Virginia Housing Plus Second Mortgage and Income Limits 2026

The Virginia Housing DPA Grant gets most of the press, but buyers who miss the grant — by a few thousand dollars of income, or because they want 100% financing instead — have a second tool that's often more flexible: the Plus Second Mortgage. Here's how it works, what the 2026 income limits actually are, and when it makes more sense than the grant.

What the Plus Second Mortgage Is

The Virginia Housing Plus Second Mortgage is a 30-year fixed-rate second loan designed specifically to cover your down payment. Paired with a Virginia Housing first mortgage, it creates a pathway to 100% financing — meaning you can purchase without any down payment coming out of your own pocket.

It comes in two flavors:

• FHA Plus: Pairs a standard FHA first mortgage with a Plus Second Mortgage covering the 3.5% FHA down payment requirement
• Conventional Plus: Pairs a Conventional first mortgage with a Plus Second Mortgage

Unlike the DPA Grant, the Plus Second Mortgage is a loan — it requires repayment over 30 years alongside your first mortgage. But the interest rate is competitive, and for buyers who have qualifying incomes but limited savings, it eliminates the down payment barrier entirely.

Credit Score Determines How Much You Can Borrow

This is the detail most buyers miss. The second mortgage amount isn't fixed — it depends on your credit score:

The difference matters. At 680+, the 5% second mortgage covers not just the FHA down payment (3.5%) but an additional 1.5% toward closing costs. On a $350,000 home, that's $17,500 from the second mortgage versus $12,250 at the lower tier — an additional $5,250 that can go toward reducing your cash-to-close.

If your credit score is sitting at 672, it's worth talking to a lender about whether a brief credit-building period to reach 680 changes your position meaningfully.

2026 Virginia Housing Income Limits

Income limits for Virginia Housing programs are set by Metropolitan Statistical Area (MSA), not by individual county. A buyer in Loudoun County uses the Washington/Arlington/Alexandria MSA limits, while a buyer in Fredericksburg uses different limits. Verifying your specific MSA before planning your finances is critical.

Plus Second Mortgage income limits operate at a higher threshold than the DPA Grant, which is intentional — Virginia Housing designed the second mortgage for buyers who have stable incomes but insufficient savings, not just lower-income households.

For 2026, representative income limits include:

• Washington/Arlington/Alexandria MSA: Income limits are set substantially higher than most other MSAs, reflecting the region's elevated cost of living. Consult Virginia Housing's current table for exact figures, as they adjust annually.
• Richmond MSA: Income limits for the Plus program generally exceed the DPA Grant limits by a meaningful margin — important for Richmond-area buyers with dual incomes who assume they've aged out of state assistance.
• Hampton Roads: Similar structure, with limits reflecting the military-heavy, middle-income buyer profile that dominates this market.

The Plus Second Mortgage is also unique in that it's available to both first-time buyers and repeat buyers — unlike the DPA Grant, which is restricted to first-time purchasers (or buyers in designated Areas of Economic Opportunity). This matters for step-up buyers who previously owned but don't have a large equity cushion from their prior home.

DPA Grant vs. Plus Second Mortgage: Which Is Right for You?

The DPA Grant is a better outcome for most buyers — free money beats a loan. But the Plus Second Mortgage has distinct advantages in specific situations:

Choose the DPA Grant if:

• You meet the income limits (which are lower than the Plus limits)
• You only need partial down payment coverage
• You want the simplest possible structure at closing

Choose the Plus Second Mortgage if:

• Your income is above the DPA Grant threshold but you still have limited savings
• You want true 100% financing (grant doesn't guarantee 100% — you still need 1% from your own funds)
• You're a repeat buyer who previously owned but doesn't qualify for the grant
• You have a 680+ credit score and want to capture the extra 1.5% toward closing costs

Consider stacking both — Virginia Housing permits layering the Plus Second Mortgage with local municipal assistance programs (NOT simultaneously with the DPA Grant — it's one or the other from Virginia Housing, then local programs on top). A buyer in Norfolk, for example, could use FHA Plus for the down payment and then layer the Homeward Norfolk grant (up to $40,000) on top to address closing costs and reduce monthly obligations.

The Lender Requirement

Every Virginia Housing program, including the Plus Second Mortgage, requires using a Virginia Housing-approved lender. This is non-negotiable. Your bank of 15 years, your credit union, or the national lender with the TV ad may not be on the approved list.

Get the current approved lender list from Virginia Housing's website before you start loan shopping. Working with an unapproved lender and switching lenders late in a transaction burns time, delays closing, and creates underwriting complications.

How the Second Mortgage Affects Your DTI

The Plus Second Mortgage adds a second monthly payment to your debt obligations. When lenders calculate your debt-to-income ratio, they include the payment on both the first and second mortgage. Buyers who are already close to DTI limits need to model this carefully before assuming the Plus program solves their affordability problem. At 100% financing on a $400,000 home, the combined principal and interest across both loans can push monthly obligations to a level that exceeds maximum DTI thresholds — particularly for buyers who carry student loans, car payments, or credit card balances.

An approved Virginia Housing lender should run these numbers before you fall in love with a specific price point.

For the full picture of Virginia's closing costs, transfer taxes, contract nuances, and inspection requirements, the Virginia First-Time Home Buyer Guide covers the complete process from pre-approval through settlement.

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