June is National Homeownership Month! Despite the challenges of the housing market – higher home prices, competitive and fast-paced home sales, lack of inventory – owning a home is still part of the American dream for many people. The Virginia Department of Housing and Community Development (DHCD) along with Virginia Housing, are collaborating to celebrate National Homeownership Month and showcasing programs to assist working families in purchasing their first home.
Virginia Individual Development Accounts
DHCD’s newly formed Microfinance Office encompasses programs that promote entrepreneurs along with supporting the ecosystem that helps small businesses thrive through the Virginia Individual Development Accounts (VIDA) program. VIDA helps individuals build their savings by matching their money dollar for dollar to earn up to $4,000 in matching funds. Individuals save $500 and earn $4,000 towards the down payment and closing costs of their home purchase.
Virginia Down Payment and Closing Cost Assistance
Within DHCD’s Housing and Community Development Division is the Virginia Down Payment and Closing Cost Assistance (DPA) program. This program provides grants to potential first-time home buyers that cannot typically qualify for conventional mortgage products. An eligible participant may receive up to 10 or 15 percent (depending on the area) of the sales price, plus up to $2,500 to pay for the cost of closing.
Sponsoring Partnerships and Revitalizing Communities
In addition to loans and down payment assistance, Virginia Housing offers the Sponsoring Partnerships and Revitalizing Communities (SPARC) program, a 1.00% adjustment to the interest rate below Virginia Housing’s comparable eligible products. Funds can be accessed through a Virginia Housing approved organization and are available until exhausted.
Each of these programs can provide an eligible homebuyer with assistance in acquiring their first home. Individuals must apply to each program separately, as each program has different requirements.
Participant / Program Layering Example
Shantel B. took advantage of two DHCD programs when she purchased her first home in Roanoke, Virginia. Shantel participated in the Southeast Rural Community Assistance Project, Inc. (SERCAP) Housing Counseling program to purchase her first home. After enrolling in the Housing Counseling program, she applied and was accepted in the VIDA program. Shantel diligently worked with Deborah Davoll, HUD Certified Housing Counselor with SERCAP, as she navigated her way toward homeownership.
“Shantel is a hardworking young lady who was a joy to work with and an excellent client. Shantel took advantage of all the group educational classes SERCAP offered and did not miss any of her monthly one-on-one housing counseling meetings”. – Deborah Davoll, HUD Certified Housing Counselor, SERCAP
Over a six-month period, Shantel saved more than $700 and earned $4,000 in VIDA matching funds. In addition, prior to her home purchase, she applied to a program through Federal Home Loan Bank and received a $7,500 grant for her home purchase. She then qualified for Virginia Housing’s SPARC funds which reduced her Virginia Housing loan interest rate by 1.00%, from 5.5% to 4.5%. Shantel’s overall assistance package gave her the down payment, closing cost and interest rate reduction she needed to secure her dream home. She’s an example of how purchase and down payment assistance programs can help first-time homebuyers achieve their homeownership goals within a challenging housing market.
Pictured above, Shantel B. (left) stands next to Deborah Davoll (right).
In celebration of National Homeownership month, DHCD and Virginia Housing are looking forward to expanding these programs within the Northern Virginia (NoVA) area. If you reside in the NoVA area and are interested in learning more about these programs and how to apply, view the Down Payment Assistance Programs Matrix for more information!