West Virginia First-Time Home Buying Assistance Programs & Grants for 2022

West Virginia First-Time Home Buying Guide

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    By Susan Guillory

    (Last Updated – 07/2022)

    With its proximity to Washington, D.C., Baltimore, and Pittsburgh, West Virginia is quickly becoming a popular place to live. The Mountain State also has some of the lowest home values in the nation.

    The housing market in West Virginia, however, has heated up: From May 2021 to May 2022, the median sale price rose 11%, to $292,500, according to Redfin, a real estate brokerage that analyzes housing market data across the country. Redfin put the median sale price nationwide at $430,600 in May, by comparison.

    If you’re a first-time homebuyer in West Virginia, know that city, state, and federal programs may be able to help you purchase your first home. With luck you’ve crunched numbers on a mortgage calculator, know your credit score, and understand mortgage basics.

    Who Is Considered a First-Time Homebuyer in West Virginia?

    Understanding the definition of a first-time homebuyer in West Virginia can help you determine if you’re eligible for assistance. At first glance, you might assume it means never having owned a house ever, but in most counties, and nationwide, it also means you haven’t owned a primary home in the past three years.

    With most state assistance programs, veterans also qualify, and buyers in “targeted areas” do not have to be first-time homebuyers.

    Recommended: First-Time Home Buyer Guide

    6 West Virginia Programs for First-Time Homebuyers

    Let’s start by looking at state programs for first-time and repeat buyers in West Virginia. These programs generally are designed for people with low to moderate incomes or who are in certain demographic groups.

    1. West Virginia Housing Development Fund: The Homeownership Program

    This program provides lower-interest fixed-rate loans with 30-year terms for first-time buyers. Up to 100% of the home can be financed. Some first-time homebuyers in West Virginia may also qualify for the down payment and closing cost assistance program.

    Borrowers must have a 640 minimum FICO® credit score and may be required to participate in homebuyer education.

    You can get current rates for the program, as well as household income and house price limits here .

    2. West Virginia Housing Development Fund: Movin’ Up Program

    Another program offered by the West Virginia Housing Development Fund is the Movin’ Up Program, which helps first-time or repeat buyers purchase a new home. Income must be $130,560 or under for a one- or two-person household, and $152,320 or under for households with three or more members. Home purchase price limits apply, as above.

    View current rates and income and house price limits for Movin’ Up here .

    3. West Virginia Housing Development Down Payment Assistance

    Down payment and closing cost assistance loans are available with the Homeownership and Movin’ Up programs in the form of a 15-year loan with a current rate of 2%.

    The loan can be up to $10,000 for the Homeownership program and up to $8,000 for Movin’ Up.

    4. Charleston Homebuyer Assistance Program

    Lower-income first-time buyers looking to purchase a house in Charleston or Kanawha County may want to look into the Home Blend program , which offers forgivable loans of up to $128,000 with a 10-year repayment term at 0%. The borrower takes out a mortgage from a participating lender for 80% of the purchase price; the additional 20% is provided as the 0% loan forgiven monthly.

    Borrowers are required to invest a minimum of $500, have “acceptable” credit, and complete a homebuyer education workshop.

    5. Martinsburg Homebuyer Assistance Program

    If you’re a first-time homebuyer looking at a home in Martinsburg or Berkeley, Jefferson, or Morgan counties, you might want to look into deferred no-interest loans that can be used for a down payment and closing costs. The loan may be forgiven if you live in the home for the five-year loan period.

    To qualify, you must have been employed for over one year, meet income limits, have adequate funds to be approved for a mortgage, and invest a minimum of $500 toward the purchase of a home.

    For more info, contact Nancy Strine at [email protected] or 304-264-2131, ext. 278.

    6. Wood County First-Time Homebuyer Program

    As described by the city of Parkersburg , lower-income people searching for or building a home in Wood County may apply for a mortgage, with a second loan of up to $25,000 deferred for 10 years.

    Wood County HOME Consortium applies an approved amount and then a participating lender finances the balance for 20 years. The consortium’s portion of the loan will be for a 10-year period at 3% after the first loan is paid.

    You must meet income eligibility criteria. A $500 application fee is refundable if you aren’t approved.

    How to Apply to West Virginia Programs for First-Time Homebuyers

    To apply for the West Virginia Housing Development Fund Homeownership or Movin’ Up programs, contact participating lenders . You may want to compare fees and offerings to find the best fit.

    To apply for West Virginia Housing Development Fund down payment or closing cost assistance, contact loan origination at 800-933-8511.

    Applicants interested in the Wood County program are to call 304-424-8595.

    For the Charleston Home Blend forgivable loans, email the Mayor’s Office of Economic & Community Development at [email protected] or call 304-348-8035.

    To apply for Martinsburg down payment assistance loans, register for an account.

    One tip: Make sure you only apply for a mortgage for a home you can afford. This home affordability calculator helps you figure out how much home you can afford, based on your income and expenses.

    Federal Programs for First-Time Homebuyers

    Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.

    The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

    Federal Housing Administration (FHA) Loans

    The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers with FICO credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.

    Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.

    FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. You can learn more about FHA loans in general and FHA lending limits by area.

    Freddie Mac Home Possible Mortgages

    Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

    The Home Possible mortgage is for buyers who have a credit score of at least 660.

    Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

    Fannie Mae HomeReady Mortgages

    Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.

    For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .

    Fannie Mae Standard 97 LTV Loan

    The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.

    Department of Veterans Affairs (VA) Loans

    Active-duty members of the military, veterans, and eligible family members may apply for loans backed by the Department of Veterans Affairs. VA loans , to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.

    Regional loan centers are closed to the public, but you can contact the Department of Veterans Affairs for West Virginia:

    VA Regional Loan Center

    210 Franklin Road, SW Roanoke, VA 24011

    Construction & Valuation: [email protected]

    Loan Production: [email protected]

    Native American Veteran Direct Loans (NADLs)

    Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee.

    Regional loan centers are closed to the public, but you can contact the Department of Veterans Affairs for West Virginia at [email protected]

    U.S. Department of Agriculture (USDA) Loans

    No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.

    The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA site . There, you’ll find contact details for local offices in Beckley, Cross Lanes, Ripley, Lewisburg, Martinsburg, McMechen, Romney, and Weston.

    HUD Good Neighbor Next Door Program

    This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.

    West Virginians can reach the regional HUD office at 304-347-7000.

    First-Time Homebuyer Stats for 2022

    •  First-time homebuyers nationwide: 34% of all buyers

    •  Median age of first-time homebuyers in U.S. 33

    •  Median home sales price in West Virginia (May 2022, Redfin): $293,000

    •  3% down payment: $8,790

    •  20% down payment: $58,600

    •  Average credit score in West Virginia: 699

    Financing Tips for First-Time Homebuyers

    In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:

    •  Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past three years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.

    •  Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.

    •  401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

    •  State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.

    •  The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.

    •  Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.

    •  Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.

    The Takeaway

    West Virginia city and state programs can help low- to moderate-income first-time homebuyers get a leg up in the Mountain State. Other first-time buyers may be able to find opportunities among government and conventional loans on their own.

    Make your dream of being a homeowner come true with SoFi’s competitive mortgage rates and down payments as low as 3% for qualifying first-time homebuyers.

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    Should I take first-time homebuyer classes?

    Yes! Good information is key to a successful home-buying experience for anyone, but especially for newcomers, who can easily be overwhelmed by the jargon, technicalities, and magnitude of applying for a mortgage and purchasing a home. First-time homebuyer classes can help. Indeed they are required for many government-sponsored loan programs.

    Do first-time homebuyers with bad credit qualify for homeownership assistance?

    Often they do. Many government and nonprofit homeowner assistance programs are available to people with low credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications.

    Is there a first-time homebuyer tax credit in West Virginia?

    The West Virginia Housing Development Fund does not offer one. Ask your homebuyer education and counseling agency if a mortgage credit certificate is available in your area.

    Is there a first-time veteran homebuyer assistance program in West Virginia?

    A VA-backed loan is an option in the two West Virginia Housing Development loan programs and may require no down payment or can be paired with down payment assistance.

    What credit score do I need for first-time homebuyer assistance in West Virginia?

    The West Virginia Housing Development Fund Homeownership Program generally requires a score of 640 or above. The Charleston assistance requires “acceptable” credit. The upshot: The minimum credit score usually depends on the lender.

    What is the average age of first-time homebuyers?

    The median age of U.S. first-time homebuyers is 33.

    Photo credit: iStock/LawrenceSawyer
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