FHA Loan Options for Richmond Metro
Comprehensive guide to FHA financing in Henrico and Chesterfield counties. Loan limits, underwriting rules, condo eligibility, cost scenarios, and local lender overlays.
$707,250
Henrico & Chesterfield 2026
620
Virginia Housing FHA program
3.5%
Typical FHA minimum
0.55%
Mortgage insurance premium
FHA Basics for Richmond
What "FHA-approved" means and how it works in the local market
Single-Family & Townhomes
Fee-simple homes and townhomes do NOT require "project approval" by FHA. Instead:
- Home must meet FHA property standards
- Lender underwritten to FHA rules
- Appraisal must support the value
Being priced under $700K does NOT automatically mean FHA-eligible—appraisal and borrower qualification still apply.
Condominium Projects
Condos require FHA approval of the entire project or single-unit approval path.
- Check HUD's FHA-approved condo list first
- Many condo listings under $700K are NOT FHA-eligible
- Virginia Housing requires lender certification of condo approval
This is a common blocker for FHA financing in new construction townhome communities that are legally condominiums.
2026 FHA Loan Limits
Henrico County and Chesterfield County
FHA loan limits apply to the base loan amount (before adding financed Upfront Mortgage Insurance Premium). A $700,000 purchase with 3.5% down has a base loan of $675,500, which stays within the county limit.
Source: HUD CY2026 forward limits file. UFMIP (typically 1.75% of base loan) can be financed on top without exceeding the county limit.
Monthly Payment Scenarios
3.5% down @ 6.11% rate, with FHA insurance costs included
| Purchase Price | Down Pmt | Base Loan | Monthly P&I | Monthly MIP | Est. Total |
|---|---|---|---|---|---|
| $400,000 | $14,000 | $386,000 | $2,383 | $177 | $2,560 |
| $550,000 | $19,250 | $530,750 | $3,276 | $243 | $3,519 |
| $700,000 | $24,500 | $675,500 | $4,169 | $310 | $4,479 |
Includes 1.75% UFMIP financed into the loan and 0.55% annual MIP. Excludes taxes, insurance, and HOA dues. Interest rate as of March 12, 2026.
Underwriting Rules & Local Overlays
Virginia Housing and local lender requirements
Virginia Housing FHA Program
Important Notes on Overlays
FHA's baseline rules are set by HUD, but lenders add their own "overlays" on top. Examples in the Richmond market:
- Atlantic Bay requires 620 credit (FHA minimum is 580), and varies overlays by loan profile
- Longer bankruptcy/foreclosure seasoning may apply with manual underwriting or certain DPA channels
- Repair escrow restrictions vary by lender and channel (especially Virginia Housing)
Always ask lenders directly about their specific overlays for your situation.
FHA vs Conventional vs VA
Richmond borrower profiles
| Scenario | FHA | Conventional | VA |
|---|---|---|---|
| 620 credit / 40% DTI | Often workable with AUS; Virginia Housing allows this | Possible but tighter pricing and PMI adjustments | Varies by lender; service history required |
| 740 credit / 35% DTI | Strong, but ongoing 0.55% MIP adds cost over time | Often cheaper PMI; removable at 80% LTV | Often attractive if eligible; low/no MI in many cases |
| Mortgage Insurance | Upfront (1.75%) + annual (0.55%) for life of loan | PMI at 5% down; cancellable per lending rules | Funding fee applies; varies by down payment |
At 6.11% rates, FHA's value depends on borrower credit profile and whether conventional PMI would be materially cheaper than lifetime MIP.
Richmond-Area FHA Lenders
Programs and published overlays
Virginia Housing
State HFA (program channel)Min 620 credit, max 50% DTI with AUS, repair escrows restricted
Atlantic Bay Mortgage Group
Retail lenderPublished credit score minimums; overlays vary by profile
TowneBank Mortgage
Retail lenderFHA purchase loan products available; contact for specific overlays
NFM Lending
Mortgage lenderConsumer education on FHA qualification; overlays vary
Always contact lenders directly to confirm current programs and overlays for your specific situation.
Market Realities
Why some sub-$700K homes are NOT FHA-closeable
The Condo Trap
Many sub-$700K townhome communities are legally condominiums, which require HUD condo approval. If the project isn't approved, the whole deal is blocked.
Builder/Seller Preference
New construction builders may steer toward conventional financing to avoid perceived appraisal risk or closing timeline friction (market practice, not an FHA rule).
Repair Escrow Constraints
Some channels like Virginia Housing prohibit post-closing structural or major mechanical repairs. If the appraisal requires work, you may be stuck.
Bottom Line
Price alone (not being under $700K) does not guarantee FHA eligibility. Always verify: loan amount fits county limits, property type (condo approval?), appraisal supports value, and lender will accept FHA for the specific property.