a limited public resource to be used to further first-time home ownership for those who without this assistance would not be able to move forward with a home purchase. Use the following links to review income tables and the maximum area sales price: httpss:// httpss://


1. Home-buyers must meet all eligibility requirements: a. Qualify as a first-time Home-buyer as defined by one of the following:
i. have never owned a home before; or
ii. have not held primary ownership in a principle residence within the most recent three year period;
b. Receive home-ownership counseling;
c. Complete a HUD-certified Home-buyer Education Course through a VHDA or Neighbor works® certified course;
d. Possess a signed purchase offer for a property (turn key at the time of settlement);
e. Demonstrate that their income does not exceed 80 percent of the AMI;
f. Contribute one percent of the sales price of the home from their personal funds if the income is between 50%-80% of the AMI, and if the income is less than 50% of the AMI, they can contribute $500 towards the purchase of the home.

2. NOTE: If purchaser puts down more than the required amount of cash to purchase a home, the additional cash will go towards the purchase of the home. If it is determined the purchaser will receive funds back at closing, then the HOME funds MUST be reduced by that amount. No FUNDS will be RETURNED or REIMBURSED (regardless of the source) to the purchaser at closing/settlement when HOME funds are awarded for down payment and/or closing cost assistance. The Administrator is responsible for reviewing the final HUD1 prior to closing. If it is determined that the purchaser is receiving cash back at closing, then the HOME funds “MUST” be reduced by that amount. If the purchaser is required to pay any costs up front that would have an effect on settlement, the administrator must make appropriate adjustments to prevent cash back at closing.

3. The Administrator’s home-buyer application must clearly disclose all program requirements and fees to the home-buyer. a. The purchaser must sign a home-buyer agreement form with the administrator for the down payment and/or closing assistance. b. All information and documentation must be retained by the Administrator for 5 years after the required affordability period from the date of loan closing. HOME DPA Program Last Revised November 2015 

4. Eligible properties must meet programmatic requirements of Mortgage Lenders and include the following:
a. Single-family property (one unit);
b. Two-unit property where one unit will be the principle residence of the purchaser and the second is a HOME rental unit;
c. Townhouse homes;
d. Condominiums
e. Manufactured home i. The manufactured housing must be connected to permanent utility hookups. The manufactured housing must be located on land that is owned by the manufactured housing unit owner, or on land for which the manufactured housing unit owner has a lease for a period at least equal to the applicable period of affordability.

5. Program guidelines:
a. Funding is limited to down payment and closing cost assistance for purchasers at or below 80 percent AMI. Purchasers can receive up to 10 percent or 20 percent (within the established approved areas by DHCD) of the sales price.
b. The maximum amount of secondary financing and other subsidies will be restricted to the lesser of 20% (including DHCD HOME funds) of the purchase price or appraised value.
c. Home-buyers with cash assets of 10 percent or more of the sales price will not be eligible for down payment and closing cost assistance (i.e. assets which cannot be liquidated without the applicant incurring a penalty- written verification will be required).
d. Loan packages submitted for funding consideration cannot exceed 95 percent of the loan to value (LTV) or a cumulative LTV of 108 percent including any other sources of subsidies. Administrators should be aware of the comparable sales prices in their targeted areas.
e. Home-buyers must meet the usual and customary mortgage underwriting criteria that demonstrate creditworthiness sufficient to obtain a mortgage loan commitment.
f. The sales price of the home must not exceed five times the borrowers’ household income, and the area median purchase price limits must be met.
g. A complete FHA appraisal must be conducted on all HOME-assisted properties. Home values may not exceed 95 percent of the area median sales prices (203B limits established by HUD).
h. All units of housing must meet the applicable Uniform Physical Condition Standards as established by HUD pursuant to 24 CFR 5.703 prior to final settlement or closing.
i. The home inspection must be conducted by a certified home inspector with separation of duties. Any required repairs notated on the inspection report will have to be repaired prior to closing and a re-inspection must be done to determine that all repairs were completed prior to closing and included in each client file.
j. HUD lead-safe provisions apply to all assisted home properties purchased. This includes a notice of lead hazard, visual assessment for lead base paint form, remedy of any lead problems, and re-inspection if applicable. All assessments must be conducted by a third-party HUD Certified, VA Lead Inspector or VA Risk Assessor.

Use the following link to access the HUD Lead Based Paint HOME DPA Program Last Revised November 2015 8 Visual Assessment Training Course: The files of the Administrator must include a written completed calculation of income for each home-buyer compared to applicable limits of the program. Any changes to the calculation of income up until closing must be properly documented in writing and signed by the client, and included in the file. If the property is two units, one of the units must be owner-occupied and the second unit must be a HOME-assisted rental unit. The rental requirements that apply include the rent must be restricted to someone below 80% of area median income, the maximum rent is the High HOME rent minus tenant paid utilities, there must be an executed lease that is for one-year and does not contain prohibited lease provisions, and the unit must meet housing quality standards (HQS) unless there is a local housing code that is more restrictive on occupancy. The income-certified low-income households must be approved in writing by the Local Administrator, with approval from the DHCD, and the home-buyer shall submit for written approval of the Local Administrator and the DHCD copies of all proposed leases prior to having them signed by any proposed tenant.

6. Affordability Period
a. The Period of Affordability is based on the direct HOME subsidy provided to the home-buyer that enabled the home-buyer to purchase the unit. A direct subsidy consists of any financial assistance that reduces the purchase price from fair market value to an affordable price or otherwise subsidizes the purchase (e.g., down payment or closing cost assistance). It is the responsibility of the program administrator to assure that all HOME funds are included in the calculation of the affordability period. Amount of Assistance or Subsidy Affordability Period by Years $1,000 – $14,999 5 $15,000 – $40,000 10 Amounts over $40,000 15
b. No monthly repayment is required on the forgivable HOME loan issued by DHCD. The applied subsidy will be forgiven at the end of the period of affordability.
c. Recapture: Home-buyers are subject to recapture restrictions to ensure that the home remains affordable consistent with the applicable period of affordability. DHCD’s program design incorporates the recapture provision consistent with the standards in the HUD HOME Investment Partnerships Program Final Rule 24 CFR 92.254. If the home-buyer sells or transfers title of the HOME assisted property, either voluntarily or involuntarily, during the Period of Affordability, the state will recapture, from the available net proceeds, the entire amount of the HOME investment from the home-buyer.

If there are no net proceeds or the net proceeds are insufficient to repay the HOME investment due, the state can only recapture the amount of the net proceeds, if any. The net proceeds are the sales price minus superior loan repayment (other than HOME funds) and any closing costs.

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