To: Originating Lenders
Date: March 12, 2015
Re: Down Payment Assistance Grant
In an effort to stimulate the spring home buying season for 1st time buyers in Virginia, Virginia Housing Development Authority is pleased to announce Down Payment Assistance grants. Because these resources are extremely limited, they will be targeted to those households earning no more than 80% of VHDA’s current income limits. Grants will be limited to 3% of the lesser of purchase price or appraised value. The borrower is under no obligation to repay the grant (No Note or Deed of Trust is executed for these funds).
The down payment assistance grant funds are available to borrowers obtaining a VHDA 1st mortgage (Conventional, FHA, or Fannie Mae NO MI) and may be used for down payment only.
Note: Loan programs requiring no down payment (VA, USDA) are not eligible for a DPA grant. In addition, these limited resources may not be used in conjunction with a FHA Plus mortgage or other downpayment/closing costs assistance including FLHB programs. Borrower(s) must meet all qualification requirements for first mortgage.
Reservation and Funding Process
VHDA is currently accepting reservations for the DPA grant. Prior to reserving DPA Grant funds, the VHDA 1st mortgage must be locked. DPA Grant funds are available only for eligible VHDA loans locked on or after March 12, 2015. Due to the limited availability of resources existing locks may not be cancelled and re-locked.
To reserve grant funds, the Originating Lender will fax a DPA Grant Reservation Form to 804 783-6728 (click here to view the form). A Confirmation/Awards letter and Obligations letter will be faxed to the lender to confirm the reservation of DPA grant funds. After reservation of DPA grant funds, should the lender determine the borrower(s) is no longer eligible for a VHDA 1st mortgage, or does not meet the income restriction for the DPA grant, please notify VHDA immediately.
The Originating Lender will fund the DPA Grant at the time of closing. VHDA will reimburse the lender upon purchase of the 1st mortgage.
The DPA Grant confirmation/awards letter must be included in the VHDA closing package for purchase. The HUD 1 Settlement Statement must reflect the VHDA DPA grant.
Note: No Note or Deed of Trust should be executed for these funds.
Limited AvailabilityVHDA has set-aside $5 million for the Down Payment Assistance Grant program. Because these resources are limited, they will be made available on a first-come, first-serve basis. Once funds have been exhausted there will be no additional allocation. Each request for DPA grant funds must be allocated by VHDA no later than June 30, 2015.