Virginia Housing Loans and Grants in 2026: A Roanoke Homebuyer's Guide to Down Payment Help

Almost every first-time buyer I meet asks a version of the same question: "Is there any help out there for the down payment, or do I just keep saving?" With mortgage rates where they are this fall, that question carries more weight than it did a year ago.

The short answer: Yes. Virginia Housing, the state's housing finance agency (many people still call it VHDA), offers loans with as little as 0% to 3.5% down, plus grants that never have to be repaid. Depending on the loan, a Down Payment Assistance Grant covers 2% or 2.5% of the price, and a Closing Cost Assistance Grant covers up to 2%. In the Roanoke area, the grants and bond loans are capped at a $500,000 sales price, with household income limits starting at $90,000. The catch is that each program has its own rules, so the right combination depends on your income, credit, and loan type.

Here's how the main programs work for buyers in Roanoke, Salem, Vinton, Botetourt, and the surrounding counties, and how I'd approach them.

Why Down Payment Help Matters More This Fall

Freddie Mac's weekly survey put the average 30-year fixed rate at 7.32% for the week of October 22, 2026, up from 6.19% a year earlier. Higher rates eat into the monthly budget, so many buyers have less room to save on top of rent.

At the same time, buyers have more to choose from. RVAR's September 2026 market data shows 1,642 homes in inventory across the Roanoke Valley, up 33% from a year ago, with a median sold price of $315,000. More inventory means more room to negotiate. Pairing that leverage with down payment help is one of the smarter ways I see first-time buyers get in the door right now.

Who Counts as a First-Time Homebuyer?

This trips people up. Under Virginia Housing's guidelines, you're generally considered a first-time homebuyer if you haven't owned and lived in a primary residence in the last three years. So if you sold a house five years ago and have been renting since, you may qualify again.

Some programs also allow repeat buyers when the home is in a designated Area of Economic Opportunity. Ask your lender whether the address you're considering falls in one.

Virginia Housing Loan Options at a Glance

Virginia Housing doesn't lend directly to you. You apply through an approved lender, who originates a Virginia Housing loan. Here are the first mortgage options it lists:

Each comes in "bond" and "non-bond" versions. Bond loans usually require first-time buyer status and come with income and price limits. They're also the ones that unlock most of the grants below. (Veterans: my post on VA loans explained covers the VA side in more depth.)

The Grants and Assistance Programs

Down Payment Assistance Grant

This is the program most people are asking about when they say "VHDA grant."

• Amount: 2% of the purchase price with a Conventional bond loan, or 2.5% with an FHA bond loan. It's based on the lower of the sales price or appraised value.
• Your contribution: You still need a 1% minimum down payment of your own.
• Repayment: None. Virginia Housing calls it "a true grant."
• Who qualifies: First-time buyers, or repeat buyers in an Area of Economic Opportunity, within income and price limits.

Here's a simple example with round numbers. On a $300,000 home with an FHA bond loan, the 3.5% down payment is $10,500. A 2.5% grant would cover $7,500 of that, and you'd bring at least $3,000 (1%) yourself. Closing costs are separate, so budget for those too. My guide to the hidden costs of buying a home walks through them.

Closing Cost Assistance Grant

• Amount: Up to 2% of the purchase price.
• Use: Closing costs, the USDA guarantee fee, or the VA funding fee.
• Loan pairing: It's built for VA and USDA (Rural Housing) bond loans, where the down payment is already $0. That combination can bring the cash needed at closing way down.

Plus Second Mortgage

The Plus Second Mortgage isn't a grant. It's a 30-year, fixed-rate second loan with no prepayment penalty that covers your down payment. If your credit score is 680 or higher, you can borrow an extra 1.5% above the purchase price to help with closing costs. It pairs with Virginia Housing FHA and Conventional loans and is open to both first-time and repeat buyers within the income limits.

The trade-off is simple: you bring less cash, but you carry a second monthly payment. I always recommend comparing the total monthly cost both ways with your lender.

Community Heroes Grant

Virginia Housing also offers a $10,000 Community Heroes Grant toward down payment and closing costs. It's available to eligible first-time buyers who work in, or retired from, qualifying careers, including:

• Educators and school personnel
• Childcare workers
• Law enforcement, firefighters, and first responders
• Healthcare workers
• Active-duty military and veterans, plus Coast Guard, National Guard, and Reserve members

It requires a Virginia Housing bond loan, and Virginia Housing says it can be paired with its other grants. Eligibility is confirmed through your approved lender.

FirstHome Dream

FirstHome Dream is newer. Virginia Housing says it offers qualified first-generation buyers an interest rate two percentage points below its posted rate. In Virginia Housing's description, that means you've never owned a home and your parents haven't owned one in the past three years. With rates above 7%, a two-point reduction is a big deal on a monthly payment. Your lender can check eligibility and connect you with a HUD-approved housing counselor.

2026 Income and Price Limits for the Roanoke Area

Roanoke and the surrounding counties fall under Virginia Housing's "All Other Areas of Virginia" limits. For applications on or after August 1, 2026:

With a Roanoke Valley median sold price of $315,000, a large share of homes on the market fit comfortably under that $500,000 cap.

My Step-by-Step Approach for Buyers Using These Programs

1. Take the free homebuyer class first. Virginia Housing requires homebuyer education for first-time buyers on many of its loans. The certificate is good for two years, so there's no reason to wait.
2. Talk to a Virginia Housing-approved lender. Ask them to run your numbers with and without each grant, and ask which combinations they can stack for you.
3. Get pre-approved before you tour. Grant programs take extra paperwork. Sellers want to see a lender who's done it before.
4. Shop with the limits in mind. I set up searches that stay under the $500,000 cap and fit your real monthly budget, taxes included. Property tax rates vary a lot from Roanoke City to Botetourt County. My Roanoke affordability guide and mortgage calculator can help you set a target.
5. Write a clean offer. Down payment help doesn't make your offer weaker. With more inventory this fall, buyers often have room to ask for seller help with closing costs too.

New to the whole process? Start with my first-time buyer's guide to purchasing a home in Roanoke.

Frequently Asked Questions

Is VHDA the same as Virginia Housing?

Yes. The Virginia Housing Development Authority now operates as Virginia Housing. Many lenders and buyers still say "VHDA."

Do I have to pay back the Virginia Housing down payment grant?

No. The Down Payment Assistance Grant and the Closing Cost Assistance Grant are grants, not loans, and don't have to be repaid. The Plus Second Mortgage is a loan and does have to be repaid.

Can I use Virginia Housing if I've owned a home before?

Possibly. If you haven't owned and occupied a primary residence in the last three years, you're generally treated as a first-time buyer. Some programs are also open to repeat buyers, especially in Areas of Economic Opportunity.

What credit score do I need for a Virginia Housing loan?

Virginia Housing lists a 640 minimum for its Conventional loans and scores as low as 620 for FHA, VA, and USDA. The Plus Second Mortgage adds closing-cost help at 680 and above.

Can I combine the Community Heroes Grant with the down payment grant?

Virginia Housing says the Community Heroes Grant can be paired with its other grants and with outside assistance. Your lender will confirm exactly what you qualify for.

Does using a grant make my offer less attractive to sellers?

Not when it's handled well. A strong pre-approval from an experienced lender and a realistic closing timeline matter far more to sellers than where your down payment comes from.

Ready to See What You Qualify For?

Down payment help is real, and for a lot of buyers it's the difference between buying next spring and renting for a few more years. The key is matching the right loan and grant to your situation, then finding a home that fits both the program limits and your monthly budget.

If you'd like to talk it through, request a buyer consultation or a showing. I'll help you map out a plan and connect you with lenders who work with these programs every day.

Rusty Hubbard, REALTOR® | Five Stone Realty Group, brokered by Real Broker, LLC