What is a VHDA Down Payment Assistance (DPA) Grant?

March 24, 2017

What is a VHDA (Virginia Housing Development Authority) Down Payment Assistance (DPA) Grant?


As the name suggests, a VHDA down payment assistance grant is a housing grant issued by the VHDA. The grant helps Virginia residents attain high quality and affordable housing via public-private partnerships with lenders, developers, local governments, community service organizations among other housing stakeholders. The grant is meant to help first-time home buyers get funds required for paying a down payment. To qualify for a VHDA down payment assistance grant, you have to meet certain conditions. Here’s more on that as well as other important information.

1. Qualification

To qualify for a VHDA down payment assistance grant, you must have a household income that is within the program’s limits. The limits vary depending on location, number of people per household as well as the size of the home loan. For instance, if you live in Richmond, Virginia MSA area and your household has 2 people or less, you need a household income of $68,000 to qualify for the grant. Your home loan limit should also be equal or less than $375,000. If you live in Richmond, Virginia area and your household has 3 or more people, your household income cannot exceed $78.720. The VHDA has household income limits set for every location.

For reference, the Richmond, Virginia MSA includes the counties of Amelia, Caroline, Charles City, Chesterfield, Dinwiddie, Goochland, Hanover, Henrico, King William, New Kent, Powhatan, Prince George, Sussex, and the cities of Colonial Heights, Hopewell, Petersburg, and Richmond.

The statewide households limit for Virginia should not have a household income that exceeds $58,880 (two or fewer people) or $67,680 (three or more people) to qualify for the grant. Maximum loan limits for such households is set at $251,900.

It’s also important to note that the grant is meant for first time home buyers. The VHDA considers you a first time home buyer if you have not owned and occupied a primary residence in the last three years. As such, the VHDA requires you to provide the last three years of tax transcripts.

Last but not least, borrowers can apply for an MCC (Mortgage Credit Certificate) via an approved lender, like J.G. Wentworth Home Lending, LLC, and acquire an MCC approval/commitment before closing. All individuals who are qualified to receive this grant are eligible for a MCC. A MCC allows for 20% of the total interest paid to be counted as a dollar-to-dollar credit issued against a person’s federal income tax liability. The remaining 80% is treated as a normal tax deduction.

2. Limits

The maximum grant amount a person can receive equals to 2.0% to 2.5% of the total sales price of their home. The down payment requirements for eligibility of a VHDA grant apply. The borrower must contribute the remaining 1.0% of the down payment. This down payment may come from any eligible source following FHA or Fannie Mae guidelines including a gift. Other down payment assistance may not be used.

3. Usability

The grant can only be used alongside eligible VHDA loans only. Grant funds can’t be combined with any other down payment assistance programs/resources such as FHA Plus. The funds should also be used for settling the down payment fee only. You can’t use the grant to pay for closing fees or any other costs.

4. Repayment

You are not expected to repay the amount you receive. In other words, the grant has no repayment.



A VHDA down payment assistance grant is a great way to raise down payment funds. Some people are unable to become homeowners because of the cost of down payment. Applying for a VHDA grant is a great place to start if you have problems raising the down payment for your first home loan.


Blake Bogese.


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