Buying your first home in Virginia is an exciting milestone, but the process can feel overwhelming. Between saving for a down payment, navigating mortgage options, and understanding closing costs, there's a lot to learn. This comprehensive guide walks you through everything you need to know—from state-specific assistance programs to market conditions across Virginia—to help you buy your first home with confidence.
Virginia's housing market in late 2025 presents both opportunities and challenges for first-time home buyers. Understanding current conditions helps you make informed decisions about when and where to buy.
Statewide Statistics (Oct-Nov 2025)
The market is transitioning from the extremely competitive conditions of 2021-2023 to a more balanced environment. While still technically a seller's market (under 6 months of supply), buyers now have more time to make decisions and slightly more negotiating power.
Housing market experts predict Virginia's market will continue to stabilize through early 2026. Mortgage rates hovering around 6-7% have tempered buyer demand compared to the pandemic-era surge, but Virginia's strong job market and population growth continue to support home prices.
The best opportunities for first-time buyers may emerge in:
You don't need to be buying a home for the literal first time to qualify as a "first-time home buyer" for assistance programs.
This means if you previously owned a home but sold it (or lost it to foreclosure) more than three years ago, you regain first-time buyer status and can access programs designed for first-time purchasers.
Some Virginia assistance programs also extend first-time buyer benefits to:
First-time buyer designation unlocks access to exclusive benefits:
Lenders typically use these ratios to determine affordability.
Max monthly housing payment as % of gross income.
Includes: Principal, Interest, Taxes, Insurance, HOA
Max total monthly debt as % of gross income.
Includes: Housing + Car + Student Loans + Cards
Virginia's median household income is approximately $87,000 annually. With the median home price at $409,382, the income-to-home-price ratio is about 21%, meaning homes are priced reasonably relative to incomes compared to many other states. However, this varies dramatically by region (NoVA vs Rural).
Approximations based on 30-year mortgage at 6.5% interest, 3.5% down payment.
| Annual Income | Max Home Price | Monthly Payment | Est. Down Payment |
|---|---|---|---|
| $50,000 | $200,000 | $1,400 | $7,000 |
| $60,000 | $240,000 | $1,680 | $8,400 |
| $75,000 | $300,000 | $2,100 | $10,500 |
| $90,000 | $360,000 | $2,520 | $12,600 |
| $100,000 | $400,000 | $2,800 | $14,000 |
Many first-time buyers focus solely on the mortgage payment. Don't forget these costs:
Example Total Cost Breakdown (Virginia median $410,000 home)
Cash Needed to Close
Estimated Monthly
Choosing the right mortgage is one of the most important decisions you'll make. Virginia first-time buyers have access to several loan types, each with distinct advantages.
Most Popular for First-Time Buyers
Standard Choice for Strong Credit
For Veterans & Active Military
For Rural & Suburban Areas
Best for buyers with moderate income looking in areas like Shenandoah Valley, Southside Virginia, or Southwest Virginia.
Virginia offers some of the most comprehensive first-time home buyer assistance in the nation. These programs can provide thousands of dollars in down payment and closing cost help, making homeownership accessible years sooner than saving alone would allow.
Administered by Dept. of Housing and Community Development (DHCD). Provides forgivable loans to help with down payment and closing costs.
A newer initiative providing higher assistance amounts for very low-income buyers.
Free money that never needs to be repaid.
Fairfax County First-Time Homebuyers:
Access to Affordable Dwelling Units (ADUs) priced significantly below market ($95k-$200k range). Strictly for income-qualified buyers.
Loudoun County:
Prince William County & Manassas:
First-Time Homebuyers Program offers up to 6% DPA for low-to-moderate income buyers.
Alexandria:
Flexible DPA up to $50,000 and "Cardinal Path" shared equity homes.
Richmond (City):
Hampton Roads:
Several cities (Norfolk, Newport News) utilize HOME funds for local DPA specific to neighborhood revitalization.
*Example only. DPA reduces your out-of-pocket need drastically. Stacking programs is possible but has rules.
Most common. A second mortgage with $0 monthly payment. Gradually forgiven over 5-15 years. If you move early, you repay a prorated amount.
Free money. Never needs to be repaid, even if you sell the home immediately. Amounts are typically smaller (2-3%).
You save money, program matches it (e.g., 4:1). Requires time (6-12 months) to build savings.
Myth: "DPA increases my monthly payment."
Reality: Most DPA is a silent second mortgage with $0 monthly payments. It sits in the background until you sell or refinance.
Myth: "I have to be extremely poor to qualify."
Reality: Income limits are often 80% AMI. In high-cost NoVA, a family of 4 earning $100k-$120k often qualifies.
Myth: "DPA makes me less competitive."
Reality: Sellers generally cannot tell whether you are using DPA or your own funds. Your offer looks the same.
Check credit scores (dispute errors), save for costs, and calculate a realistic budget. Avoid opening new credit cards or making large purchases!
Pull reports from AnnualCreditReport.com. Pay down balances below 30% utilization.
Complete required free course from Virginia Housing to unlock assistance programs.
Learn about budgeting, credit, mortgage terms, and the process. Certificate valid for 2 years.
Submit W-2s, tax returns, and bank statements to a lender.
Verify your income and assets. Receive a pre-approval letter showing your maximum loan amount to show sellers you are serious.
Find a pro experienced with first-time buyers and local DPA programs.
They guide you through the search, negotiation, and closing process. Look for strong communication and local knowledge.
Search for homes. Check condition, location, and potential issues.
Drive neighborhoods. Attend open houses. Don't fall in love with the first home you see. Check for age of roof and HVAC.
Negotiate price, terms, and seller concessions.
Include contingencies for financing and inspection. Request seller to pay some closing costs (up to 6% for FHA).
Inspector checks for defects ($400). Lender appraises value ($500).
Review the inspection report carefully. Negotiate repairs or credits. Appraisal confirms home is worth the price.
Lender verifies all info. Freeze your finances—don't change jobs!
Underwriter reviews employment, assets, and credit again. Respond to requests for documents quickly.
Verify repairs are done and house is empty/clean.
Ensure no new damage has occurred and appliances are working.
Sign 50+ pages, pay remaining costs, get keys!
Bring ID and cashier's check. Sign mortgage documents. Receive deed and keys. Welcome home!
Closing costs are fees to finalize the purchase, typically 2-5% of the price. They are separate from your down payment.
| Category | Typical Cost | What it covers |
|---|---|---|
| Lender Fees | $900 - $1,500 | Origination, underwriting, processing, credit report. |
| Third-Party Fees | $1,000 - $2,500 | Appraisal, title search, title insurance, survey. |
| Government Fees | $500 - $1,500 | Recording fees, transfer taxes ($3.33 per $1,000). |
| Prepaids & Escrows | $1,500 - $4,000 | Property tax reserves, homeowners insurance premium. |
| TOTAL | $8,000 - $20,000 | ~2% to 5% of purchase price |
| FHA | 580+ |
| Conventional | 620+ |
| USDA | 640+ |
| VA | 620+ (typ) |
Score impact on $300k loan:
Improving from 580 to 680 saves ~$200/month.
Employment History: 2 years of steady employment preferred. Gaps may need explanation. Changing jobs within the same field is usually okay.
Self-Employed: Need 2 years of tax returns. Lenders average your net income (after write-offs) over 2 years.
Debt-to-Income (DTI) Ratio: Max 43% usually. Calculated as Total Monthly Debt Payments / Gross Monthly Income.
Tip: Paying off a small monthly debt (like a $200 car payment) can increase your purchasing power by $35,000-$40,000.
High Cost • Competitive
Median: $664,000 (Arlington $796k+).
Best For: High-income earners, federal employees, tech workers.
Strategy: Use Loudoun/Fairfax programs. Look in Manassas/Stafford for affordability. Condos are a good entry point.
Moderate • Balanced
Median: $389,975.
Best For: Families, remote workers, those wanting urban culture without DC prices.
Strategy: Focus on Henrico/Chesterfield for schools. Look for up-and-coming city neighborhoods (Church Hill, Northside).
Military • Affordable
Median: $376,500.
Best For: Military families, beach lovers, first-time buyers.
Strategy: VA loans are dominant here. Check flood zones carefully. Chesapeake offers great value for families.
Very Affordable
Median: ~$295,000.
Best For: Budget-conscious buyers, retirees, outdoor enthusiasts.
Strategy: Excellent market for tight budgets ($50k-$60k income). Low property taxes. Good for remote work.
High Cost • University
Median: $520,000+.
Best For: University employees, higher-income buyers.
Strategy: Inventory is limited. Prices high relative to income. Look in surrounding counties (Albemarle, Greene).
USDA Territory
Median: $150k - $250k.
Best For: Buyers wanting land/space, remote workers.
Strategy: Use USDA loans for 0% down. Lowest prices in state. Check job market/internet access.
Why: You don't know your real budget and sellers won't look at your offer.
Solution: Get pre-approved before you look at a single home.
Why: Leaves no room for repairs, furniture, or emergencies. You become 'house poor'.
Solution: Buy below your maximum approval amount.
Why: You miss structural issues or safety hazards costing thousands to fix.
Solution: Always get a professional inspection. Never waive it.
Why: Focusing only on the mortgage payment and forgetting taxes, insurance, and HOA.
Solution: Budget for PITI + Maintenance + Utilities.
Why: Results in higher monthly payments, more interest paid, and longer PMI.
Solution: Put down 5-10% if you can afford it comfortably.
Why: Focusing on lowest monthly payment often means paying more in interest or fees.
Solution: Look at the APR and total loan cost.
Why: Falling for staging or cosmetic updates while ignoring major defects or bad location.
Solution: Stick to your 'must-haves' list. Look past the paint.
Why: You miss out on thousands in grants because you didn't take the required class.
Solution: Take the free Virginia Housing course early.
Why: Buying a car or furniture on credit before closing changes your DTI.
Solution: Freeze spending. Buy nothing on credit until you have keys.
Why: You risk losing your earnest money deposit if the loan fails or house is bad.
Solution: Keep inspection and financing contingencies.
Why: Zillow/Redfin estimates are often inaccurate. Online calculators use averages.
Solution: Trust your Loan Estimate and Appraisal.
Why: You have no cash left for movers, utility deposits, or immediate repairs.
Solution: Budget an extra $3,000-$5,000 for the first month.
Minimum 3-3.5% down plus 2-5% closing costs. For a $300k home, typically $15k-$24k total. With DPA, you might need only $2,500-$5,000.
Yes. Lenders include student loan payments in DTI ratios. If deferred, they typically use 1% of the balance or the income-driven repayment amount.
No. Most first-time buyers put down 3-5%. 20% down is only required to avoid mortgage insurance on conventional loans.
Yes. FHA and Conventional loans allow 100% of the down payment to come from family gifts. You need a signed gift letter.
Yes. Many programs have income limits up to 80% of Area Median Income. In high-cost areas like NoVA, that can be $90k-$150k depending on household size.
Typically 45-75 days from pre-approval to closing. House hunting varies, but contract-to-close is usually 30-45 days.
You don't need it. Scores of 620-680 still qualify for most loans, just at slightly higher interest rates. FHA allows down to 580.
First-time buyer programs require you to live in the home as your primary residence, usually for at least 1 year. After that, you can typically rent it out.
Yes, if you have contingencies (inspection, appraisal, financing). Without contingencies, you risk losing your earnest money deposit.
Buying your first home is one of the most significant decisions you'll ever make. While the process may seem complex, thousands of Virginians successfully become homeowners every year—many with modest incomes and limited savings.
No impact on credit score to check
Last updated: November 25, 2025
Sources: Virginia Housing, Virginia DHCD, Virginia REALTORS®, Zillow, Redfin, LendingTree, Bankrate, ClosingCorp, HUD, and local Virginia housing authorities.
Disclaimer: Virginia Lending Hub is a lead generation service connecting homebuyers with licensed mortgage professionals. We are not a lender and do not make credit decisions. Information provided is for educational purposes. Loan terms, rates, and program requirements subject to change. All loans subject to underwriter approval. Consult with licensed professionals for personalized advice.