First-Time Homebuyer Programs in West Virginia

Updated: October 21, 2023

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For first-timers, the process of buying a home can be challenging. Consider applying for a first-time homebuyer program if you aim to purchase a property in West Virginia.

MoneyGeek delves into the available homebuyer financing options in West Virginia to help you choose the best program for your needs and budget.

What Is a First-Time Homebuyer Program & How Can It Help?

Purchasing your first home is a big financial decision. Since down payments can be quite expensive, you may need to take out a loan for financial assistance. Despite the wide range of possibilities, your ideal West Virginia first-time homebuyer program will depend on your goals and financial situation.

The size of your down payment, which is the amount you typically pay upfront, can significantly impact the number of monthly loan payments you'll need to make. A larger down payment may lower your mortgage's interest fees.

Federal and state-specific homebuyer programs can provide financial assistance to make your payments more manageable. However, qualifying for these programs depends on your credit score, desired loan amount and other unique criteria. For instance, the West Virginia Housing Development Fund offers 15-year loans with a 2% interest rate.

Based on your situation, you can choose from zero-down-payment loan programs like USDA or VA loans or those with a low down payment, such as an FHA, FHA 203(k) or conventional loans.

Zero-Down-Payment Loan Programs

The USDA and VA loan programs are two popular zero-down-payment programs. Homebuyers under these programs are not obliged to make a down payment when purchasing a home.

USDA Loans

The U.S. Department of Agriculture (USDA) has several home lending programs for potential homeowners looking for financial help.

Single Family Direct Home Loans is one of the mortgage programs issued by the USDA. To qualify for a direct loan, applicants must meet low-income limits in their area.

You can use funds from this loan to repair, build, renovate or relocate a home. These mortgages also cover the water and sewage system costs and typically require no down payment.

Borrowers must also meet citizenship requirements, agree to use the property as their primary residence and require safe and hygienic accommodation to qualify for USDA loans. Additionally, eligible properties must be no more than 2,000 square feet and a market value not exceeding the appropriate local loan limit.

USDA also offers Single Family Guaranteed Loans to those with a relatively moderate household income.

VA Loans

A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs issued through private lenders, including banks and mortgage firms.

VA mortgages offer significant benefits like lower interest rates and flexible credit requirements that simplify approval. VA home loan programs help eligible veterans, service members and surviving spouses to purchase, refinance and maintain a home.

Unlike conventional mortgages, VA loans require no down payment. Additionally, you are not required to buy private mortgage insurance.

The VA loan is a lifetime benefit once you receive it. You can use it repeatedly, and you are even allowed to have multiple active VA loans at once.

A Certificate of Eligibility (COE) is one of the most important requirements when applying for this type of loan. Once you have a COE, you can apply for the following VA home loans, depending on your qualifications:

  • Home purchase loan
  • Cash-out refinancing
  • Interest Rate Reduction Refinance Loan (IRRRL)
  • Native American Direct Loan (NADL) program

Low-Down-Payment Loan Programs

A low-down-payment loan program allows you to purchase a home with a down payment of under 20% of a property's purchase price. Conventional and FHA loans are the two options.

Fannie and Freddie (Conventional) Loans

Established by Congress, Fannie Mae and Freddie Mac play a significant role in the nation's home finance system. The firms make loans more obtainable to potential buyers by helping maintain the mortgage market's liquidity, stability and affordability.

Conventional loans are not government-sponsored and make up most of the loans guaranteed by Fannie Mae and Freddie Mac. While these loans are considered conventional or conforming, each firm has its own guidelines to follow. In particular, when assessing a prospective borrower's financial profile, which typically includes the credit history and amount of debt.

For conventional loans, the loan limit is $647,200 in most counties, but it can be as much as $970,800 in high-cost counties. In most cases, if your down payment is less than 20%, you'll have to pay mortgage insurance.

FHA Loans

Although you don't have to be a first-time buyer to qualify, FHA loans might be useful for those who are. These mortgages offer a simpler qualification process than most conventional home loans. An FHA loan could also be a valid option if you have less-than-perfect credit.

Since the Federal Housing Administration insures FHA loans, you can make a down payment for as little as 3.5% if you have a satisfactory credit score. Depending on your needs, you can use the funds to refinance your mortgage, buy a home or pay for renovations.

However, you should be aware that FHA loans have significant drawbacks. Depending on your county, you can only borrow a certain amount. You will also need to purchase private mortgage insurance — which may increase your premiums — to protect the lender if you default.

Your lender must comply with specific rules when you apply for an FHA loan. Mortgage interest rates and loan terms may significantly vary among lenders based on your credit score and the down payment size.

FHA 203(k)

Your lender must comply with specific rules when you apply for an FHA loan. Mortgage interest rates and loan terms may significantly vary among lenders based on your credit score and the down payment size.

Homebuyers can finance the purchase and renovation of a home with a single mortgage thanks to FHA 203(k) loans. Borrowers looking for a cheaper way to pay for renovations, particularly in high-cost locations, may want to consider an FHA 203(k) loan. This type of mortgage typically has less strict eligibility conditions than other home loans because the Federal Housing Administration (FHA) insures them.

You can use FHA 203(k) mortgages for the following purposes:

  • Renovating the sewer or plumbing systems
  • Putting in or fixing gutters, downspouts and roofs
  • Replacing or installing flooring
  • Landscaping
  • Ensuring disabled access
  • Improving the home's energy efficiency
  • Removing health and safety risks

A licensed contractor usually carries out the improvements paid for, with completion subject to FHA appraisal.

The down payment is as little as 3.5% if you have a 580 credit score or 10% if your score is between 500 and 579.

Key Takeaways

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USDA loans: Lenders typically want a minimum credit score of 640.

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VA loans: These loans are accessible to active-duty and retired military people and their surviving spouses.

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Conventional loans: They refer to any mortgage loan not backed or insured by the government.

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FHA loans: You can put down as little as 3.5%, and they are easier to qualify for than conventional loans.

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FHA 203(k) loans: You can use them for most simple home renovations, except for luxury upgrades.

West Virginia Homebuyer Programs

You could also opt for West Virginia first-time homebuyer programs to help you purchase a home or pay the down payment. The programs are only accessible to the state's residents.

West Virginia Housing Development Fund

You can borrow anywhere from $5,000 to $10,000 as a 15-year fixed-rate loan toward your home's purchase at a 2% interest rate.

Wood County HOME Consortium’s Single Family Housing Opportunity Program (SHOP)

The applicant must be a first-time homebuyer, submit a $500 application fee and meet income eligibility requirements for this low-interest loan.

Homebuyer Assistance Program (HAP)

Borrowers who meet the requirements can get a deferred interest-free loan of up to $14,500 to cover their closing fees and down payment.

FAQs for First-Time Homebuyer Programs in West Virginia

To help you learn more about first-time homebuyer programs in West Virginia, MoneyGeek answered commonly asked questions.

Does West Virginia have any first-time homebuyer programs?
What qualifies me as a first-time homebuyer in West Virginia?
Can you buy a house in West Virginia with no down payment?
Who can help me with my down payment on a house in West Virginia?