Is 100% Financing Available for a Home Purchase in Virginia?

If you live in Virginia, the Virginia Development Housing Authority (VHDA) has a program called an FHA Plus loan that will allow you to finance up to 101.5% of the purchase price of a home. 

Here’s how it works:  you get a 1st mortgage for 96.5% of the purchase price and then you get a second mortgage for either 3.5% (qualified borrowers with credit scores ranging from 620-679) or a second mortgage for 5% (qualified borrowers with credit scores above a 680).  If you qualify for the second loan of 5%, that means the extra 1.5% leftover will be applied to your closing costs.  Here’s an example from a client scenario I worked up yesterday:

Purchase Price


1st Mortgage


2nd Mortgage (3.5%)


Total Down Payment


Closing Costs


1.5% from 2nd Loan


Seller Paid Closing Costs


Total Cash to Close


Here’s a breakdown of what that payment would look like based on today’s par interest rate from VHDA of 3.375% (apr 3.488):

1st Mortgage $629.43
2nd Mortgage $32.05
Estimated Taxes and Insurance $304.05
Estimated Monthly Payment $965.53

For program details and eligibility requirements, visit VHDA’s website.  If you live in Virginia and would like to see if you qualify for a VHDA Plus loan, please contact me for a free personalized mortgage analysis.


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