VHDA, The Virginia Housing Development Authority has developed a loan program called Homebuyer Tax Credit Plus.  

VHDA designed this program so homebuyers could take advantage of the $8,000 First-time Homebuyer Tax Credit to finance their closing costs and down payment.

How does the program work?  VHDA provides a first mortgage with a 30-year fixed rate at a competitive rate.  The Homebuyer Tax Credit Plus loan program offers a built-in second mortgage that allows borrowers to receive up to 5% of the home's sales price to help cover down payment and/or closing costs.  The second mortgage offers no payments and 0% interest for the first year.

There are 3 options from which borrowers may choose to repay the 2nd mortgage:

1.  paying it off with the first time homebuyer tax credit funds they receive after closing and after they file for the credit.

2.  paying it off over 29 years (after the first year of no interest and no payments is up)

3.  making principal payments during the first year to pay down the balance which will then be adjusted to fixed payment loan after the first year

Beginning with the 13th month, the second mortgage will have the same fixed interest rate as the first mortgage.

Time limit:  loan must close no later than November 30, 2009

Borrowers must meet the federal Firsttime Homebuyer Tax Credit eligibility requirements as well as VHDA's requirements.  Maximum househole income limits apply.  Minimum credit score of 620.  FHA qualifying ratios for payment and debt-to-income apply.  Borrowers must have a minimum of 1% of the sales price of their own funds in reserve or contributed to the purchase.  VHDA homeownership education class is required (can be taken online or in-person).

For more information, visit VHDA.com or contact Justin Williams:  757-692-3464 email:  justin.williams@prosperitymortgage.com