Among the many benefits of the VHDA home loan, one of the most significant is the opportunity to claim a 20% annual mortgage interest tax credit on your income tax return. This credit is valid for the life of the mortgage and does not have to be repaid. Combined with the VHDA home loan’s benefits, this tax credit can save you thousands of dollars in federal taxes. You can combine this tax credit with a Mortgage Credit Certificate to maximize your savings.
While the amount of down payment may vary depending on the type of loan, the VHDA has a down payment assistance grant that starts at 3%. The VHDA also offers an interest rate discount on the loan, which can help you lower your monthly payments even further. While the application process for these programs can take up to a year, the benefits can be worth it. The down payment assistance grant may also provide you with some cash for the down payment.
Applicants must be first-time homebuyers. To qualify for a VHDA loan, you must have a low income, be a first-time homeowner, and complete a mandatory homebuyer’s class. Your credit score must be at least 620 and your debt-to-income ratio cannot exceed 45 percent. However, there are some qualifications. You must be an educator or a public education employee to qualify for a VHDA loan.
For first-time homebuyers, a down payment assistance grant may be your only option. This grant can cover up to 2.5% of the value of your home and does not have to be repaid. You must also meet income requirements for the area in which you are purchasing a home. If you meet these requirements, you will also qualify for a VHDA Mortgage Credit Certificate. There are many other benefits to applying for a VHDA loan.
The FHA Plus home loan is the most popular type of VHDA loan. This loan is technically two loans, one financed by VHDA and the other insured by the FHA. You can also borrow a portion of the home’s price with an FHA Plus loan, depending on the amount of your down payment and credit score. However, this second mortgage must not exceed the purchase price limits of the VHDA. So, it’s important to shop around and shop for the best deal.
The VHDA also offers second mortgages for qualifying borrowers. Both loans are designed to help qualified borrowers with closing costs. Unlike the USDA mortgage, a second mortgage is guaranteed for thirty years, meaning you can get up to 100% financing with just two loans. You can even get a free second mortgage for an existing mortgage. If you are considering applying for a VHDA loan, don’t miss this opportunity to finance your dream home. And remember to consult with a professional mortgage or tax professional before making any financial decisions.