First-Time Buyer's Complete Guide to Virginia

Before you start browsing listings, you need a realistic picture of what you can afford. Pull your credit reports from all three bureaus (Equifax, Experian, TransUnion) at AnnualCreditReport.com. Most Virginia lenders want to see a minimum credit score of 620 for conventional loans, though VHDA programs may accept scores as low as 620 with higher down payments, and FHA loans can go as low as 580.

For budgeting, a common guideline is to keep your total monthly housing costs (mortgage, taxes, insurance, HOA) below 28% of your gross monthly income. In Virginia, property tax rates vary significantly by locality. Fairfax County charges roughly $1.11 per $100 of assessed value, while Richmond City charges $1.20. Henrico County is lower at about $0.87. These differences can mean hundreds of dollars per month on the same-priced home.

Down Payment Assistance in Virginia

VHDA's HOMEownership Down Payment Assistance program offers grants that do not have to be repaid. The standard DPA grant covers up to 2% to 2.5% of the purchase price. For a $350,000 home, that is $7,000 to $8,750 in free money toward your down payment.

VHDA also offers a Closing Cost Assistance grant of up to 2% of the purchase price, which can be combined with the DPA grant. So on that same $350,000 home, you could receive up to $15,750 in combined grants. To qualify, you typically need a household income under the area's limit (which varies by county and household size) and must complete an approved homebuyer education course.

What to Budget For

• Earnest money deposit: Typically 1% to 3% of the purchase price in Virginia, due within a few days of your offer being accepted
• Home inspection: $400 to $600 for a standard single-family home inspection
• Appraisal: $450 to $650, required by your lender
• Closing costs: Typically 2% to 5% of the purchase price, though VHDA grants can offset a large portion
• Moving and setup costs: Budget $2,000 to $5,000 for local moves, more for long-distance

A pre-approval letter is non-negotiable in Virginia's competitive market. Without one, most listing agents will not even present your offer to the seller. A pre-approval is different from a pre-qualification: a pre-approval means a lender has verified your income, reviewed your credit, and confirmed a specific loan amount.

Virginia has a strong mix of lenders. Major banks like Wells Fargo and Bank of America are active, but local lenders such as Atlantic Union Bank, Virginia Credit Union, and Towne Bank often offer more competitive rates and faster closings. VHDA-approved lenders are listed on the VHDA website and are the only way to access VHDA programs.

What Lenders Look At

• Credit score: 620+ for conventional, 580+ for FHA, no minimum for VA loans (though most lenders want 620+)
• Debt-to-income ratio: Most lenders want your total monthly debts (including the new mortgage) below 43% of gross income
• Employment history: Two years of stable employment, though exceptions exist for recent graduates and career changers
• Assets and reserves: Lenders want to see enough in savings to cover 2 to 3 months of mortgage payments after closing

Get pre-approved by at least two lenders so you can compare rates and fees. Multiple credit inquiries for a mortgage within a 14-day window count as a single inquiry on your credit report, so rate shopping will not hurt your score.

In Virginia, working with a buyer's agent typically costs you nothing out of pocket. The seller traditionally pays the commission for both the listing agent and the buyer's agent as part of the sale proceeds. This means you get professional representation, negotiation expertise, and market knowledge at no direct cost.

Following the 2024 NAR settlement, there are new disclosure requirements around buyer agent compensation. Your agent will explain upfront how they are compensated and may ask you to sign a buyer representation agreement. This is standard practice and protects both parties. Ask your agent to walk you through the agreement before signing.

Look for an agent who specializes in the specific Virginia market you are targeting. Northern Virginia, Richmond, and Hampton Roads are fundamentally different markets with different price points, competition levels, and negotiation norms. An agent who knows your target area will be able to tell you whether a home is priced fairly, what comparable properties sold for, and how to structure an offer that wins.

Questions to Ask a Potential Agent

• How many first-time buyers have you worked with in this area?
• Do you have experience with VHDA and down payment assistance programs?
• What is the typical timeline from offer to closing in this market?
• How do you handle multiple offer situations?
• Can you recommend local lenders, inspectors, and title companies?

Virginia has a diverse housing stock, from 200-year-old Colonial homes in Richmond's Fan District to brand-new construction in Ashburn. Knowing what to look for is critical, especially in a state where many homes carry the character (and maintenance requirements) of their age.

Tips for Touring Virginia Homes

• Check the foundation: Virginia's clay soil expands and contracts with moisture changes. Look for cracks in foundations, especially in older homes. Minor hairline cracks are normal; horizontal cracks or stair-step cracks in brick are warning signs.
• Ask about the HVAC system: Virginia summers are humid and hot. Central air conditioning is essential. If the home relies on window units, factor in $8,000 to $15,000 for a new central system.
• Look at the roof: Asphalt shingles in Virginia typically last 20 to 25 years. If the roof is older than 15 years, budget for replacement soon.
• Check for water damage: Virginia gets about 43 inches of rain per year. Basements in older homes may have moisture issues. Look for staining on walls, musty smells, and check if there is a sump pump.
• Verify flood zone status: Parts of Hampton Roads, the Northern Neck, and the James River corridor are in FEMA flood zones. Flood insurance can add $1,000 to $3,000 annually. Your agent can pull the FEMA flood map for any property.
• Test the commute: Virginia traffic, especially on I-95, I-66, and I-64, can dramatically impact your quality of life. Drive the commute during rush hour before making an offer.

Virginia Market Conditions to Watch

Inventory and competition vary greatly by region. Northern Virginia (Arlington, Fairfax, Loudoun) is the most competitive, with homes frequently receiving multiple offers within days. The Richmond metro is more balanced but heats up in the spring. Hampton Roads tends to be more affordable with longer days on market, giving buyers more negotiating room.

Virginia uses a standardized purchase agreement form developed by the Virginia REALTORS association. Your agent will help you fill it out, but understanding its key components puts you in a stronger position.

Earnest Money in Virginia

Earnest money (also called a good-faith deposit) shows the seller you are serious. In Virginia, the typical deposit ranges from 1% to 3% of the purchase price. In competitive markets like Northern Virginia, 2% to 3% is common. This money is held by the title company or settlement attorney in an escrow account and is credited toward your closing costs at settlement.

If you back out of the contract within the terms of a contingency (inspection, financing, appraisal), you get your earnest money back. If you back out for a reason not covered by a contingency, you risk forfeiting it.

Home Inspection Contingency

Virginia law does not require a home inspection, but skipping one is almost never a good idea. The standard Virginia contract includes a home inspection contingency that gives you a set number of days (typically 7 to 10 business days) to have the home inspected and request repairs.

In Virginia, you can negotiate repairs, a price reduction, or a seller credit at closing based on the inspection findings. If you and the seller cannot agree, you can walk away and get your earnest money back as long as you are within the contingency period.

Virginia also requires sellers to provide a Residential Property Disclosure Statement (RPDS), which lists known material defects. Sellers are not required to investigate, but they must disclose what they know. Review this document carefully before finalizing your offer.

Other Key Contract Terms

• Financing contingency: Protects you if your loan falls through. Rarely waived by first-time buyers.
• Appraisal contingency: If the home appraises below the purchase price, you can renegotiate or walk away.
• Settlement date: Virginia closings typically take 30 to 45 days from ratification.
• Home warranty: Common in Virginia for the seller to provide a one-year home warranty (typically $400 to $600). Ask for it.

Virginia is a "wet settlement" state, which means the lender must fund the loan on the day of closing (or within two business days). This is actually a buyer protection: it means you will not be left waiting for funds after you have signed everything and received your keys.

Closings in Virginia are typically conducted by a settlement attorney or title company, not the real estate agents. You will receive a Closing Disclosure from your lender at least three business days before settlement. Review it carefully and compare it to your Loan Estimate.

Virginia-Specific Closing Costs

In total, buyers in Virginia should expect to pay 2% to 4% of the purchase price in closing costs. On a $350,000 home, that is roughly $7,000 to $14,000. VHDA closing cost assistance can offset up to 2% of this amount.

VHDA First-Time Homebuyer Programs

VHDA (Virginia Housing Development Authority) is the primary source of state-backed homebuyer assistance in Virginia. Their programs include:

• VHDA Fixed Rate Loans: 30-year fixed-rate mortgages at below-market interest rates. Available through VHDA-approved lenders only.
• Down Payment Assistance Grant: Up to 2% to 2.5% of the purchase price as a grant (not a loan). Combined with a VHDA first mortgage.
• Closing Cost Assistance Grant: Up to 2% of the purchase price to cover closing costs.
• VHDA Plus Second Mortgage: A second mortgage at 0% interest with no monthly payments, forgivable over time, for buyers who need more assistance.

VHDA income limits vary by county and household size. In 2026, the limits range from approximately $97,000 in lower-cost areas to $145,000+ in higher-cost areas like Northern Virginia. There is also a purchase price limit, which varies by locality.

Mortgage Credit Certificate (MCC)

Virginia offers a Mortgage Credit Certificate program that allows first-time buyers to claim a federal tax credit equal to 20% of the mortgage interest paid each year. On a $300,000 mortgage at 6.5% interest, that is about $3,900 per year in tax credits for the life of the loan. The MCC can be combined with VHDA loans and down payment assistance, making it one of the most powerful and underused tools available to Virginia first-time buyers.

Local Down Payment Assistance Programs

In addition to VHDA programs, many Virginia localities offer their own down payment assistance:

• Fairfax County: First-Time Homebuyers Program with up to $50,000 in assistance for qualifying buyers
• City of Richmond: Richmond Metropolitan Habitat for Humanity and city-specific grant programs for qualifying buyers
• Hampton Roads: Several cities offer CDBG-funded down payment assistance for low-to-moderate income buyers

1. Not getting pre-approved before touring homes. In a competitive Virginia market, you will lose to buyers who already have their financing locked down. Get pre-approved first.
2. Ignoring VHDA programs. Thousands of Virginia buyers leave money on the table every year because they do not know about VHDA down payment and closing cost grants. Even if you think you make too much, check the income limits for your county.
3. Skipping the home inspection. In hot markets, some buyers waive inspections to make their offer more competitive. This is especially risky in Virginia, where older homes may have foundation issues, lead paint, or outdated electrical systems.
4. Not budgeting for property taxes. Virginia property tax rates vary dramatically by locality. A home in Fairfax County will have very different annual taxes than the same-priced home in Chesterfield County.
5. Making large purchases before closing. Do not buy a car, open new credit cards, or make other large purchases between pre-approval and closing. Your lender will pull your credit again before funding, and new debt can kill your loan approval.
6. Forgetting about HOA fees. Many Virginia communities, especially in Northern Virginia and newer developments, have HOA fees ranging from $50 to $500+ per month. These are on top of your mortgage payment and must be factored into your budget.
7. Underestimating closing costs. Virginia closing costs for buyers typically run 2% to 4% of the purchase price. Plan for this from day one.