A First-time Homebuyer Savings Plan allows any Virginian to set aside up to $50,000 toward the costs of closing on a new home. The earnings on those funds — interest and capital gains — are free from Virginia state taxes.
These accounts are simple and easy to set up, because not only can you open a new one, you can also designate almost any existing account as an FHSP. To create an FHSP, you simply include a form when you file your state taxes. (It will indicate that you should not be taxed on any earnings — e.g., interest or capital gains — because of the account’s FHSP status.) After you use the money toward the closing costs on a first home (yours or someone else’s — see below), you send in a different form to the Department of Taxation showing that the funds were put toward an “eligible cost.”
Download the First-time Homebuyer Savings Plan fact sheet:
Read article: Virginia launches investment plan to spur first-time homebuyers
Christine Hodges VARBuzz
Fannie rolls out 3% down payment option for homebuyers
Fannie Mae is rolling out an option for qualified first-time homebuyers that will allow for a down payment as low as 3%.
Building upon Fannie Mae’s successful lower-down payment program offered through stateHousing Finance Agencies, the 97% loan-to-value ratio option will expand access to credit for qualified first-time homebuyers who may not have the resources for a larger down payment.
A recent examination of what’s holding back homebuyers argues that the down payment is the biggest challenge for first timers.
These loans will meet Fannie Mae’s usual eligibility requirements, including underwriting, income documentation and risk management standards. These loans will require private mortgage insurance or other risk sharing, as is required on purchase loans acquired by the company with greater than 80% LTV.
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