First-time home buyer in Virginia: the honest guide

Everybody has advice for a first-time home buyer in Virginia. Your parents say you need 20% down. A coworker says student loans kill a mortgage. An app says your score is too low. Most of it is wrong, and the part that’s right comes with a number you can check. Here are the mechanics behind each of those myths, with Virginia numbers. When you’re ready to start, the order that works is a goal review, the application and documents, a verified pre-approval, then shopping.

Who counts as a first-time home buyer?

It’s not a have-you-ever. Fannie Mae and Virginia Housing both count you as a first-time buyer if you haven’t owned a home in the last three years. Owned a condo eight years ago? You’re likely first-time again. On a joint loan, every borrower gets checked.

Why it matters: on a standard conventional loan, first-time status is what opens 3% down (on a Fannie Mae loan, one first-time buyer among you is enough), and repeat buyers usually need 5% unless their income fits an income-limited program. On a $400,000 house, that’s $12,000 down instead of $20,000.

Two traps:

• A name on a deed counts as owning. If your partner isn’t on the mortgage, think hard before putting them on the deed. It makes them a homeowner, which can cost them first-time status when it’s their turn to buy. Ask a real estate attorney how to title it.
• Virginia’s savings account uses a stricter test. The first-time home buyer savings account, covered below, is for someone who has never owned a home, not just in the last three years.

Do you need 20% down to buy a house in Virginia?

No. Twenty percent is where conventional mortgage insurance goes away, not the minimum. The loan program sets the minimum:

Closing costs come on top of every one of these.

Twenty percent isn’t the magic number because a down payment is a weak lever on your payment. At an example rate of 6.5% on a 30-year fixed, every $1,000 you put down lowers principal and interest by about $6.32 a month.

The trade-off is mortgage insurance. On a conventional loan it’s temporary: with a good payment history you can ask to drop it at 80% of the original value, and it ends on its own at 78% on the original schedule if you’re current. Cash in the bank after closing does more for you than a slightly smaller payment. More on how much to put down on a house.

Is my credit score too low to buy a house?

Probably not. Just because you think your credit’s bad doesn’t mean your credit is bad. Three mechanics decide it.

The score that counts is the middle of three. Lenders pull all three bureaus and use your middle score. With two borrowers, the loan prices off the lower of the two middle scores: if your middle is 785 and your partner’s is 695, the loan prices at 695. The free app on your phone uses a different scoring model, so it rarely matches.

Each program has its own floor. FHA allows 3.5% down from a 580 score and 10% down from 500 to 579. As of November 2026, conventional loans that get an automated approval don’t carry a minimum score under Fannie Mae or Freddie Mac rules, but many lenders still set their own floor, often 620. Virginia Housing’s loans start at 640 for conventional and 620 for FHA, VA and USDA. In my files, FHA buyers between 580 and 639 usually need about two months of reserves. The lowest score I’ve closed was a 535, on FHA, with a larger down payment and six months of reserves.

Your score sets the price as much as the answer. Lender pricing moves in tiers, roughly every 20 points in my experience. Around a 680 middle score I price conventional and FHA side by side, because conventional mortgage insurance is priced by score and FHA’s isn’t. On the same $332,500 loan, 5% down on $350,000, the published rate cards put conventional PMI near $105 a month at a 760 score and $266 at a 680. FHA’s annual premium at that down payment is 0.50% whatever your score, about $139 a month, plus an upfront premium of 1.75% that’s usually rolled into the loan. If your income fits an income-limited conventional program, the answer can change.

The playbook for fixing a score is on how lenders read your credit score.

Can I buy a house with student loans?

Yes. Student loans aren’t a disqualifier; they’re a debt like a car payment, and they go into your debt-to-income ratio. The question is which monthly payment counts:

• Your credit report shows a payment above $0: that payment generally counts.
• It shows $0, or the loan is deferred or in forbearance: each program has its own formula. FHA and USDA count 0.5% of the balance each month. Fannie Mae uses 1% of the balance, or the payment from your loan terms, on a deferred or forbearance loan, and can accept a documented $0 payment on an income-driven plan. Freddie Mac counts 0.5% of the balance when your credit report shows $0.

On a $40,000 balance, that’s $200 a month on FHA and $400 on a deferred Fannie Mae loan counted at 1%. At an example rate of 6.5%, $200 a month is the principal and interest on about $31,600 of loan, so it can trim your maximum by roughly that much when you’re at the ratio limit.

In my files, current student loans are not a showstopper; a federal loan in default is a different conversation, and it comes first. If your payment is high and you’ve never applied for an income-driven plan, ask your servicer, though programs treat a $0 payment differently. Program-by-program rules are on student loans and your mortgage.

How long do I need to be at my job to buy a house?

Two years of work history is the typical standard, not a law, and it doesn’t have to be two years at the same desk. School counts: in my files, a job you landed straight out of college or a trade program, in that field, is history an underwriter understands. Military service counts too. Moving to a better-paying job doesn’t hurt you as long as there’s a real benefit, like more money. A gap of 30 days or more gets a short letter with dates and facts. Overtime, bonuses and a second job are different: lenders want a track record before that income counts. Fannie Mae recommends two years and can accept 12 months or more when the rest of the file is strong enough to offset the shorter history. How each kind of income is counted is on how much house you can afford.

What it really costs a first-time home buyer in the Richmond area

Total cash to close is your down payment plus your closing costs. On a low-down-payment loan I plan first-time buyers at about 3% down plus about 3% for closing costs and prepaids, roughly 6% of the price before any help.

Three things first-time buyers in Virginia miss:

• The recordation tax. Virginia charges 25 cents per $100 on the deed and on your loan, most localities add one-third of that, and it’s typically the buyer’s cost. On a $350,000 purchase with a $332,500 loan, that’s about $2,275 where the full local tax applies.
• Money at risk before closing. The appraisal is paid when it’s ordered, usually $450 to $600 in my files, and the inspection is separate, often $300 to $500. If the deal dies, that money is gone, and the next house needs a new appraisal.
• Taxes change at the county line. A $350,000 assessment carries about $3,115 a year of real estate tax in Chesterfield County ($0.89 per $100 in 2026) and $4,200 in the City of Richmond ($1.20), about $90 a month apart. So a cheaper house in the city can still carry a bigger tax bill than a pricier one in Chesterfield.

First-time home buyer programs in Virginia

Start with family. Nine times out of ten I’d rather see a gift from a parent or grandparent than an assistance program, because a gift adds no payment. It needs a signed letter saying it never has to be repaid, plus proof of where the money came from; if you’re paying it back, it’s a debt, not a gift.

Then Virginia Housing, the state’s housing finance agency. As of November 2026 its homebuyer help includes:

A bond loan is a Virginia Housing first mortgage for first-time buyers, with its own income and sales price limits. In the Richmond area, the grants cap household income at $96,000 for one or two people and $110,000 for three or more, with a $550,000 sales price limit, for applications on or after August 1, 2026.

Down payment assistance isn’t my specialty. I’ve mostly stayed away from it because those loans tend to close slower, and assistance that comes as a second mortgage usually adds to your payment (in one of my examples, a $2,000 monthly payment became $2,250), so if you can save the down payment yourself in a reasonable time, that usually costs less. Assistance fits when cash flow is the barrier and saving $10,000 to $15,000 isn’t realistic soon. Eligibility and the full rules are on Virginia first-time buyer programs.

Virginia’s first-time home buyer savings account

If you’re saving for your first home, this is the Virginia tax break most people have never heard of. You open a first-time home buyer savings account with a Virginia financial institution, and the interest and gains it earns, not your deposits, are subtracted from your Virginia taxable income. The rules, under Va. Code 36-170 to 36-175:

• Who it’s for: someone who lives in Virginia at settlement and has never owned a single-family home anywhere.
• What it pays for: the down payment and allowable closing costs on a home in Virginia, including condos, co-ops and manufactured homes.
• Limits: up to $50,000 of deposits per account, and $150,000 counting earnings. Cash and marketable securities only.
• The catch: money used for anything else loses the tax benefit you already claimed, plus a 5% penalty on that income. Death, disability, bankruptcy and a transfer to another eligible beneficiary are exceptions to the penalty.

I’m not a CPA, so run the tax side past one before you open it.

Your first home is box one of the Wheel of Wealth

Buying the house is step one of a plan, not the whole plan. I teach it as the Wheel of Wealth: four boxes, filled in order. Buy the primary residence, priced at about three to five times your income. Build six months of reserves. Fund retirement. Then invest. Then it repeats: in my planning a first home is held 3 to 7 years, the equity becomes cash, and the next home goes in with about 5% down while the rest refills the boxes.

Most first-time home buyers don’t make it past box number two, because the cushion goes to furniture. Start your reserves the day you close, and don’t furnish the whole house until they’re built. The Wheel is a planning order, not investment advice; the full walk-through is on the Wheel of Wealth.

Not ready yet? Start the 18-month plan

If you’re a year or two out, you’re fighting three battles at once: job stability, savings and credit. I build it as a written plan with a minimum and a stretch savings target, the credit items to fix in order, and when to apply for real, usually once you’re near 18 months on the job if overtime needs to count. Stay put at work, or move only for a real raise, and call me before you do. Put every bill on autopay and stack the savings. A good target is about 10% of the price in the bank, not because you’ll spend it all, but because cash on hand makes the file stronger.

What first-time home buyers should know before they start

The mistakes I see cost real money, and every one of them is avoidable:

1. Shopping at the bank’s maximum. That number is a ceiling, not a budget. Decide what you plan to spend and what you’re willing to spend before the first showing, because after five showings every house looks like a yes.
2. Leaving taxes, insurance and HOA out of the payment. On a fixed-rate loan, only principal and interest are fixed; the rest can rise, and escrow resets every year. Get the payment for the actual address.
3. Asking for a price cut instead of a seller credit. At an example rate of 6.5% with 3% down, a $10,000 price cut lowers your payment about $61 a month and your down payment by $300. A $10,000 seller credit, within the program’s limit, is $10,000 you don’t bring to closing.
4. Changing your credit or your job after the letter. No new card, no car and no job change without calling me first.
5. Pulling retirement money too early. If a 401(k) is part of the plan, it moves after conditional approval, not before.
6. Ruling yourself out. An old condo, a 640 score or student loans aren’t automatic no’s. Let me read the file before you decide.

The order that works is a goal review, the application and documents, a pre-approval that’s actually verified, and then shopping. The whole sequence and its timeline are in the home buying process, step by step. We all start somewhere, and the first one is the hard one.