Which Mortgage Type Fits First-Time Buyers in Henrico County, VA

Buying your first home in Henrico County — whether you’re eyeing a townhome near Short Pump Town Center, a starter ranch in Tuckahoe, or a newer build in Twin Hickory — is one of the most significant financial decisions you will make. The mortgage type you choose shapes your monthly payment, your upfront costs, and how much flexibility you carry into the future.

Yet many first-time buyers in Glen Allen and Lakeside arrive at the closing table having compared only the rate they were quoted, not the loan structure underneath it. That is a costly blind spot.

A mortgage broker — not a single-shelf direct lender — can present multiple loan types side by side across wholesale lenders, so you see the full picture before you commit. Duane Buziak (NMLS #1110647) of Coast2Coast Mortgage (NMLS #376205) has served Henrico County homebuyers since 2014, doing exactly that.

This guide walks through the primary mortgage types available to first-time buyers, what each one requires, where each one fits, and how to match your financial profile to the right structure — so you are not simply picking the loan a single lender happens to offer that day.

Written by Duane Buziak, NMLS #1110647 | Coast2Coast Mortgage LLC NMLS #376205

1. FHA Loans: The Low-Down-Payment Workhorse

The Challenge It Solves

Many first-time buyers in Lakeside and Tuckahoe have solid income and stable employment but have not had the years needed to build a large savings reserve or a pristine credit history. Conventional financing at 20% down on a $350,000 home means coming to the table with $70,000 in cash — an unrealistic bar for most first-time buyers. FHA loans exist precisely to close that gap.

The Strategy Explained

An FHA loan, backed by the Federal Housing Administration (HUD), requires as little as 3.5% down with a credit score of 580 or higher. Buyers with scores between 500 and 579 may still qualify with 10% down. Gift funds from family members are permitted for the entire down payment, which is a meaningful advantage for buyers whose savings are still building.

The trade-off is mortgage insurance. FHA charges an upfront mortgage insurance premium (MIP) of 1.75% of the loan amount, plus an annual MIP that currently runs between 0.55% and 0.85% depending on your loan term and down payment. That annual MIP does not automatically cancel the way private mortgage insurance does on a conventional loan — it stays for the life of the loan if you put less than 10% down.

Worked Dollar Example: $350,000 Purchase, FHA

1. Purchase price: $350,000

2. Down payment at 3.5%: $12,250

3. Base loan amount: $337,750

4. Upfront MIP at 1.75%: $5,911 (typically rolled into the loan)

5. Financed loan amount: $343,661

6. Annual MIP at 0.55% on a 30-year term: approximately $158/month added to principal and interest

At a hypothetical rate, your principal and interest payment on the financed amount would be calculated on $343,661. The MIP adds roughly $158 per month on top of that. Budget accordingly when comparing this structure to conventional alternatives.

Pro Tips

FHA loans carry a 2026 conforming loan limit baseline of $806,500 for single-family homes, as published by the FHFA, so Henrico County price ranges are well within reach. Ask your broker to run a side-by-side showing FHA MIP cost over a 7-year horizon versus conventional PMI — the comparison often surprises buyers who assumed FHA was automatically cheaper.

2. Conventional 97 and 3% Down Conventional Loans

The Challenge It Solves

First-time buyers often assume they need 20% down for a conventional loan, or that conventional financing is simply out of reach if they cannot hit that threshold. Fannie Mae and Freddie Mac have both introduced 3%-down conventional options that challenge that assumption — and for buyers with credit scores of 620 or higher, these programs can produce a lower long-term cost than FHA despite a similar entry point.

The Strategy Explained

Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs both allow 3% down for first-time buyers, with income limits that apply in higher-income census tracts. Fannie Mae also offers a standard Conventional 97 option without income limits for first-time buyers. The critical long-term advantage over FHA: conventional PMI cancels automatically when your loan-to-value ratio reaches 80%, and you can request cancellation at 80% LTV based on current value. FHA MIP on loans with less than 10% down stays for the life of the loan.

For a buyer in Wyndham or the River Road corridor planning to build equity and refinance or sell within 7 to 10 years, the PMI cancellation mechanics of a conventional loan can represent meaningful savings over the full holding period.

7-Year Cost Comparison: FHA vs. Conventional 97 on $350,000

1. FHA MIP at $158/month over 84 months: approximately $13,272 in mortgage insurance paid

2. Conventional PMI at an estimated $100–$140/month (varies by credit score and lender) cancels once equity reaches 20% — for many Henrico buyers, that occurs well before the 7-year mark given local appreciation trends

3. The difference in total mortgage insurance paid over 7 years can range from $3,000 to $7,000 in favor of conventional — a figure worth modeling before you choose

Pro Tips

HomeReady and Home Possible both offer reduced PMI rates for buyers who meet income limits, which narrows the gap further. A broker with access to multiple wholesale lenders can price PMI across several carriers — something a single-shelf direct lender cannot do. Credit score matters significantly here: the higher your score above 700, the more aggressively PMI is priced in your favor.

3. VA Loans: The Zero-Down Option for Eligible Veterans

The Challenge It Solves

Henrico County has a meaningful veteran and active-duty population, particularly given proximity to Defense Supply Center Richmond. For eligible veterans, service members, and surviving spouses, the VA loan program offers a structure that no other loan type matches: zero down payment, no monthly mortgage insurance, and competitive wholesale pricing. If you qualify, this is a conversation that should happen before any other loan type is discussed.

The Strategy Explained

VA loans are guaranteed by the U.S. Department of Veterans Affairs and available to borrowers who meet service requirements. The zero-down structure means a veteran purchasing a $375,000 home in Glen Allen or near Deep Run Park does not need to bring a down payment to closing. There is no monthly PMI at any loan-to-value ratio — a structural advantage that saves hundreds of dollars per month compared to FHA or low-down conventional loans.

VA loans do carry a funding fee, which varies based on down payment and whether it is a first or subsequent use. For a first-time VA loan user with zero down, the funding fee is 2.15% of the loan amount and is typically rolled into the loan. Certain veterans with service-connected disabilities are exempt from the funding fee entirely.

On a VA cash-out refinance, eligible veterans can access up to 100% LTV — a distinction specific to VA financing that does not apply to conventional cash-out refinancing, which is capped at 90% LTV.

Worked Dollar Example: $375,000 Purchase, VA Zero Down

1. Purchase price: $375,000

2. Down payment: $0

3. Base loan amount: $375,000

4. VA funding fee at 2.15% (first use, zero down): $8,063 rolled into loan

5. Financed loan amount: $383,063

6. Monthly PMI: $0

Compare that to an FHA loan on the same purchase: $375,000 with 3.5% down ($13,125), financed amount of approximately $368,444 after upfront MIP, plus $169/month in annual MIP. The VA borrower pays no monthly insurance and brings nothing to closing beyond closing costs.

Pro Tips

VA loans have no conforming loan limit for eligible veterans who have full entitlement — meaning a veteran purchasing in Short Pump or Innsbrook at higher price points is not capped at the standard FHFA baseline. Confirm your Certificate of Eligibility early in the process. A broker can pull this on your behalf without a hard credit inquiry.

4. USDA Rural Development Loans: Zero Down Beyond the Suburbs

The Challenge It Solves

Not every Henrico County first-time buyer is purchasing inside the densest suburban corridors. Buyers looking at properties near the Henrico/Goochland border or the Henrico/New Kent boundary may find themselves in USDA-eligible geography — which opens a zero-down loan option that many buyers overlook entirely because they assume “rural” means remote farmland. It does not.

The Strategy Explained

USDA Rural Development loans, administered through the U.S. Department of Agriculture, offer 100% financing with no down payment for properties in eligible geographic areas and borrowers who meet household income limits. Eligibility is determined by census-tract designation, not by whether the property feels rural. The USDA eligibility map is the authoritative source — and it is worth checking before you assume a property does not qualify.

USDA loans carry a guarantee fee structure that differs from FHA MIP. The upfront guarantee fee is 1% of the loan amount (lower than FHA’s 1.75% upfront MIP), and the annual fee is 0.35% — meaningfully lower than FHA’s annual MIP range of 0.55% to 0.85%. For buyers who qualify on both geography and income, USDA often produces a lower monthly payment than FHA on the same purchase price.

Implementation Steps

1. Verify the property address on the USDA eligibility map before scheduling a showing — eligibility boundaries can run through specific streets and subdivisions

2. Confirm your household income against USDA limits for Henrico County, which are based on area median income and household size

3. Ask your broker to run a side-by-side of USDA vs. FHA on the same purchase price, showing monthly payment, upfront cost, and 5-year total cost

Pro Tips

USDA income limits apply to total household income, not just the borrowing borrowers on the loan. If other adults live in the home, their income may count toward the limit even if they are not on the mortgage. Verify this early. A broker with wholesale lender access can identify USDA-approved lenders and run this scenario alongside FHA and conventional options simultaneously.

5. Virginia Down Payment Assistance: Layering Grants onto Your Loan Type

The Challenge It Solves

For many first-time buyers in Lakeside, Tuckahoe, and the Twin Hickory area, the down payment is the single largest obstacle — not the monthly payment. Virginia Housing (formerly VHDA) offers down payment assistance programs that can reduce or eliminate the out-of-pocket down payment requirement when layered on top of an eligible loan type. Understanding how these programs interact with your chosen mortgage structure can reshape the entire affordability calculation.

The Strategy Explained

Virginia Housing administers several first-time buyer programs that pair down payment assistance with FHA, conventional, and VA loans. DPA is structured as a second loan or grant depending on the specific program, and it can cover the down payment, closing costs, or both — creating what amounts to no-out-of-pocket closing options for qualifying buyers.

Henrico County buyers must meet income limits and purchase price limits set by Virginia Housing, which are updated periodically. In recent program cycles, purchase price limits for Henrico have been competitive with the local market, though buyers at the higher end of Short Pump and Innsbrook pricing may exceed the limits. A broker with access to multiple wholesale lenders can identify which DPA programs are available through which lenders — because not every lender participates in every program, and a single-shelf direct lender can only offer the DPA options it has chosen to carry.

Implementation Steps

1. Confirm your household income against current Virginia Housing limits for Henrico County — limits vary by household size and are published on the Virginia Housing website

2. Identify which loan type your credit profile and property type support (FHA, conventional, or VA) — DPA availability varies by underlying loan type

3. Ask your broker to cross-reference available DPA programs across their wholesale lender network, not just the programs a single lender participates in

Pro Tips

DPA programs are not double-stacking grants — each program has specific structure and terms. Some are forgivable over time; others are repayable at sale or refinance. Understand the repayment terms before committing. The right combination of loan type and DPA program is a matching exercise that benefits from broker access to multiple lenders, not a single product shelf.

6. Fixed-Rate vs. Adjustable-Rate: The Structure Underneath Every Loan Type

The Challenge It Solves

Most first-time buyers default to a 30-year fixed-rate mortgage without evaluating whether that structure actually fits their situation. The rate type is a separate decision layer that sits on top of your loan type selection — and for buyers in Short Pump or Innsbrook who are purchasing a starter home with a clear plan to upsize within five to seven years, an adjustable-rate structure can produce meaningful payment savings during the period they actually plan to hold the loan.

The Strategy Explained

A 30-year fixed-rate mortgage offers payment certainty for the full loan term — the rate you lock is the rate you pay through year 30. For buyers who plan to stay long-term, particularly those putting down roots near Dorey Park or in established Tuckahoe neighborhoods, fixed-rate provides the stability that makes long-term budgeting straightforward.

A 15-year fixed-rate mortgage carries a lower rate than a 30-year fixed but produces a higher monthly payment — the trade-off is substantially less interest paid over the loan life. This structure fits buyers with strong income who want to accelerate equity build.

A 5/1 or 7/1 ARM carries a fixed rate for the initial period (5 or 7 years), then adjusts annually based on an index. The initial rate on an ARM is typically lower than a 30-year fixed. For a buyer in Wyndham or the Twin Hickory area who is purchasing a townhome as a 5-to-7-year stepping stone before upsizing, the ARM’s lower initial rate may produce real savings over the actual holding period — as long as the rate adjustment risk is understood and the buyer has a clear plan.

Implementation Steps

1. Define your realistic holding period — how long do you actually plan to own this specific property before selling or refinancing?

2. Ask your broker to model the total interest paid under a 30-year fixed versus a 7/1 ARM over your stated holding period, not over 30 years

3. Evaluate the rate cap structure on any ARM — understand the maximum rate you could face at first adjustment and in subsequent years

Pro Tips

ARM math only makes sense when the initial rate savings are material and the holding period is shorter than the fixed window. If you are uncertain about how long you will stay, the certainty of a fixed rate is worth the premium. A broker can price both structures across multiple wholesale lenders simultaneously, so you see real rate differentials rather than a single lender’s product.

7. How a Henrico Mortgage Broker Finds the Right Fit Across All These Options

The Challenge It Solves

Every loan type described in this guide has a different fit profile — and no single lender carries all of them competitively. A direct lender or bank operates from a single product shelf: the loans they have chosen to offer, priced at retail margins. A mortgage broker accesses wholesale pricing across many lenders, which means the same borrower profile can be matched to the loan type and lender combination that actually fits — not the one the lender happens to push that week.

The Strategy Explained

Duane Buziak is a licensed mortgage broker serving Henrico County, VA, and surrounding areas. As a broker, Duane accesses wholesale lenders to find loan structures that fit the buyer’s actual profile — FHA, conventional, VA, USDA, and DPA-layered options — rather than presenting a single product. For first-time buyers in Glen Allen, Lakeside, Short Pump, and across Henrico County, that access matters when the difference between loan types can be hundreds of dollars per month.

The NoTouch Credit Pull pre-qualification process allows buyers to understand their options without a hard credit inquiry affecting their score. The Dare to Compare rate challenge invites buyers who have already received a quote elsewhere to bring it in for a wholesale-priced comparison.

Broker vs. Single-Shelf Lender: Feature Comparison

Implementation Steps

1. Start with a no-credit-impact pre-qualification to understand which loan types your credit profile, income, and savings support

2. Request a side-by-side comparison of every loan type you qualify for — FHA, conventional, VA if eligible, USDA if geographically eligible — showing monthly payment, upfront cost, and 7-year total cost for each

3. Layer DPA program options onto the scenarios where you qualify, and compare the net out-of-pocket and monthly payment with and without assistance

Pro Tips

Bring any rate or loan estimate you have received from another source. The Dare to Compare process runs a wholesale-priced scenario against what you were quoted, so you can see whether you are looking at retail or wholesale pricing. There is no obligation and no credit impact to make that comparison.

8-Question FAQ: Mortgage Types for Henrico County First-Time Buyers

1. What credit score do I need to qualify for an FHA loan in Henrico County?

A minimum credit score of 580 qualifies you for FHA financing with 3.5% down. Scores between 500 and 579 may still qualify with 10% down, per HUD guidelines. Scores below 500 do not meet FHA minimum requirements.

2. Is a VA loan available for purchasing a home in Glen Allen or Short Pump?

Yes. VA loans are available for eligible veterans, active-duty service members, and surviving spouses purchasing in any Henrico County location, including Glen Allen, Short Pump, and Innsbrook. There is no geographic restriction within the county, and eligible veterans with full entitlement face no loan limit cap.

3. Can I use USDA financing to buy a home in Henrico County?

USDA eligibility depends on the specific property address, not the county as a whole. Properties near the Henrico/Goochland and Henrico/New Kent borders may fall within USDA-eligible census tracts. Verify the specific address on the USDA eligibility map before assuming qualification or disqualification.

4. How does conventional PMI compare to FHA MIP for first-time buyers?

Conventional PMI cancels automatically when your loan-to-value ratio reaches 80%, and you can request cancellation based on current appraised value. FHA MIP on loans with less than 10% down stays for the life of the loan. For buyers planning to hold their home beyond 7 to 10 years, conventional PMI cancellation can represent significant long-term savings.

5. What is the Virginia Housing down payment assistance program and who qualifies?

Virginia Housing offers down payment assistance programs that layer onto FHA, conventional, and VA loans for eligible first-time buyers. Qualification is based on household income limits, purchase price limits, and credit requirements — all published at virginiahousing.com. Henrico County buyers should verify current income and purchase price limits, as they are updated periodically.

6. Should I choose a 30-year fixed or an ARM as a first-time buyer in Henrico County?

A 30-year fixed provides payment certainty and suits buyers planning to stay long-term. An ARM’s lower initial rate can produce real savings for buyers with a defined 5-to-7-year holding plan — for example, purchasing a townhome near Twin Hickory with a clear intent to upsize before the fixed period expires. Model both scenarios against your actual holding period before deciding.

7. What is the difference between a mortgage broker and a direct lender for first-time buyers?

A mortgage broker accesses wholesale pricing across many lenders and can present multiple loan types side by side. A direct lender offers only the products on its own shelf at retail pricing. For first-time buyers comparing FHA, conventional, VA, USDA, and DPA-layered options, broker access to wholesale lenders means more scenarios modeled and more competitive pricing on the same loan type.

8. Can I get pre-qualified without a hard credit inquiry affecting my score?

Yes. Duane Buziak’s NoTouch Credit Pull pre-qualification process allows Henrico County buyers to understand which loan types and price ranges they qualify for without a hard inquiry impacting their credit score. This is particularly important if you are actively comparison shopping across multiple lenders, as multiple hard pulls in a short window can affect your score.

Your Implementation Roadmap

For first-time buyers in Henrico County — from Lakeside to Short Pump, Tuckahoe to Twin Hickory — the right mortgage type is not a universal answer. It is a function of your credit score, your savings, your military eligibility, how long you plan to stay, and which programs are available through lenders willing to compete for your loan.

FHA fits many buyers with lower credit scores or limited savings. Conventional 97 often wins on long-term cost for buyers who qualify. VA is the strongest option for eligible veterans. USDA opens zero-down options for buyers in eligible geography near the Goochland and New Kent borders. And Virginia Housing down payment assistance can reshape the math on any of these — creating no-out-of-pocket closing options for buyers who meet the income and purchase price limits.

The problem with choosing a mortgage type before you have compared options across multiple lenders is that you are making a decision with incomplete data. A broker with access to wholesale pricing can run all of these scenarios simultaneously, without a hard credit inquiry, so you see the real comparison before you commit.

Duane Buziak (NMLS #1110647) at Coast2Coast Mortgage (NMLS #376205) has been doing exactly that for Henrico County homebuyers since 2014. Call 804-212-8663 or get pre-qualified today to see which mortgage type actually fits your situation — with no impact to your credit score and no obligation to proceed.