Financial Help to Build a House in Virginia (Guide to Grants, Loans & Programs)

Building a house in Virginia can feel like a luxury reserved for people with deep pockets. Between buying land, paying for plans and permits, managing construction costs, and then dealing with a construction-to-permanent loan and closing costs, it’s easy to assume it’s out of reach. The reality in 2025 is much more hopeful: Virginia offers a dense web of state, federal, and local programs that can reduce your down payment, cover closing costs, and even provide true grants that never have to be repaid.

In this guide, we’ll walk through how to get financial help to build a house in Virginia, with in-text links to official and reputable sources so you can click through and verify everything for yourself. We’ll cover:

• Virginia Housing loans and grants
• The statewide HOMEownership Down Payment and Closing Cost Assistance Program
• Federal options like USDA, VA, and FHA One-Time Close construction loans
• Local and county programs in Henrico, Loudoun, Prince William, Chesapeake, and beyond
• How to stack these programs together when you’re building, not just buying a resale home

By the end, you’ll have a clear roadmap for turning “We could never afford to build here” into “We actually have a shot at this.”

How Construction Loans Work in Virginia

Before you even think about grants and down payment assistance, you need to know what you’re financing. Most people who build a house in Virginia use some form of construction-to-permanent loan.

A construction-to-permanent loan (also called a one-time-close loan) is a single loan that:

• Funds the purchase of the land (if you don’t already own it)
• Pays the builder in draws as construction progresses
• Converts into a standard 30-year mortgage once the house is complete

During construction, you typically pay interest only on the funds drawn so far. Once the home is finished and passes inspection, the loan modifies into a regular principal-and-interest mortgage.

For many Virginia buyers, this is done using an FHA One-Time Close construction loan or a similar product. You can see how this works in general on FHA-focused resources like the explanation of the FHA One-Time Close construction-to-permanent program, which allows borrowers to wrap the lot, construction costs, and permanent loan into a single FHA-insured mortgage with as little as 3.5% down if they meet credit and loan-limit guidelines. That 3.5% down is exactly the kind of thing you can often cover using Virginia-specific down payment assistance, which is where the state programs come in.

The key idea: you’re not just getting a regular mortgage; you’re financing a project. That project’s financing can be supported by Virginia Housing, state-level grants, local down payment assistance, and federal loan guarantees that are very friendly to new construction.

Statewide Help: Virginia Housing (Formerly VHDA)

The main housing finance agency in the Commonwealth is Virginia Housing (formerly the Virginia Housing Development Authority, VHDA). This is your starting point if you’re looking for fixed-rate loans, down payment grants, and second mortgages that work across the state.

You can explore the full menu on the official Virginia Housing loans and grants page, which outlines its 30-year fixed-rate mortgages, down payment and closing cost grants, and a Plus Second Mortgage option for extra assistance.

Virginia Housing Home Loans

Virginia Housing works with a network of approved lenders to offer 30-year fixed-rate loans that are designed to be more forgiving than many conventional mortgages. According to the loan overview, some Virginia Housing loans:

• Allow up to 100% financing for qualifying borrowers
• Accept lower credit scores than typical bank conventional loans
• Work with FHA, USDA, VA, and conventional first mortgage products when structured as a Virginia Housing loan

You can see a lender-facing summary of how these loans work on the Atlantic Union Bank Virginia Housing programs page, which notes that Virginia Housing loans can offer up to 100% financing and pair those loans with down payment and closing cost assistance grants for qualified first-time buyers.

For someone building a house, the usual pattern looks like this:

1. You use a construction-to-permanent loan (FHA, USDA, VA, or conventional) that is set up as a Virginia Housing first mortgage.
2. You then add one or more Virginia Housing grants or second mortgages to reduce or eliminate the out-of-pocket down payment and closing costs.

Virginia Housing Down Payment Assistance (DPA) Grant

One of the most powerful tools is the Virginia Housing Down Payment Assistance (DPA) Grant. This is described in detail on the official Down Payment Assistance Grant page.

A few critical points:

• It is a true grant – you do not have to repay it.
• It’s available to qualified first-time or repeat buyers purchasing in designated Areas of Economic Opportunity, as long as they use an eligible Virginia Housing FHA or conventional loan and stay within Virginia Housing’s income and price limits.
• The grant amount is a percentage of the purchase price. A recent overview from Bankrate’s Virginia first-time homebuyer programs guide notes that the standard DPA grant provides up to 2.5% of the home’s purchase price toward the down payment when paired with a Virginia Housing first mortgage.

Because it’s a percentage, this grant scales with your home price. If you’re building a $350,000 home and qualify for the full 2.5%, the grant could provide $8,750 toward your down payment. If your Construction-to-permanent Loan requires a 3% or 3.5% down payment, that grant covers most of it before you put in a single dollar of your own money.

Virginia Housing even offers dedicated information for lenders explaining how the grant works and emphasizing that it never has to be repaid when used correctly, which you can see on their DPA Grant information for lenders page.

Closing Cost Assistance Grant & Plus Second Mortgage

In addition to the DPA grant, Virginia Housing offers:

• A Closing Cost Assistance Grant, used specifically to reduce out-of-pocket expenses for first-time buyers using certain Rural Housing Service (USDA) or VA bond loans. This grant is also a true grant that never has to be repaid, and it’s highlighted on the loans and grants overview.
• A Virginia Housing Plus Second Mortgage, a second-lien loan that can provide even more money for down payment and closing costs when the grant by itself isn’t enough. Details for this product appear under the “Virginia Housing Plus Second Mortgage” section of the same page.

If you’re building in a rural part of Virginia and using a USDA construction-to-permanent loan, the Closing Cost Assistance Grant and DPA Grant can tag-team your cash-to-close, leaving only a modest amount to come from your savings.

Statewide Help: Virginia’s HOMEownership DPA & Pilot Programs

Beyond Virginia Housing, the Commonwealth offers another strong statewide program through the Virginia Department of Housing and Community Development (DHCD). The official DHCD page for the HOMEownership Down Payment and Closing Cost Assistance Program (DPA) lays out two related tools:

HOMEownership Down Payment and Closing Cost Assistance Program

The HOMEownership DPA program is aimed squarely at first-time homebuyers with household incomes at or below 80% of the area median income (AMI). According to DHCD:

• Eligible buyers can receive up to 10% of the sales price in assistance, or up to 15% in certain designated areas.
• The program can also provide up to $2,500 in additional help for closing costs.
• The maximum total assistance is $40,000 per homebuyer.

This assistance is typically structured as a forgivable or deferred second mortgage, allowing very low- to moderate-income Virginians to get into a home with a dramatically reduced upfront cost. The funds can be used with a variety of first-mortgage products, including loans from Virginia Housing and other approved lenders.

Virginia Pilot Down Payment Assistance Program

DHCD also runs the Virginia Pilot Down Payment Assistance Program, which is described in the same DHCD DPA overview and in more detail in the Commonwealth’s 2025 Pilot Program Guidelines PDF.

Under the pilot:

• Assistance is targeted to first-time homebuyers with incomes up to 60% of AMI.
• Qualifying buyers can receive up to $50,000 in down payment and closing cost help.
• The assistance is a deferred loan that is gradually forgiven over time (for example, forgiven 1/15th per year), as long as you stay in the home and meet program requirements.

This pilot is designed to complement, not replace, other down payment assistance programs like Virginia Housing’s DPA grant. That means if your income is low enough, you might stack:

• A Virginia Housing first mortgage
• A Virginia Housing DPA Grant
• A DHCD HOMEownership or Pilot DPA

and cover nearly all of your out-of-pocket down payment and closing costs for a new build.

Federal Construction-Friendly Loans in Virginia

State programs are most powerful when they sit on top of a federal loan designed to make building or buying a home more accessible. In Virginia, the big three are USDA, VA, and FHA.

USDA Rural Development Loans (Guaranteed & Direct)

Much of Virginia is still classified as rural, and that opens the door to USDA Rural Development home loans. There are two main flavors:

1. USDA Single Family Housing Guaranteed Loan Program – described in detail on the official USDA guaranteed loan page. This program:

• Helps low- and moderate-income households in eligible rural areas
• Allows buyers to purchase, build, rehabilitate, improve or relocate a dwelling
• Offers 100% financing, often with no down payment required

1. USDA Single Family Housing Direct Home Loans – for very low- and low-income borrowers, described on the USDA direct VA page for Virginia. These loans can come with payment assistance that reduces the effective interest rate, and they may allow extremely low monthly payments for qualifying households.

For someone building in rural Virginia, a USDA construction-to-permanent loan essentially lets you:

• Finance the land and new build with no down payment (if the appraisal supports it and you meet income and credit requirements).
• Then layer in a Virginia Housing Closing Cost Assistance Grant or a DHCD DPA to cover closing costs or even buy down your rate.

You can see how lenders in Virginia talk about these loans in practice on pages like New American Funding’s Virginia USDA loan guide, which explains that USDA loans can be used not just for existing homes but also for constructing a new home in eligible areas.

VA Home Loans and Construction for Veterans

If you’re a veteran, active-duty servicemember, Guard/Reserve member, or qualifying surviving spouse, the VA home loan program is one of your biggest assets. The official VA home loans portal explains that VA guarantees part of the loan, allowing private lenders to offer:

• No down payment in many cases
• No private mortgage insurance (PMI)
• Competitive, often below-market interest rates

While not every lender offers VA construction loans, the VA itself clarifies in its housing assistance materials that VA loans can be used to buy, build, or improve a home you intend to live in. Once you find a Virginia lender that does VA one-time-close construction loans, you can combine that with state and local assistance:

• Use a VA construction-to-perm loan for the main financing
• Add Virginia Housing Closing Cost Assistance if your VA loan is structured as a Virginia Housing bond loan
• Use local grants or DPA (city or county) for additional closing costs where program rules allow

Because Virginia has a high concentration of military personnel and veterans (especially in Hampton Roads, Northern Virginia, and near Quantico), many lenders and builders in the state are familiar with VA construction loans. That makes it easier to find professionals who know how to navigate the extra steps.

FHA One-Time Close Construction Loans

For buyers who don’t qualify for USDA or VA, an FHA One-Time Close construction-to-permanent loan is often the most accessible path. As outlined on generic resources like the FHA.com One-Time Close explanation and lender guides such as LendingTree’s FHA construction loan overview, this loan:

• Allows down payments as low as 3.5% with credit scores of 580+
• Wraps land, construction costs, and the permanent mortgage into one loan and one closing
• Uses FHA’s more flexible credit and debt-to-income guidelines, which many first-time Virginia builders find crucial

In Virginia, it’s common to:

• Use an FHA One-Time Close as the primary loan
• Structure the permanent mortgage phase as a Virginia Housing FHA loan
• Add the Virginia Housing DPA Grant and possibly the Plus Second Mortgage on top

This structure can cover most or all of that 3.5% down payment and a chunk of closing costs, especially when combined with DHCD’s HOMEownership DPA for eligible incomes.

Local & County Programs That Can Help When You Build

On top of statewide and federal programs, many Virginia localities have their own down payment and closing cost assistance—and these often work with new construction as long as the home is an eligible primary residence.

Henrico County: Down Payment & Closing Cost Assistance

Henrico County (just outside Richmond) operates a First-Time Homebuyers Program that offers financial help with down payment and closing costs. The county’s official description is on the Henrico First-Time Homebuyers – Downpayment and Closing Cost Assistance page.

Key points:

• The program is aimed at low- and moderate-income first-time buyers purchasing a home in Henrico County.
• Assistance is structured as a deferred, forgivable loan—you don’t make monthly payments, and the loan may be forgiven if you stay in the home for a certain period.
• Henrico partners with organizations like Housing Opportunities Made Equal of Virginia (HOME of VA) and Southside Community Development & Housing Corporation to administer the program and provide homebuyer education.

If you’re building a home in Henrico, this assistance can be layered with Virginia Housing and DHCD programs, as long as your lender signs off and program rules are followed.

Prince William County: First-Time Homebuyers Program

In Northern Virginia, Prince William County (including the Cities of Manassas and Manassas Park) offers its own First-Time Homebuyers Program (FTHB). The county’s FTHB program page explains that:

• FTHB provides loans for down payment and closing costs to first-time, low- and moderate-income homebuyers (up to 80% of AMI) who live in or work in the Prince William area.
• The assistance is funded with federal dollars and administered by the Office of Housing and Community Development.
• The program coordinates with Virginia Housing (which the county still refers to by its former VHDA name) to align first mortgages and assistance.

For someone building in Prince William County, this local help could fill the gap between what Virginia Housing and DHCD provide and what your construction lender requires you to bring to closing.

Loudoun County: Multiple Homeownership Loan Programs

Loudoun County, another high-cost Northern Virginia county, has an entire suite of homeownership loan programs described on its Homeownership Loan Programs page. These include:

• Down Payment/Closing Cost Assistance (DPCC) Program
• DPCC Plus Program
• Public Employee Homeownership Grant (PEG)
• SPARC (Sponsoring Partnerships and Revitalizing Communities) program

These programs are designed to help moderate-income first-time homebuyers by providing deferred loans or grants that cover down payment and closing costs. While many Loudoun participants buy existing homes, the key requirement is that the home be an eligible primary residence within the county. That means a newly built house purchased from a builder (or built on an approved lot) can be a good fit, as long as it meets price caps and other criteria.

In a high-price area like Loudoun, stacking Virginia Housing, county DPCC, and possibly employer-based benefits (for example, some school districts and hospitals offer their own home purchase assistance) can be the difference between building and giving up.

Chesapeake & Hampton Roads: Call Chesapeake HOME & Regional Help

In the Hampton Roads region, a good example is the Call Chesapeake HOME Program, described by the Hampton Roads Planning District Commission on its Call Chesapeake HOME page.

That program:

• Provides closing cost and/or down payment assistance to qualified first-time homebuyers
• Can be used to purchase a new or existing home in the City of Chesapeake
• Targets buyers who meet specific income guidelines and complete required homebuyer education

Similar programs exist in other Hampton Roads jurisdictions as well, often funded with federal HOME dollars and administered by local housing departments. Many will allow new construction as long as it’s within price limits and meets habitability standards.

Nonprofit Counseling & Education: HOME of VA and Others

Whether you’re building in Richmond, Northern Virginia, or rural Southwest Virginia, it’s smart to work with a HUD-approved housing counseling agency. One major player statewide is HOME of Virginia (Housing Opportunities Made Equal). On their homeownership help page, HOME notes that they provide:

• One-on-one pre-purchase counseling
• Group homebuyer education classes
• Credit recovery and money management tools

These services are often required to qualify for state and local assistance, but they’re also incredibly valuable on their own. A counselor can help you:

• Map out which Virginia Housing, DHCD, USDA, VA, and local programs you actually qualify for
• Work with your lender to make sure your construction loan is structured to accept these funds
• Prepare you for the long-term budget of owning a newly built home (including utilities, maintenance, and taxes)

Many other nonprofits across Virginia play similar roles, especially in regions like Roanoke, Charlottesville, and the Shenandoah Valley.

Who Qualifies for Help When Building in Virginia?

While each program has its own checklist, they share some common themes you’ll want to understand early.

Income Limits and Purchase Price Caps

Most programs set income limits as a percentage of area median income (AMI). For example:

• Virginia Housing loans and grants have household income limits and sales price/loan limits that vary by region, detailed on the DPA grant and loan pages.
• The HOMEownership DPA Program serves buyers at or below 80% of AMI, with the Pilot DPA aimed at those up to 60% of AMI.
• Local programs in Henrico, Prince William, Loudoun, and Chesapeake often target buyers up to 80% or sometimes 100–120% of AMI, depending on the funding source.

In addition, all of these programs typically cap the maximum home price they’ll support. These caps are there to keep limited funds focused on modestly priced homes rather than luxury builds.

Credit Scores, Debt Ratios, and Homebuyer Education

On the lending side:

• FHA One-Time Close loans usually require a minimum 580 credit score for the 3.5% down payment option.
• USDA and Virginia Housing conventional loans often work best with scores of 620–640+, even if technically the program has no hard minimum.
• VA loans have flexible guidelines but lenders often prefer 620–640 for construction loans.

Almost all assistance programs—Virginia Housing, DHCD, and local DPA—require homebuyer education. If you’re using multiple programs, you may need to take a course approved by THDA, DHCD, or a HUD-approved agency like HOME of VA. The good news is that these classes are usually a one-time thing and can be done online or in-person, and they genuinely help you understand your mortgage and homeownership responsibilities.

Putting It All Together: A Strategy for Building a House in Virginia

With all these pieces on the table, the question is how to combine them intelligently when you want to build, not just buy an existing house.

Here’s a realistic step-by-step strategy:

1. Pick Your Location and Check USDA Eligibility

Start by deciding where in Virginia you want to build:

• If it’s in a rural or small-town area, check the USDA eligibility map from the USDA guaranteed loan page to see if your target area qualifies.
• If you’re building in a more urbanized region like Henrico, Loudoun, Prince William, Chesapeake, or Virginia Beach, focus on Virginia Housing, DHCD DPA, and local county programs.

2. Choose a Core Loan Type (USDA, VA, FHA, or Conventional)

Based on your location and status:

• Use USDA if you’re rural and meet income caps.
• Use VA if you’re a veteran or active-duty servicemember.
• Use FHA One-Time Close if you want a low down payment and more flexible credit.
• Use conventional construction-to-perm if your project exceeds government-loan limits or is more complex.

Then find a Virginia Housing-approved lender who offers the type of construction loan you need and is comfortable integrating Virginia Housing, DHCD, and local DPA into the deal.

3. Stack State and Local Assistance

Work with your lender and a housing counselor to see which of these you can combine:

• Virginia Housing DPA Grant (up to 2.5% of the price)
• Virginia Housing Closing Cost Assistance Grant (for VA/USDA bond loans)
• Virginia Housing Plus Second Mortgage
• DHCD HOMEownership DPA (up to 10–15% + $2,500, max $40,000)
• DHCD Pilot DPA (up to $50,000 for buyers ≤60% of AMI)
• Local programs like Henrico’s DPA, Prince William’s FTHB, Loudoun’s DPCC/PEG/SPARC, or Chesapeake’s HOME

In practice, borrowers often cover most or all of their required down payment and closing costs this way, especially when starting with USDA or VA (which already allow 0% down).

4. Choose a Builder Who Understands These Loans

Not every builder is comfortable with USDA, VA, or FHA construction loans. When you interview builders, ask directly:

• “Have you worked on projects with USDA or VA construction-to-perm loans before?”
• “Are you familiar with Virginia Housing or buyers using down payment assistance?”

A builder with this experience will already know how to handle draw schedules, inspections, and lender conditions, which reduces stress and delays.

5. Lock in Your Plan Before Breaking Ground

Finally, make sure that:

• Your construction-to-permanent loan is fully approved, including details on your grants and second mortgages.
• All DPA and grant approvals are in place and documented in your loan file.
• You’ve completed any required homebuyer education and counseling.

Once everything is locked in, you can start construction knowing that you have a complete financing stack backing you up—rather than hoping it will come together later.

Final Thoughts

Building a house in Virginia in 2025 is not easy. Land is competitive in many regions, materials and labor are expensive, and construction loans are more complex than a simple purchase mortgage. But Virginia also offers an unusually strong safety net of programs that make building a home financially possible for many more people than you might expect.

If you combine:

• A construction-friendly primary loan (USDA, VA, FHA, or conventional)
• A Virginia Housing first mortgage and DPA Grant
• State-level tools like the HOMEownership Down Payment and Closing Cost Assistance Program or the Virginia Pilot DPA
• Local county help in places like Henrico, Prince William, Loudoun, Chesapeake, and others
• Guidance from HUD-approved housing counselors such as those at HOME of VA

you can significantly reduce how much money you need to bring to the table and how much you pay over the life of the loan.

The smartest next step is to pick your target area in Virginia, visit the official sites listed in this guide—starting with Virginia Housing’s homebuyer page and DHCD’s DPA program page—and then schedule a conversation with a Virginia Housing-approved lender and a housing counselor. Once you see, in real numbers, how the grants, second mortgages, and federal loans stack up, the idea of building your own house in Virginia shifts from fantasy to a concrete plan you can actually execute.