Buying New Construction in Virginia: Builder Title Ties, Rate Buydowns and Supplemental Taxes
Updated October 2026
A builder's $20,000 incentive can represent closing-cost assistance, discount points, a temporary payment subsidy, or some combination of all three. For a new home in Loudoun County or suburban Richmond, the useful question is what the incentive buys after comparing the home's price, mortgage terms, settlement charges, and completed-property tax bill.
Unbundle the lender and title package
Request a written breakdown of every incentive condition. A credit tied to the builder's preferred lender may disappear if you finance elsewhere, while advertised savings can be offset by a higher rate or additional fees.
Ask whether the builder, lender, and settlement company have affiliated ownership, and obtain any required affiliated-business disclosure. Federal rules restrict certain required-use arrangements and prohibit a seller from requiring a particular title insurer as a condition of sale. Do not assume every preferred-provider condition is either automatically lawful or automatically prohibited.
Compare competing Loan Estimates on the same day using the same loan amount, lock period, and down payment. The Consumer Financial Protection Bureau explains mortgage comparisons and settlement shopping. Dogwood & Dormer's closing cost estimator helps organize the line items.
Distinguish temporary subsidies from permanent pricing
A 2-1 buydown typically subsidizes payments as if the rate were two percentage points lower in year one and one point lower in year two. The note rate remains unchanged, and qualification generally uses the full note-rate payment.
| Incentive | Main question |
|---|---|
| Temporary buydown | Can you afford the unsubsidized payment? |
| Permanent discount points | Will you keep the loan long enough to recover the cost? |
| Closing-cost credit | Are the covered charges actually payable under program rules? |
Check today's rates before assigning value to the builder's advertised offer. For 2026, the baseline conforming limit is $832,750 in Richmond, while eligible high-cost Northern Virginia counties can reach $1,249,125. Verify the property jurisdiction through FHFA Loan Limits.
Budget for the completed home's assessment
The first tax estimate may reflect vacant land or a partially completed structure. After completion, an additional assessment or supplemental bill can create an escrow shortage and a materially higher monthly payment.
Ask the assessor when improvements enter the tax roll and whether prorated additional taxes will be billed separately. Budget using the finished home's expected assessed value and the locality's rate. Also separate HOA dues, special assessments, and builder deposits from ordinary mortgage escrow so the advertised payment does not conceal recurring ownership costs.
Compare Current Mortgage Rates
Compare current APRs, points, fees, and estimated monthly payments from participating lenders below.
Loan Program Comparison: 2026 Benchmarks
Buying New Construction in Virginia: Builder Title Ties, Rate Buydowns and Supplemental Taxes — Choose a mortgage by comparing eligibility, upfront cash and total monthly costs, not the advertised rate alone. Conventional, FHA, VA and USDA serve different borrowers. Confirm county limits, taxes, insurance and lender requirements before comparing personalized Loan Estimates for your household.
Historical 2025 one-unit comparison: conforming $806,500; FHA floor $524,225. County and unit-count limits can differ.
| Loan program | Down payment / equity | 2026 one-unit baseline | Costs and page-specific comparison |
|---|---|---|---|
| Conventional | 3%–5% subject to eligibility | $832,750 | PMI generally below 20% down |
| FHA | 3.5% at 580+; 10% at 500–579 | $541,287 floor | 1.75% upfront MIP; 0.55% annual for >95% LTV, base loan ≤$726,200, term >15 years |
| VA | 0% for eligible borrowers | No VA limit with full entitlement | No monthly PMI; funding fee unless exempt |
| USDA | 0% for eligible borrowers | Income, address and repayment eligibility | Guarantee and annual fees; confirm current schedule |
| Jumbo | Lender-specific cash and reserves | Above applicable conforming limit | Lender-specific pricing and insurance |
| Home Equity / Refinance | Equity and underwriting dependent | Property and lender dependent | Compare closing costs, term and break-even |
Sources: FHFA limits; HUD FHA limits.
Editorial Methodology & Primary Sources
Verification date: Not recorded; check the primary source and lender timestamp before relying on an estimate.
Rate comparisons use participating lender feeds, not a whole-market survey or guaranteed offers. Freddie Mac PMMS is a market benchmark, not a personalized quote. Calculator models rely on published regulatory formulas and disclosed assumptions rather than fabricated first-person loan testing.
Monthly principal and interest use the amortization formula P × r / (1 − (1 + r)−n), where r is the monthly note rate and n is the number of payments; at zero interest use P / n. PITI adds monthly property taxes and homeowners insurance; PMI is separate. APR includes applicable finance charges under Regulation Z and is not the note rate used for payments. Compare lender Loan Estimates for actual APR and fees.
- Consumer Financial Protection Bureau (CFPB) — Loan Estimates, APR and borrower disclosures; Regulation Z.
- U.S. Department of Housing and Urban Development (HUD / FHA) — FHA program guidance.
- U.S. Department of Veterans Affairs (VA) — VA loan eligibility and benefits.
- Freddie Mac Primary Mortgage Market Survey (PMMS) — published rate benchmarks.
- U.S. Census state tax collections — state property tax benchmarks; confirm parcel-specific assessments and exemptions with the state revenue department and local assessor.
The payment snapshot uses illustrative annual taxes of 1% of home price, $1,200 insurance and 0.5% PMI below 20% down, not verified local quotes. Other calculators disclose their inputs and assumptions. Published guidance and lender feeds may change independently; confirm current program rules, taxes and offers before a decision.