Workforce Housing for Home Buyers

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​The Workforce Housing Program is designed to improve affordable housing opportunities so that vital members of our workforce are able to live and work in Virginia Beach.

Through the program, buyers at targeted incomes are given a chance to become homeowners when they would have otherwise been priced out of the market by enhancing the affordability of the housing unit by up to 25%. Program participants' mortgage interest is tax deductible and they experience increased wealth in the form of equity.

 How to Apply

​The application process is now open. To qualify to have your name/household placed on the Workforce Housing Waiting List, you must complete the "Application to Determine Program Eligibility" and applicable forms (listed below), and return them to Housing & Neighborhood Preservation, 2424 Courthouse Drive, Bldg. 18A, Virginia Beach, VA 23456

Please read the information and instructions before completing an application.

Please be aware that being eligible for the for-sale portion of the program does not guarantee a household the opportunity to purchase a workforce housing unit given that the demand for these units may likely exceed the available supply.

Workforce Housing Program Application Checklist
Must be printed on 8.5"x14" paper

Application to Determine Program Eligibility for Waiting List
Must be printed on 8.5"x14" paper

Application Package for Buyers

Required Certification, Authorization and Verification Forms

 Eligibility

​In order to be deemed an eligible buyer of a workforce housing unit, a household must meet all of the following criteria at the time of application and through the time of settlement:

  • Must live or work full-time in Virginia Beach, or have a bona fide offer of full-time employment in Virginia Beach within 3 months of the time of application;
  • Cannot own, or have a controlling interest in, other real estate property;
  • Household’s annual gross income must be between 80% and 120% of area median income (AMI), adjusted for household size (click here​ for the Workforce Housing Program Income Guidelines); and
  • Net worth cannot exceed 50% of the sales price of the workforce housing unit.

For information on calculating annual gross income and net worth, click here.

Additionally, the buyer must be able to secure their own first mortgage from a mortgage lender acceptable to the city. The city reserves the right to deny the application of any household if it determines that such mortgage contains deceptive, predatory or abusive terms.

Also for first-time homebuyers, the head of household and spouse and any other adult, non-dependent member of the household to be shown on the deed of trust note as a borrower are required to attend a Virginia Housing Development Authority (VHDA)-certified Home Ownership Educational Seminar class and receive a certificate.

To view a list of Virginia Housing Development Authority (VHDA)-certified classes, visit www.vhdafreeclass.com.

 Restrictions & Requirements

Resale Restictions

​In order to preserve the future affordability of a workforce housing unit, the owner must offer the city first right of refusal when he or she wants to sell the unit. The city may decide to purchase and hold the unit, or the city may opt to assign its right to purchase to a new eligible buyer from the Workforce Housing waiting list. The City, or the new eligible buyer, will pay the owner the fair market price for the workforce housing unit, which will be determined by a Market Approach to Value appraisal, which is based on the fair market value of comparable properties that have recently sold.

Should the City not exercise its right to purchase, or if the City opts to purchase and assign its right to purchase to an eligible buyer from the waiting list, but no eligible buyers express interest in purchasing the unit within 90 days of the time the owner first notifies the City of their intent to sell, the City shall notify the owner, in writing, and the owner will thereafter have the right to sell the unit to any other person or entity, in the resale restrictions terminate.

In either event, the city will receive the amount of the Workforce Housing Discount secured by its second deed of trust plus the shared net appreciation. If the City purchases and holds the unit, or if the unit is sold to the general public, the recaptured funds will be deposited into the Workforce Housing Revolving Fund and these funds will be reinvested in the Workforce Housing Program for the purpose of preserving or creating affordable housing.

If the city assigns its right to purchase, and an eligible buyer purchases the unit, the recaptured funds will then be provided as a second deed of trust to the new eligible buyer in order to help them buy down their first mortgage.


Refinance Restrictions 

The following restrictions apply to owners of workforce housing units:

  • No owner shall refinance or encumber the unit with any other mortgage loan, home equity loan, or other debt instrument without prior written approval from the Director of the Department of Housing and Neighborhood Preservation;
  • In no case shall the owner be allowed to pay off the second mortgage issued by the city until he or she resells the unit;
  • In no circumstance may the owner refinance his or her workforce housing unit with a loan that has a total loan-to-value ratio greater than the owner’s proportional share of the initial purchase price; and
  • The workforce housing deed of trust shall not be subordinated to any other mortgage or encumbrance except a valid purchase money first deed of trust.

See an example of how to calculate the amount of equity available when refinancing.


Occupancy Requirements

The owner of a workforce housing unit must adhere to the following requirements:

  • Unit must be owned and occupied as the principal residence of the eligible buyer for as long as they own the unit; and
  • The owner must annually sign and have notarized, and deliver to the Department of Housing and Neighborhood Preservation, an affidavit certifying to their occupancy of the unit.

 Shared Appreciation Program

​The Workforce Housing Program is a shared appreciation program where a portion of the accrued equity in the workforce housing unit will belong to the City of Virginia Beach upon the sale or transfer of the unit.

At the closing, the developer will sell the workforce housing unit to an eligible buyer, and the eligible buyer will pay the developer a discounted sales price. The eligible buyer will secure a first mortgage, and the city will provide a second mortgage in the amount of the workforce housing discount. For example

Fair Market Value of the WFH Unit$240,000.00
25% WFH Discount (Developer’s obligation to City) -$60,000.00
Discounted Sales Price (Amount due to Developer)$180,000.00
Initial Sales Price to Eligible Buyer$240,000.00
Eligible Buyer to Provide Own Financing for$180,000.00
City Holds Second Mortgage (25% WFH Discount)$60,000.00

The city’s second deed of trust (mortgage) carries a 0% interest rate, requires no monthly payments, and is due and payable to the city upon resale or transfer of the unit. The city’s second deed of trust secures repayment of the loan made by the city in the amount of the WFH Discount, plus a proportionate share of the net appreciation of the unit. For example, if the amount of the second deed of trust equals 25% of the initial sales price, the amount of shared appreciation owed to the city will be 25% of the net appreciation of the unit. The WFH Discount a buyer receives may vary (between 1% and 25%). Net appreciation is determined by subtracting the following items from the resale price of the workforce housing unit:

  • Original principal amount of the first mortgage loan;
  • The principal amount of the city’s second deed of trust note;
  • Closing costs actually paid when the owner/seller initially purchased the unit;
  • The owner/sellers down payment;
  • The appraised value of any capital improvements approved by the city, and
  • The reasonable and customary sales commission paid by the seller.

See an example of how to calculate the Shared Net Appreciation due to the city upon resale.

Contact Information