RICHMOND, Va., (Jan. 23, 2003) – This week VHDA announced programmatic changes to its 30-year fixed rate and FHA Plus loan programs. These changes reduce the funds necessary for loan closings and increase affordability through the financing of a portion of the closing costs.

The enhancements made to VHDA’s 30-year fixed rate conventional insured loans will now allow eligible first-time borrowers to finance closing costs, discount points, origination fee and pre-paid items in an amount up to 3 percent of the sales price (Flex Alt loans excluded). The ability to borrow up to 103 percent of the sales price will make homes more affordable for Virginians.

Changes to FHA Plus will allow homeowners to borrow 5 percent of the lesser of the sales price or appraised value of the maximum second mortgage amount. The previous borrowing limit was 3 percent. This increase will provide sufficient funds to eligible borrowers to finance their down payment and a portion of their closing costs.

“These changes were made in response to current market conditions and increased housing costs,” said VHDA Managing Director of Development Don Ritenour. “This is another way that we demonstrate our commitment to affordable housing.”

All program changes were effective Wednesday, Jan. 22. Please contact VHDA’s Single Family Development department at 1-800-227-8432 with questions regarding these changes.

VHDA is Virginia’s housing finance agency and is self-supporting. VHDA issues bonds to raise private capital to provide low-interest rate loans to consumers to purchase or renovate homes, and loans to developers for the development, rehabilitation and renovation of rental units to deliver safe, decent, affordable housing. Affordable Housing Starts Here™.

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