Updated November 25, 2020
3 min read
If you live in the birthplace of the nation, you know Americans like saving a little extra money. Unfortunately, when it comes to purchasing a new home, your bank account can take a toll when paying a down payment.
Luckily, an FHA loan is an option many first-time homebuyers are using to avoid high down payments and work with not-so-perfect credit scores. Continue reading to see if an FHA loan in Virginia is right for you.
Why Choose an FHA Loan in Virginia?
The overall cost of living in Virginia is well above the national average, making it important for residents of this historic state to save money where they can. An FHA loan is a great way to do that, and as of April 2019, the total value of FHA loans in Virginia was over $355 million! So whether you are looking to be in Richmond, Virginia Beach, or maybe Arlington, an FHA loan may be the best mortgage option when it comes to buying a home.
Benefits of FHA Loans in VA
- FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
- FHA mortgage rates are typically lower than conventional mortgage rates.
- FHA down payment and credit score requirements are typically lower than conventional loans
- Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
- FHA loans are assumable
FHA Loan Limits in Virginia
Generally speaking, in most of Virginia the baseline FHA loan limit of $314,827 applies, but in a place like Charlottesville, the limit balloons to $437,000 and the limit in the Washington D.C. area is even higher at $726,525. These numbers are adjusted annually, and vary due to the cost of living in each area. Use the link below to find the full list of Virginia FHA loan limits in 2019.
Are You Eligible for an FHA Loan in VA?
You may be eligible for an FHA loan, if you:
- Have 2 years of steady employment, preferably with the same employer.
- Have had steady income (or increasing income) in the past two years.
- Have had less than two 30-day periods of late payments on your credit report.
- Have declared bankruptcy no less than two years ago and have maintained good credit since.
- Have not been a party in a foreclosure for at least three years and have maintained good credit since.
- Anticipate your mortgage payment will be equal to or less than 30% of your gross income.
What Do You Need to Apply for an FHA Loan in VA?
Buyers must be able to provide the following information and documents as requested by lenders:
- The addresses of all your residences over the past two years.
- The names of your employers over the past two years.
- W2's for the past two years and current paycheck stubs.
- Your current gross monthly salary.
- Your Social Security Number.
- Names, addresses, and account numbers with balances on all checking and savings accounts.
- Addresses and loan information of any other real estate you owned.
- Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
- Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.
Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.