The DMV Financing Guide
The loan is part of the offer. The program you choose sets how much you can borrow, what you pay each month, how much cash you need at the table — and how strong your offer looks to a seller. This guide covers the loan types we see every week, how discount points really work, how to shape an offer to the market in front of you, and the assistance programs that can put real money toward your purchase in Northern Virginia, Washington DC and Southern Maryland.
Loan types, side by side
Every program trades cost for flexibility. Here is how the main options compare — exact terms vary by lender, credit profile and property.
Loan limits in our market
Loans at or under the county limit are "conforming" (Fannie Mae / Freddie Mac); above it you're in jumbo territory. FHA uses its own limits. With full entitlement, VA has no loan limit at all. 2026 one-unit limits:
FHA annual MIP on a 30-year loan with under 5% down is 0.55% up to a $726,200 base loan and 0.75% above it. VA funding fee (purchase): 2.15% first use / 3.3% subsequent with under 5% down; 1.5% with 5%+; 1.25% with 10%+.
How lenders size your loan
Debt-to-income (DTI). Your total monthly debts, including the new house payment, divided by gross monthly income. Conventional loans commonly approve up to 45–50%, FHA to about 43% standard (higher with automated approval), VA uses 41% as a guideline alongside residual income.
Loan-to-value (LTV). The loan divided by the price or appraised value, whichever is lower. Below 80% LTV, conventional loans drop PMI entirely.
Reserves. Months of payments left in the bank after closing. Jumbo, investment and multi-unit loans usually require them.
Asset-based loans. Hard money, construction and DSCR loans lean on the property: loan-to-cost, loan-to-ARV, as-completed value, and rent coverage.
Run your own numbers in the Maximum Mortgage and Affordability calculators at banksgroupdmv.com/calculators.html.
Discount points, demystified
A discount point is prepaid interest: 1 point = 1% of the loan amount, paid at closing in exchange for a lower rate for the life of the loan. Lenders price points daily, and the rate drop per point varies — roughly 0.125%–0.25% per point is a common range, but only your Loan Estimate is binding.
Example: on a $500,000 loan, one point costs $5,000. If it drops the rate from 6.75% to 6.50%, the payment falls about $82/month — a break-even of roughly 60 months. Stay longer than that and the points pay you back; sell or refinance sooner and they cost you.
When points make sense — and when they don't
Buy points when you expect to keep the loan well past the break-even, you have cash beyond your down payment and reserves, or the seller is paying for them.
Skip points when you may move or refinance within a few years, the cash would otherwise lower your PMI or strengthen your down payment, or rates are expected to fall.
Consider the opposite — lender credits. Accepting a slightly higher rate in exchange for a credit toward closing costs is "negative points." Useful when cash is tight and the hold is short.
Points vs. price. Points paid can be tax-deductible on a primary residence purchase in many cases — confirm with your CPA.
Getting the seller to pay
Seller concessions can fund points, a temporary buydown or closing costs. Each program caps them:
A temporary buydown lowers the first two years' payments; the seller's credit funds the difference in escrow. Points lower the rate for good. If you expect to refinance within a couple of years, a buydown often gets more from the same credit — you still qualify at the full note rate.
Model points in the Affordability calculator — it shows the rate after points, the monthly savings, the break-even and how much buying power they add.
Adjusting your offer to the market
There is no single "right" offer. The same house calls for a different strategy in March than in November, and in Arlington than in St. Mary's. Before we write, we read four signals for the specific neighborhood and price point:
Days on market. Under two weeks is a competitive market; past 30 days, the seller's leverage is eroding.
Sale-to-list ratio. Recent sales closing over 100% of list tell you escalation is normal; under 98% means room to negotiate.
Months of inventory. Under 2 months favors sellers; 4–6 months is balanced; more favors buyers.
Price reductions & back-on-market. A cut or a failed contract is information — and leverage.
Illustrative, on a $600,000 purchase with 5% down at 6.75%: a price cut lowers the loan a little; the same dollars spent on about 1.75 points lower the rate on the whole loan. In a softer market, asking for a credit toward a buydown or points often saves you more each month — and sellers may find it easier to say yes to than a lower sale price.
In a hot market, the strongest offers win on certainty — a solid pre-approval, a lender the listing agent can reach, clean contingencies and a settlement date that suits the seller. In a slower market, time is on your side: let days on market work, and ask for terms that lower your payment.
Assistance & subsidy programs
Down payment and closing cost help in our three markets is real money — in some cases tens of thousands of dollars — but every program has income limits, price caps, approved-lender lists and funding that can open and close mid-year. Treat this as a map, and let us connect you with a participating lender before you count on any of it.
Northern Virginia
2% of the price (conventional) or 2.5% (FHA) toward the down payment — not repaid. Paired with a Virginia Housing first mortgage. First-time buyers, or repeat buyers in targeted areas; income and price limits apply, and you contribute 1% (can be a gift).
A 30-year fixed second mortgage for up to 5% of the price, depending on loan type and credit score. First-time or repeat buyers; income limits apply. Can't be combined with the grant.
A rate reduction (typically 1%) for buyers up to 120% of area median income, allocated through local partners and requiring homebuyer education. Funding is periodic — check current availability.
Up to $50,000 for first-time buyers at or below 80% of area median income, through a Virginia Housing-approved lender, while funds last.
The lesser of 25% of the price or $112,500, for first-time buyers; purchase price cap $500,000 and income limits by household size.
Deferred 0% assistance of up to $50,000, scaled by income tier, for first-time buyers up to 100% of area median income.
The lesser of 10% of the price or $70,000 at 0%, forgiven over 15 years, for households at roughly 30–70% of area median income.
Down payment help scaled to income (larger for households at or below 60% of area median income) plus closing cost help, as a deferred second loan forgiven after 30 years of occupancy. Opens in application windows.
Washington, DC
Up to $202,000 in gap financing plus up to $4,000 toward closing costs for first-time DC buyers, scaled by household income and size. Repayment is deferred for lower-income tiers. Funding runs first-come, first-served and has paused mid-year before.
3% (conventional) or 3.5% (FHA) of the loan amount, no monthly payment, due at sale, refinance or payoff. Not limited to first-time buyers; income limits apply.
EAHP pairs a deferred loan with matching funds for first-time buyers in DC government, with added help for first responders. NEAHP offers unionized DC employees a grant of roughly $3,000–$26,500 based on years of service.
A reduced 0.725% recordation tax for qualifying first-time buyers who will live in the home, subject to a price cap and household income limits.
Southern Maryland & Prince George's
The state's first-time buyer loan, with down payment assistance as a flat $6,000 or 3%, 4% or 5% of the first mortgage — deferred at 0% and repaid at sale, refinance or payoff.
The state matches an employer, builder or nonprofit contribution dollar-for-dollar up to $2,500.
Pays off student debt up to the lesser of 15% of the price or $25,000 at closing, forgiven over five years. Conventional loans only.
Up to $50,000 at 0%, forgiven after 10 years, for first-time buyers at or below 80% of area median income; price caps apply.
Charles County's Settlement Expense Loan Program helps with closing costs; Charles and Calvert offer House Keys 4 Employees for county staff; St. Mary's County's Housing Authority offers purchase assistance. Amounts and funding vary year to year.
First-time buyers who will occupy the home are exempt from the buyer's share of the state transfer tax. Some counties offer additional recordation or transfer tax relief.
Federal programs that work everywhere
USDA Rural Development. 0% down in eligible areas — much of St. Mary's, parts of Charles and Calvert, and some outer Loudoun and Prince William addresses — with household income limits.
Fannie Mae HomeReady / Freddie Mac Home Possible. 3% down with reduced mortgage insurance for buyers at or below 80% of area median income; a $2,500 credit is available for very-low-income buyers.
VA and FHA. 0% and 3.5% down respectively, and both can be layered with many of the state and local programs above.
Program details verified from public sources as of September 2026 and summarized for education. Amounts, income limits and funding change frequently — confirm with the administering agency or a participating lender.
We match the loan to the offer, not the other way around. Before you tour, we'll run your numbers across programs, flag every assistance dollar you may qualify for, and introduce you to lenders who actually close those programs in DC, Maryland and Virginia. When it's time to write, we read the market for that house — and decide together whether to win on price, on terms, or on a credit that lowers your payment for years.
Malik Banks · 202.669.9634 · Malik@banksgroupdmv.com
Malik Banks, REALTOR® · The Banks Group · Brokered by Quasar Real Estate, 502 Calvin Lane, Rockville, MD 20851, (301) 279-0494 · Licensed in VA, DC & MD · Equal Housing Opportunity. Educational material — not a loan offer or commitment to lend, and not lending, legal, tax or investment advice. Loan terms, limits and program availability change frequently; confirm with a licensed loan officer.