FHA Plus Loan Program

Low, fixed payments
FHA Plus is a VHDA-financed, FHA-insured home loan program designed to assist qualified borrowers who need downpayment and closing costs assistance.

Borrower(s) must have cash available equal to a minimum of 1 % of the sales price.

The second mortgage is limited to 5 % of the lesser of sales price or appraised value.

The interest rate for the first and second (both VHDA-financed) mortgage is slightly higher than VHDA's standard fixed-rate programs. The terms are 30 years.

The combined total of the two loans cannot exceed VHDA sales price limit.

VHDA's standard sales price and income limits apply.

Click here to view General Eligibility Requirements

The standard FHA application/disclosure along with FHA PLUS program disclosure and application are required.

Buydowns are not available.

Both payments are to be included in the FHA shelter ratio.

Closing for first and second mortgages will occur simultaneously.

Payments for the first and second mortgages will be due on the same date and paid to the same servicer.

Applicants must complete a VHDA-approved Homeownership Educational Program.

Additional information concerning the FHA PLUS program may be obtained by contacting your local VHDA originating lender or by contacting VHDA's originations department.

Federal Recapture Tax
Loans funded from this program could be subject to a Recapture Tax. The required payment of this tax is initiated by the sale or transfer of the financed property within nine years of the purchase date. This tax usually affects only owners who have realized unusually rapid increases in income in addition to significant appreciation in the value of the property.

Click here for an Online Recapture Calculator.

It is suggested potential buyers contact a tax advisor or the IRS for more information concerning the possibility of the payment of a Recapture Tax. Click here for an IRS explanation of the recapture of federal subsidy.