VHDA Home Buyer Tax Credit Plus - New Zero Downpayment Program

There are many wonderful people in Northern VA that do not make enough to gather substantial savings for home ownership - teachers, policemen, firemen are some of the folks that come to mind. Let's face it, homes are very expensive in this area - the difference between housing expense and salary is smaller here than in most of the country.

VHDA creates programs with these folks in mind - zero downpayment programs! The Home Buyer Tax Credit Plus has just been announced by VHDA. Combine this program with seller-paid closing costs and you are talking about buying a house for almost nothing upfront. Get your real estate agent and loan officer to help you figure out how to negotiate this.

This program is not directly tied to the tax credit, but it anticipates that the buyer will receive the tax credit within the coming year. Obtain a primary FHA loan of 96.5% and a second loan from VHDA of up to 5%. The best part is that the second loan doesn't require principal or interest payments for the first 12 months. The second loan is unsecured - VHDA is taking a risk for you! If you don't pay off the second loan within the first 12 months, it will be amortized starting in the 13th month at the same interest rate as the first loan and over 29 years. You must close on the house before Nov. 30, 2009 and meet the VHDA income and loan amount maximums.

The 5% can be higher than the maximum tax credit of $8,000 so the buyer must make a calculated decision about this. Also, keep in mind that the buyer may not receive the full $8,000. It is the buyer's responsibility to determine what kind of tax credit he/she will receive.

The interest rate may be slightly higher for VHDA - so this is ideal for people who can afford the monthly payment but cannot afford the upfront costs of buying a home.

Contact me with your questions about anything I have discussed here - this is just an overview and does not cover every circumstance.

More information about the VHDA program at: VHDA Tax Credit Plus Flyer