The Virginia Homebuyer’s Guide to New Construction

Are you having trouble finding a home for sale that checks all your boxes? If your timeline and budget are not terribly strict, then opting for new construction can be beneficial in many ways. Building instead of buying is an especially attractive option when the market is hot. Spare yourself the scarce inventory and bidding wars. Read more about new home construction in Virginia to see if it’s right for you!

Why Choose New Construction Over Previously Existing Homes?

Deciding between new construction and a pre-existing home on the market comes down to what best fits your needs. Below are some initial thoughts to get you started:

Before we dive into the nitty-gritty, let’s look at the top benefits of choosing new construction:

  • New construction means the home will be up to the latest home standards of today.
  • Avoid the repairs and other issues that you would run into with an older home.
  • You will be less likely to have maintenance issues soon after moving in.
  • You won’t have to deal with outdated practices, such as the use of lead-based paint in the home.
  • Newly built homes tend to be more energy efficient as well, which can save you money due to newer windows, insulation, HVAC equipment, appliances.
  • The cost may be similar or even less than bidding on an existing home, while getting everything brand new and how you want it.

Cost of Building vs. Buying a Home in VA

For many prospective homeowners, budget and cost are a primary factor in making their decision. Continue reading to learn more about what prices you can expect for new construction vs. existing homes.

To pick up on the last point, let’s look at where the Virginia real estate market stands now with average prices for building vs. buying a home.


Buying a home in Virginia

  • The typical home value in Virginia is $345,592, according to Zillow.
  • Virginia REALTORS® predicts that home prices will continue to rise in 2022 but at a more modest pace.
  • The inventory shortage is expected to continue through 2022 and beyond.


Building a home in Virginia

  • The typical price range to build a house is $117,718-$449,113, according to HomeAdvisor.
  • The price of building a new home is partly based on the cost of materials and labor, which can fluctuate. However, you also have some control over the total cost based on the floor plan and finishes you choose.
  • The Shenandoah Valley offers plenty of open space to build a new home on, so you don’t have to worry as much about inventory shortages.


Building a New Home Step by Step

Wondering what goes into building a new home? Our list below can help you understand each step in the process.

Choose between a manufactured or modular home vs. “stick-built” new construction. F&M Mortgage offers construction loans for both types of new housing. Manufactured housing offers the same choices of floor plan and materials, but the home is built in a factory and assembled on-site. If you choose stick-built, you can expect the process to play out in the following sequence:

  • Interview builders and contractors to find the right one for you. Ask family and friends for recommendations and read online reviews. Contractors in Virginia should be licensed under the Department of Professional and Occupational Regulation (DPOR). The state also publishes some great guides for consumers, such as “What to Look For (and Look OUT For) In a Contractor”.
  • Obtain F&M Mortgage offers short-term construction or build loans that we will help you refinance into a permanent mortgage after the house is finished.
  • Find a land lot to build on. Unless buying into a planned subdivision, you’ll need to purchase a lot for your new home.
  • Prepare the construction site. Now, your builder will get ready to begin construction by getting permits, leveling the ground, installing a temporary foundation, and more.
  • Complete the initial framing and foundations. It’s exciting to watch the shape of your home go up.
  • Install rough plumbing, electrical work, and an HVAC system.
  • Put in drywall and interior fixtures and trim. This is a fun stage as you see the counters, flooring, cabinets, etc.
  • Finish with exterior fixtures, driveway, and flooring. Watch the rest of your home come together exactly as you envisioned.
  • Walkthrough the home with your contractor to make sure everything is finished as you wanted it to be. Once you get the certificate of occupancy, you can move in.


Choose a mortgage lender who is experienced with new construction!

Choosing the right lender for your home construction loan is just as important as finding a builder. A local partner like F&M Bank can help guide you in the right direction. When you apply for a construction loan from F&M Mortgage, you can expect a seamless and user-friendly construction loan process.

Our Approved Builder Modular Construction Loan Program minimizes your construction loan costs and offers low down payment options to qualified borrowers. F&M Mortgage and our parent company F&M Bank will handle both the permanent financing and the construction funding. We will work closely with your builder to help ensure a smooth process.

F&M Mortgage has been offering full-service home mortgages to the Shenandoah Valley and beyond since 1999. Along with parent company F&M Bank, our professional mortgage advisors have loan options and mortgages to meet your residential and commercial lending needs.

Contact F&M Mortgage to make an appointment with an experienced advisor and get started now!

Guide to Navigating a Competitive Housing Market in the Shenandoah Valley

While Virginia’s housing market has cooled a bit recently, market conditions are still strong with relatively low inventory and rising prices. A hot real estate market is known as a “seller’s market,” where homeowners who list their properties have the upper hand in choosing from multiple bids and often get more than they listed the house for. So, how can homebuyers land their dream home in 2021 or get ready to look in 2022? Before you jump in and get burned, make sure you are prepared with our guide for how to buy a house in today’s housing market in the Shenandoah Valley.

Get pre-approved

In a competitive housing market, there are a few important things to keep in mind: Get your pre-approval done as soon as you can. Be ready to act fast, have a good and reliable insurance agent that will be ready to move, know what you are looking for in a home, and be prepared that things can get bumpy during these tumultuous times! Overall, just keep a positive attitude and be proactive! - Tina Lantz, Mortgage Advisor

Many real estate agents will request a pre-approval letter before they show you houses. This is because real estate agents, like everyone else, don’t want to waste their time. Getting pre-approved means you are a serious buyer who has sat down with a lender and had your credit history and income vetted.

The pre-approval process will also help you avoid wasting your own time. When you go to a lender to get pre-approved, they will provide a borrowing range with a certain ceiling. That lets you know what kind of price range you should be looking in, saving you the time and heartache of falling in love with a home you can’t afford.

Finally, sellers don’t want to waste their time on a buyer whose financing isn’t lined up in advance. Especially in a hot market when sellers may receive multiple offers, a pre-approval letter can make your offer more attractive to the seller.

Luckily, the pre-approval process is swift and convenient at F&M Mortgage. Contact one of our Mortgage Advisors to get pre-approved and we will help guide you through the home purchasing process.  We strive to make your experience as smooth and easy as possible.  We want to help bring you HOME.

Let your real estate agent do the legwork

Work with a knowledgeable Real Estate agent, find a local lender that can educate you and guide you through the process, and submit all required documents in a timely manner so you can move into your home as estimated! - Vicky Harrison, Mortgage Advisor

Real estate agents have much more experience matching buyers with the right home than you do with buying a home. Talk to your agent about your wish list, must-haves, and overall goals for your new home. They just may be able to find you a diamond in the rough or a home that’s perfect for you but didn’t catch your eye. Real estate agents may also hear of homes that are about to come to market, giving you a head start on making an offer.

While today’s homebuyers can scroll endlessly through online listings, it’s not always productive. Letting your real estate agent do some or most of the legwork for you will free you up to focus on other aspects of the home buying process, such as collecting documents to submit with your mortgage application.

Required Supporting Documents for Your Mortgage Application

Be fully preapproved by a local lender and keep your loan documents current with your lender to head off any potential issues. Work with a seasoned real estate professional or one represented by a strong team that is well known and respected in your market. - Jon Ischinger, Senior Mortgage Advisor

Applying for a mortgage entails a thorough examination of your financial history and current situation. If you are buying the house with another person who will be on the mortgage loan, they will need to submit the same documentation such as:


    • Copy of your government-issued photo ID
    • Pay stubs from the past month
    • Two years of federal tax returns
    • Checking, savings, and other financial account statements from the past two months
    • And additional documents as needed


As much as possible, collect these documents in advance to speed up the pre-approval and application process and make it as efficient as possible. If you have questions about the application process, our own Tonja Showalter, Jonathan Ischinger, and other lenders in Harrisonburg can help you.

Should you waive the home inspection or not?

While lenders usually require a home appraisal before approving your mortgage loan, the home inspection is discretionary and up to you to schedule and pay for. In a hot and competitive real estate market, you may be tempted to waive the home inspection so the seller will be more likely to choose your offer over others. However, skipping the home inspection could be very expensive and inconvenient later if there are large or chronic issues that you’re unaware of before you buy the home.

That’s why a home inspection is such an important step. It protects you from buying a home with issues you’re not aware of, as well as potentially giving you leverage to negotiate the sales price lower if a large repair comes up during the inspection. For example, what if the heater is about a year away from needing to be replaced or the roof is old and could need replacing any day now? It’s better to do your due diligence rather than face the potentially expensive consequences.

Keep calm and carry on with persistence

In today's housing market, you may not end up securing a home with your first attempt. Persistence is key - stay the course and work with your realtor and lender to find the right opportunity.

In today’s market, every buyer needs to be flexible and open to making compromises. Maybe you can’t get everything you want but you can get most of what you want. Before you make an offer, figure out the strongest number you can present (within your budget).

Find a good real estate agent who is experienced and will take time to answer your questions. Ask friends and family for recommendations. The same thing goes for finding a lender—you want someone who speaks to you respectfully and will answer your phone calls and questions.

Looking for a mortgage advisor who speaks Spanish or Italian in Harrisonburg, VA? Contact our own Gervasio Amato or Veronica Amato, a bilingual mortgage advisor in Harrisonburg.

F&M Mortgage Can Help You Navigate the Housing Market!

Have an updated pre-qualification in hand with a local lender who is not only available from 9:00-5:00 Monday through Friday because if you need help or have a question, you will want to be working with a local lender that you can reach. - Veronica Amato, Senior Mortgage Advisor - Bilingual - English & Spanish

F&M Mortgage has been offering full-service home mortgages to the Shenandoah Valley and beyond since 1999. Along with parent company F&M Bank, our professional mortgage advisors offer personalized and friendly service to help you find the right loan options and mortgages to meet your residential and commercial lending needs. Considering new construction as an alternative to buying your home? Learn more about the pros and cons in our Guide to Construction Loans.

Contact F&M Mortgage to make an appointment with an experienced mortgage advisor and get started now! Looking for a mortgage advisor in Augusta County (Staunton), VA? Contact our own Tina Lantz or Vicky Harrison.

Understanding a HELOC and How To Use It: A Guide For Shenandoah Valley Homeowners

Your home is an investment in many ways, and once you accrue equity in your home, you have it at your disposal for financial uses. If you’ve been wondering why apply for a HELOC, we’ll walk you through what a HELOC is, all the things you can use it for, and how to make the most out of your HELOC. Whether you’ve built home equity from paying down your mortgage and/or the appreciating value of your house within the market, you can benefit from your ownership of the home to finance projects and consolidate debt.

What is a HELOC?

A HELOC shares similarities with products such as credit cards, but it has its own unique benefits that make it an appealing solution for homeowners with lending needs.

A Home Equity Line of Credit (HELOC) is a revolving credit account, similar to a credit card, that provides a credit limit for a certain amount of time (the draw period). You only draw funds from the account when you need to, make payments on what you borrowed, and use the credit line again until the end of the draw period.


While a HELOC is similar to a credit card account, the primary difference between the two is what kind of interest rate you can get. Because HELOCs are secured by your home equity, you can get a much lower rate than you would with a credit card. So, financing home renovations and other large expenses with a HELOC is usually more affordable than using a credit card or personal loan. Depending on how much equity you have in your home, you may also be able to get a higher credit limit with your HELOC than with a credit card or personal loan.


The other attractive benefit of a HELOC is its flexibility. Unlike a Home Equity Loan, you don’t receive a lump sum that you have to use right away. In fact, some people use the HELOC as an emergency account. You can open it now and won’t owe anything until you first draw funds. Then you can use your HELOC as many times as you want to (up to the credit limit) through the draw period.

Using a HELOC for Home Renovation

Home Equity Lines of Credit are often used to finance projects that can improve the value of your home, such as home renovation.

Have you been dreaming of a brand new kitchen? Need to add an addition to your home to create office space or room for a new baby? A Home Equity Line of Credit is a convenient way to finance your home renovation.


  • Lower interest rates
  • Option to make interest-only payments
  • Possible tax deduction for interest paid on HELOC if the funds are used to buy, build or substantially improve your residence. Please consult your tax advisor regarding your particular situation.
  • Potential ROI when you sell your home from renovations financed through your HELOC
  • Variety of uses such as updating your home to meet your needs, improve energy efficiency, and more.
  • Great option for when you’re looking to sell your home but want to increase its value first

Using a HELOC For Debt Consolidation

If you are looking to consolidate debt from multiple sources, a HELOC could be a great option to centralize your payments in one place.

Are you drowning in credit card debt? Do you have so many different monthly debt payments, it’s hard to keep track?

Debt consolidation means taking out a new loan to pay off multiple debt accounts, such as credit card balances, personal loans, student loans, and more. Consolidating your debt with a HELOC could help you save money on interest and reduce the number of monthly bills you need to keep track of. And since HELOCs are so flexible, you may still have some credit left over to use on other things, or you can pay off your HELOC balance before using it again.

Using a HELOC For a Second Home or Investment Property

Whether you’re looking to purchase a vacation home or an investment property, you can use your HELOC to come up with a down payment on your second property and/or to make improvements and repairs to a second property you already own.

Financing Education Expenses

Whether you’re a parent with a child approaching college age, or an adult homeowner looking to return to school, a HELOC can also be used to pay for tuition and associated expenses with higher education, as well as private schools. Pay as you go and make interest-only payments if you need to keep your costs down while in school.

Paying Off Medical Debt

Whether you just got hit with a high medical bill, or you know an expensive surgery or treatment is coming up, you can use your HELOC as an emergency fund or to pay off medical debt. As mentioned earlier, HELOCs offer lower rates than credit cards, so it could be a more affordable way to pay your medical bills or any other large, unexpected expense that comes up. Preserve retirement savings and use your HELOC instead.

Tips For Getting The Most Out of Your HELOC

Review the tips below to further understand the best ways you can use and manage a home equity line of credit.

While there are many advantages to having a HELOC, you can get the most of your new Home Equity Line of Credit by following these tips:

  • Make on-time payments to avoid a late fee.
  • Pay more than just the interest due if possible.
  • Know when your HELOC draw period ends.
  • Review the terms of your HELOC and be mindful of fees.
  • Understand the closing costs associated with your HELOC.
  • Best used for smaller projects and expenses.
  • Try to use your HELOC, pay off what you borrow, and then use it again instead of maxing out your credit limit.

Apply for a HELOC From F&M Bank!

Looking for a HELOC lender in the Shenandoah valley? F&M Mortgage is a true local mortgage company that has served the community since 1999. Contact us to learn more or start the process of applying for a Home Equity Line of Credit. You can also apply online whenever you like, or visit your local branch office in Staunton, Harrisonburg, Winchester, or one of our locations in Augusta, Page, Rockingham, Frederick, or Shenandoah county to speak with a loan officer about your options.

Guide to Home Renovation Loans in the Shenandoah Valley

Do you have a home renovation project on your to-do list?

Whether you are preparing your home for sale or looking to improve your existing space, renovation financing can help you modernize your kitchen, update your bathroom, add an extra bedroom, and more. Renovation loans can also be obtained when you purchase a home that needs fixing up.

Here in the Shenandoah Valley, local real estate markets are heating up. You may have more equity in your home than you realize. Whether you’re still in the dreaming phase or ready to hire a contractor, let’s explore what renovation loans are and the different types of financing you can obtain.

What are renovation loans?

A renovation loan is a great option if you don't want to move, but do want more space in your home.

There isn’t one type of home renovation or home improvement loan. We’ll explore the different options for renovation loans below; for now, all you need to know is that a home renovation loan is any type of financing used to renovate or improve your loan.

Why use a renovation loan?

There are many reasons to finance home renovations. Here are a few examples:

  • Take out a home renovation loan when you buy your house to make a fixer-upper livable.
  • It can be cheaper to finance an addition and other improvements to your existing home instead of covering the costs of selling it and buying a new one.
  • You may be able to sell your home quicker and for a higher price if you do a complete renovation first.

What can renovation loans be used for?

Renovation projects such as roof repairs, new siding, and updated windows will save you money in the long run and make your home a safer place.

There is almost no limit to what your home renovation financing can be used for. From cosmetic improvements to essential repairs, here are some ideas:

  • Roof repairs
  • New siding
  • Updated windows
  • New flooring
  • Installing/updating heating and cooling systems
  • Solar panels and other energy improvements
  • Mold remediation/waterproofing
  • New kitchen or bathroom that would add value to the house
  • Addition to add square footage/another bedroom
  • Get rid of termites and other unwanted pests

Home Renovation Costs in the Shenandoah Valley

Overall, the cost of a general home renovation project in Staunton, VA ranges from a minimum of $8,249 to a max cost of $65,998 with an average of $37,123.

In Harrisonburg, the range is $8,850 to $70,807 and the average is $39,828.

The average cost of a general home renovation project in Staunton, VA averages $37,123.

Let’s look at average costs for specific types of renovation projects:

Kitchen Remodel

  • The average cost in Staunton is $20,686.
  • The average cost in Harrisonburg is $21,283.


  • The average cost in Harrisonburg is $9,208.
  • The average cost in Staunton is $8,242.

Pool Installation

The average cost of inground pool installation is $8,192 in Harrisonburg and $7,242 in Staunton.

The Pros and Cons of Using Renovation Loans

As with any financing decision, there are both benefits and risks to taking on a renovation loan. Our experienced mortgage team can help you weigh the pros and cons of your own situation so you can find the best solution for your home renovation needs.

Weigh the pros and cons of your own situation so you can find the solution for your home renovation needs.


  • Structured payments
  • Begin your project right away
  • Home equity loans usually have fixed rates, meaning your monthly payment is likely to stay the same each month.
  • You can move any unused money from your loan to an interest-bearing account to earn interest.
  • Interest rates for HELOC are low–and usually lower than personal loans or credit cards.
  • The flexibility of choosing what renovation projects to use the loan for


  • If the market value of your home declines, you may end up owing more on your mortgage and home renovation loan than your house could theoretically sell for. However, this is less of a risk if you plan to stay in your home long-term.
  • A home equity loan is a secured loan against your house so if you stop making payments the bank can take possession of your house.
  • The process of applying for a home renovation loan can be as involved and lengthy as applying for a mortgage, depending on the type of financing you choose.

Renovation Loan Options

When it comes to renovation financing, homeowners have many options to choose from. For homeowners in the Shenandoah Valley, F&M Mortgage offers renovation loans with as little as 5% down payment. Are all loan options created equal? Here’s what you need to know:

  • Home Equity Lines of Credit (HELOC): For homeowners who have ongoing renovation projects. A HELOC is a revolving account that can be used, paid back, and used again. Must have enough equity in your home (the difference between its current market value and any mortgage balances you have).
  • Home Equity Loan: A term loan, usually with a fixed rate and predictable monthly payments. Best for homeowners who need to finance just one (bigger) renovation project and want to pay off what they owe over a long period of time. Must have enough equity in your home.
  • Personal Loans: A decent option for homeowners without enough equity to qualify a secured renovation loan. However, an unsecured personal loan will usually have a higher rate. Best for smaller, less expensive projects.
  • Credit Cards: We don’t recommend using credit cards to fund home renovation projects and purchases unless you can re-pay the amount owed within the same billing cycle.
  • Cash-Out Refinance: Replace your existing mortgage with a new loan and get up to 80% of your home’s market value back in cash. Recommended for home improvement projects that add value to your house, but can be used for anything, including non-renovation expenses like college tuition.
  • FHA Title-1 Loan: Specifically for home improvement, this type of financing allows borrowers to fund repairs and renovations. No home equity required when borrowing less than $7500. Borrow up to $25k for single family homes and $60k for multi-family homes.

New Purchase Renovation/Improvement Loans

A FHA 203k Rehab Loan requires only a 3.5% down payment and a 640 credit score for first-time buyers.

  • FHA 203k Rehab Loan: Requires only a 3.5% down payment and you can receive up to $35k for repairs and renovations. Minimum 640 credit score and available for first-time buyers or refinancing.
  • Fannie Mae HomeStyle Renovation Loan: A combination purchase and renovation loan that provides up to $25k for renovations and improvements.
  • Freddie Mac Renovation Mortgage: Provides permanent financing to replace Interim Construction Financing. Can be used for land purchases, site-built homes, and renovations/repairs to existing homes.
  • VA Renovation Loan: No down payment and no private mortgage insurance.

Virginia Laws and Regulations

Check with your local municipality regarding permitting requirements. Here are two statewide rules to keep in mind as well:

  • Must obtain a permit before starting most large home renovations, and the house must be inspected before obtaining a permit.
  • Must provide the state with building plans, contractor licenses, and other applicable documentation.

Apply for a home equity loan or HELOC today!

Visit a branch near you or Contact Us to get started on your Home Equity Line of Credit with Free Debit Card Today.

Current F&M Bank Customers – Send us a message in Online Banking or Mobile Banking to get started!


2021 Guide to Owning a Modular Home in the Shenandoah Valley

If you’re reading this, you’re probably interested in modular homes. Maybe you already know you want to build one or you’re still in the information-gathering stage. Wherever you are in the process, we cover it all in this exhaustive guide. From the benefits of owning a modular home, to what the process looks like, how to obtain financing, and more–F&M Mortgage’s friendly team of knowledgeable advisors is here to help. Our company has a division dedicated to modular construction financing and we have extensive local experience helping Shenandoah Valley residents build modular homes.

In this article, you will also find answers to frequently asked questions from local advisors and builders. If you have additional questions as you read, give us a call!

Modular Home Benefits

Modular Homes offer endless new home designs and most factories will allow you to use your customized plans, which is why modular is a popular way to build a home.

According to the Washington Post, modular homes have many admirers, including top architects and celebrities like Robert Redford. Among everyday home buyers, time is one of the most attractive benefits of going modular. Because the modules are constructed in a factory, the entire process is shorter than traditional construction. Additionally, modular home factories aren’t subject to weather and labor-related delays. Here are some more modular home benefits:

  • Factory Construction: Modular is just another way to build your home! Individual modules are built in a factory and assembled on site. This could save time and money. It also means the interior of your home is not exposed to the elements, reducing the risks of mold and mildew. Site-built homes are built almost entirely outside on your lot or piece of land.
  • Permanent Foundation: Similar to site-built homes you can build your modular home on a basement or crawl space.
  • Endless Design Possibilities: Choose from your builder’s catalog of home plans, add modifications to suit your needs, or ask about your customized home plans.
  • Appearance:Your modular home doesn’t have to have a “generic,” rectangular or box look. Instead, you can choose from traditional architecture styles and models like Cape Cod, Ranch, Two-Story, Colonial, Victorian, and more.
  • Quality: Modular construction is subject to its own rules and building codes, which may often be stricter than site-built construction. You can expect the highest quality and safety standards. Your modular home will also be inspected during the construction and after assembly to ensure compliance with local codes and ordinances. It will then be inspected by a state building inspector.
  • Energy Efficient: Many articles about modular homes tout the environmentally friendly construction process, which results in less waste than site-built construction. That may not be your top priority, but you’ll appreciate the cost savings on utility bills that modular homes often deliver. Because they are built so solidly, they can be more energy efficient than older homes as well as new site-built construction.
  • Cost: Because the factory-built process is more streamlined, with labor and materials already supplied, you can usually avoid the surprise expenses that often accumulate with site-built construction.
  • Real Estate Value: Modular and site-built homes are indistinguishable in appearance and both hold their appraisal value. Of course, fluctuations in your local real estate market can drive values up or down, but the modular nature of your home won’t be a factor.
  • Financing: Obtaining a loan for your modular home is usually as easy as a site-built home or purchase of an existing home. What’s different about modular and what construction lenders like is the limited risk of the build. Since most of the work is done in the factory and inspected, less can happen during the construction period and build of the home. It is important that a lender has a history of providing construction loans since there are a few more moving pieces than a home already built on a lot or in a development. The difference in new construction and what some say end loan or purchase loan, is that you may buy the land, design and build your home using a construction loan before it is really financed into a traditional mortgage loan. F&M Mortgage makes it easy with our unique modular programs. Find the perfect spot, land or piece of property, pick your design or home style and start your construction loan today. We work with your builder to make the entire process as smooth as possible.


An 1,800 square-foot modular home costs $240,000 on average

Of course, one of the biggest questions you’ll have when considering a modular home is how much it costs. According to HomeAdvisor, the national average is $240,000 for modular construction, with an overall range of $180,000-$360,000. You can enter your zip code and project details to get a more specific estimate. Harrisonburg-based Valley Homes offers free quotes when you know the style of your home, type of foundation, interest in adding a covered porch or deck, and garage. Here’s a complete list of factors that could contribute to the total cost of your modular home.

  • Land: As with new construction, you need to own the land or maybe you have land from family where your modular home will be assembled. If you don’t already have a lot or piece of land, you’ll need to buy one. According to a Zillow search of land for sale in the Harrisonburg area, most lots are priced between $100,000-$200,000.
  • Site Improvements and Permits: Your builder and his contractors build a contract of costs associated with the development of the land for the home. Not only are they licensed to do so they are up to date on building requirements locally.
  • Home Plan: The size of your home and the number of upgrades to the interior and exterior will factor into the total cost.


Modular Home Construction Process

Our guide to Building a Home in the Shenandoah Valley contains information that is also relevant to the modular construction and building process. For example, the section on finding a plot of land is the same, as well as some of the interior work (such as drywall) that happens after your modular home is assembled on site.

Overall, it takes about three-four months from contract signing to move-in readiness. Watch the entire process unfold, from floor plan to finished home, in this video from Valley Custom Homes. Use our checklist below to plan for each step on your calendar:

  • Talk to and get approved by a construction loan officer.
  • Find and hire your builder.
  • Find a piece of land.
  • Select a home plan and customize the details.
  • Sign a contract with your builder.
  • Construction Loan Closes and site improvements begin.
  • Home is constructed in a factory.
  • Portions of the loan, called draws, are disbursed to pay for work completed.
  • Carriers with several modules will be delivered and set on your land, where they are assembled.
  • Interior work commences: drywall, electricity, plumbing, and flooring.
  • Exterior finishes are finished or some are construction at site.
  • Any extras such as a garage or porch are constructed.
  • Final Draw is released to builder.
  • Your home is inspected and you are granted a certificate of occupancy.
  • Final Draw is released to the builder.
  • Time to move in!

Questions for an Advisor

Insights from Yana Billet, Director of Sales, Systems Built Division

What is the difference between construction loans and other home loans?
It’s an entirely different process and risk involved. Construction loans allow you to borrow money before the home is built and funding (draws) is disbursed on completed work to a builder during the construction process. Construction loans allow you to build and make the home yours, and it guarantees new with one owner. Other home loans allow you to borrow money to purchase existing homes.

Does my lot need to be paid off to apply for a construction loan?

A lot loan can be paid off as part of the construction loan. It is actually better to purchase the land at the same time you start your construction loan so you only carry one loan at one time and only have one construction closing. That said, if you do own the lot, construction loans should pay off the lot loan or remainder of what is borrowed at construction closing, to only have one loan.

When in the process is a down payment required for a construction loan?

Most lenders would prefer to have some “skin in the game”, so they will require down payment when the loan closes. If it is a construction to permanent loan, down payment is required at close of the construction loan and before construction begins.

At what point should I consider a construction loan during my home search?

At any point if you have or can find land.

How has the pandemic impacted construction lending?

Prices have increased and materials are more difficult to get. For other home loans, prices are up as well. It is a seller’s market.


Questions for a Builder

Insights from Jesse Rutherford, Protech Home Builder, Custom Modular Homes

What should I consider when deciding to hire a builder?

When a client is asking for specific options or features in the purchase of their new home, it is critical to have a contractor that documents changes and itemizes each particular activity required for the completion of the home. Of course, communication is key! Ask your builder if they utilize an online system to upload documents and facilitate communication. Many builders are adding all comments, documents, contracts, change orders, and the project timeline to an online portal for the client! As we move forward into the 2020s, builders having these available to their client are going to be critical.

What are my responsibilities during the construction process?

Make sure you give your builder as many documents (soil reports), plats, easements (electric, county water, utilities) and requirements (covenants) related to your land as possible. It’s important that we have all the info related to your property so that we can make sure we aren’t missing any details that may come up while building your home!

Do you recommend purchasing a house plan online or working directly with an architect?

I recommend doing what you feel most comfortable with! Most home sales are done directly online. However, with an architect, we can get some specific details down that may be overlooked when selling off of an online version.

Do all decisions need to be finalized before construction begins?

They certainly do not, but you should have 90% of what needs to be done figured out before the construction process begins. If you make too many changes during construction, it could result in a lot of out-of-pocket money for change orders!

On average, how long does the construction process take?

We try to start the foundation 30 days before the home is complete from the factory. After that, there aren’t too many complex items, and it typically takes around 90 days to finish. Of course, this is always contingent on weather, labor, and supply availability as well as building official requirements.

How has the pandemic impacted the construction process?

It has never been a better time to buy a home than today! Interest rates are at all-time lows, and it is hard to get much closer to 0%. The main impacts are time frames of supply. We often find ourselves making sure that certain materials are purchased well in advance because of the backlog, but homes across the commonwealth are going up every day!


Insights from Paul Sofia, Masterpiece Homes of the Carolinas

What should I consider when deciding to hire a builder?

Find out what is included in their pricing and ask about their experience. Address your concerns.

What are my responsibilities during the construction process?  

Responsibility lies with the builder during the construction process. The buyer just needs to be patient because it is a process. Delays do happen, especially with weather.

Do you recommend purchasing a house plan online or working directly with an architect? 

An architect is extremely expensive.  There are thousands of plans online that a manufacturer can duplicate through their engineering department.

Do all decisions need to be finalized before construction begins?

Absolutely, especially when dealing with the agreed price! Changes can be made after the fact if both parties sign an addendum.

On average, how long does the construction process take?

Currently, depending on the manufacturer, 8-12 months.

How has the pandemic impacted the construction process?

Costs have increased as well as turn times.


Insights from Walter Cleaton, Home Solutions

What should I consider when deciding to hire a builder?

You should always consider the amount of time a builder has been in construction. Is he licensed and insured to do the work needed? What can your local building official tell you about the builder? A reputable and licensed builder may not always be the cheapest, but should always provide the best work, craftsmanship and experience.

What are my responsibilities during the construction process?

You should take the time to review the home, the options, and all added amenities in person with your builder. Meet with your builder on site, to determine spacing and position of the home. As the buyer, be understanding of weather and unforeseen circumstances, that a builder cannot control. When asked, be prompt in your opinions, documentation, and decision making. Timely communication is the buyer’s greatest responsibility.

Do you recommend purchasing a house plan online or working directly with an architect?

Most plans online will be changed and altered at some point by the buyer. Not all plans online will or can be built to satisfy all codes in every state. If possible, you are usually better served by sitting down with a builder or architect to design your home. Everything done in person is usually better. Nothing beats eye to eye comparison.

Do all decisions need to be finalized before construction begins?

Any decision that can be made prior to construction, and especially a contract, is always better for all parties. Change orders can be discussed and made after construction begins, but if known in the beginning, it will usually save everyone time and money.

On average, how long does the construction process take?

All projects will vary in the time it takes to complete, depending on the size and details of the proposed construction. Weather and the availability of materials can and will play a huge role in the time it takes to complete a project. Basements vs foundations, single story vs two story, etc. Will always be a factor in the time to complete. There is no set time on any project to complete. A builder can only give an approximate timeline, or a worst-case scenario. There is not magical date or timeline that every home should be built or ready by.

How has the pandemic impacted the construction process?

The pandemic has greatly impacted the construction process. Shortages of materials and components, due to depleted work forces, has put the construction industry behind greatly. Companies losing workers due to quarantine has hit the labor force hard. Most construction materials and components have been impacted in some way. The original stockpile of these items have been depleted, and catching up or staying up with demand, with a depleted work force, has caused strain on the construction industry.

Additional Helpful Resources

Ready to start the process of finding a builder and designing your modular home? Here are some local resources.

Financing Options

F&M is your local partner in modular home financing. From purchasing a land lot to construction, and an eventual traditional mortgage, we can help you enjoy a smooth financing process from start to finish. Our Approved Builder Modular Construction Loan Program reduces your construction loan costs and qualified borrowers can take advantage of low down payment options. F&M is proud to be an approved lender for federally guaranteed loans such as FHAVAUSDA, and VHDA. You may be able to use these home loans to finance part or all of your modular home costs. We also offer bridge loans for people who need to finance a new home purchase while waiting for their existing house to sell. Apply online or contact our lending team with any questions you have about modular home financing.

Shenandoah Valley's Modular Home Lender

Building vs. Buying a Home in the Shenandoah Valley

One of the most exciting times in your life can be moving into a new home. You have saved for your down payment and are ready to begin the decision-making process, but now you may have new questions arising. Should I be building or buying my house? How likely is it for me to find my ideal home in today’s housing market? Houses in the Shenandoah Valley tend to be available for only a short time before they are bought, so it can be difficult to find exactly what you are looking for. This guide will help outline the differences between building and buying your house, along with insights from experts on the F&M Mortgage team to help you find your dream home.

Buying a House in Virginia

The residential real estate market in the Shenandoah Valley today moves quickly, with many homes being sold before buyers get the chance to plan and decide.

Advantages of Buying a Home

Some home seekers may want to purchase a home that is already finished and ready to occupy due to their desired timeline for moving in. Buying an existing home can meet this need, along with other advantages. Buying an existing home opens the possibility for price negotiation, depending on the seller and overall market conditions.


Buying a home tends to be a straightforward process, typically requiring a standard mortgage. However, those looking to buy may learn that closing on an already built home in today’s market is not as easy as it may seem.


Disadvantages of Buying a Home

Buying a house is an important financial decision, so many home seekers may find themselves wanting to find their dream home on the market rather than settling for anything less. Compromising for other options may even impact your enthusiasm for moving entirely.


The residential real estate market in the Shenandoah Valley today moves quickly, with many homes being sold before buyers get the chance to plan and decide. Thankfully, building your new home is a viable option for those who are having trouble finding what they’re looking for on the market.


Building a House in Virginia

Having a newly built home can save you unnecessary expenses and stress from unexpected maintenance costs for malfunctioning appliances, HVAC systems, and roofing.

Advantages of Building your Home

When building your home, you have more flexibility and decision-making influence over the design of your house, down to the little details. This includes the floorplan, cabinets, and paint being aligned with your vision on the day you move in. Also, while those buying an existing house can often run into unexpected maintenance costs soon after they close, having a newly built home will afford you being under warranty for years to come. This includes new appliances, HVAC systems, and roofing. This can help put you at ease without having to worry about additional costs soon after making the financial decision of relocating in the first place.


Disadvantages of Building your Home

While building your home is a great alternative to those struggling to find the right existing home on the market today, it may not be the right fit for everyone. Depending on where you are moving from, you may need to be paying for two homes at once until you are able to sell your previous house. It is also important to consider where you will be living throughout the building process and the related expenses. Construction Loans have their differences among other types of mortgages, so we asked our lending team to provide their expertise below.


Ask An Expert!

Construction Loan Q&A with Mortgage Advisors and Contractors

Looking for answers to frequently asked questions about construction loans and the home building process? We reached out to contractors and our mortgage advisors to be your resource. You can review the following insights from our team to learn more:


How has the pandemic impacted the construction process?

We have been experiencing an extended lead time on materials due to manufacturing delays. Many plants have been forced to reduce capacity based on various state laws. When COVID hits a plant, they may even shut down for two weeks, all of this on top of increased demand. We have also seen price increases coming more frequently since the onset of the pandemic.


In the early stages of the pandemic, many homeowners started DIY projects like deck additions/replacements or outdoor playhouse construction. This led to a huge spike in pricing for pressure treated lumber. At the same time, the low housing inventory in the Shenandoah Valley drove an increase in new home construction. Some items have become hard to find, or the lead time is 4 times as long pre-COVID. Currently, this is the market condition with no real end in sight.


Questions for a Contractor

J.M. Snell II, Valley Renovators

What should I consider when deciding to hire a builder?

I believe the most important part of deciding on a builder is relationship. It is the largest purchase most people will ever make, and building a home is an extensive process. The ability to converse openly without fear of embarrassment is critical. Start with doing your own research and finish with an interview.


What are my responsibilities during the construction process?

It starts with a complete understanding of the contract details and progresses to regular, onsite review with a particular focus at key milestones. For example, completion of framing, completion of rough-ins, and obviously final walkthrough inspection. Regularly review your contract documents.


Do you recommend purchasing a house plan online or working directly with an architect?

If you find a plan online from a reputable source that is perfect as drawn, it will be the less expensive route. If the plan you find online isn’t quite right, you are better off doing a design with an architect or builder that offers design build.


Do all decisions need to be finalized before construction begins?

No, BUT realize that changes often result in additional work and expense. The more you can finalize your selections for the original contract, the better. Do your homework by shopping and educating yourself about key concepts that will save money over the life of the home. For example, insulation levels above code requirements, SEER rating on heating/cooling equipment, hot water recirc with insulated pipes, gray water systems, etc.


On average, how long does the construction process take?

Pre-contract negotiation can easily be a month without design time, and the permit process is generally a month. From permitted to completion without changes can be at minimum a 23-week schedule.


Questions for a Contractor

Gary Crummett, Gary Crummett & Sons, LLC

What should I consider when deciding to hire a builder?

You should find a builder who builds to the level of quality that you expect. Different builders build to different quality levels. The best way to find a builder is by word of mouth. Ask your neighbors and friends for recommendations. You will find that one or two names are consistently mentioned. Also, keep in mind that the better builders are busy, so you should plan ahead to allow them to make time for your home in their schedule.


What are my responsibilities during the construction process?

Homeowners should try to make decisions in a timely manner to not impede progress. It is also important that the homeowner convey their vision and expectations to the contractor before the work is done.


Do you recommend purchasing a house plan online or working directly with an architect?

I recommend beginning the process by looking at plans online. This is less expensive provided you can find one that meets your needs and style. Your builder should be able to make minor changes to the plan. However, if you are unable to find a plan you like, you will need to have plans custom drawn by a local draftsperson.


Do all decisions need to be finalized before construction begins?

Major decisions should be finalized before construction begins. Items that a homeowner selects, such as floor coverings, light fixtures, etc., do not have to be final before construction begins, but those decisions need to be made in a timely manner to not delay the progress. Even with the goal of making all decisions upfront, it is realistic to expect that a few changes will occur along the way. Be sure you address how changes will be handled with the builder.


On average, how long does the construction process take?

Construction of a new home can take 7 to 9 months to complete.


Questions for an Advisor

Lisa Wisner, Mortgage Advisor

What is the difference between construction loans and other home loans?

A construction loan is any loan that provides for turning raw land into a completed home. This term encompasses site-built homes as well as manufactured and modular homes. Your initial construction loan is an interest-only mortgage loan, whereby you make monthly payments of only interest, based on the amount that has been paid out to the builder at the time of billing. At completion of construction, F&M Mortgage will update the credit, income, and asset documents to refinance the interest-only mortgage into a final 30-year fixed mortgage.


On at traditional purchase loan, the home is ready for you to move in as soon as closing occurs. The processing and underwriting of construction or traditional purchase loans is the same.


Does my lot need to be paid off to apply for a construction loan?

 Our construction loan can roll the payoff of the land loan (or the purchase of the land) into the construction loan closing. Any down payment made on the land is credited toward the down payment required on the construction loan, provided the value of the land itself exceeds the amount owed.  Additional down payment requirements may apply, based on borrower qualification.


When in the process is a down payment required for a construction loan?

Down payment is due at or before closing on the construction loan, which occurs prior to any work beginning on the project.


At what point should I consider a construction loan during my home search?

You can investigate both construction and traditional purchase simultaneously as you are looking for your perfect home. The decision to go with construction over traditional purchase is a personal decision and is impacted by your timeline for getting from your current living situation into your new permanent home. I would recommend investigating both loan scenarios initially, so you can gather all the information you need to make informed decisions.


How has the pandemic impacted construction lending?

We have seen a significant increase in the cost of building materials, timelines for appraisals and title work, and factory backlogs for modular and manufactured homes due to increased demand and occasional labor shortages as a result of the pandemic. F&M Mortgage is committed to keeping you informed and providing proper expectations during the approval process. We work diligently to keep you moving forward as quickly as possible.


Questions for An Advisor

Veronica Amato, Mortgage Advisor

When in the process is a down payment required for a construction loan?

When the construction loan is closed, your down payment is required, unless the land has enough equity to be accounted for down payment.


At what point should I consider a construction loan during my home search?

When your realtor recommends that what you are looking for is not going to be available.

Contact F&M Mortgage

F&M Mortgage works with builders and home buyers directly to ensure a seamless and user-friendly construction loan process, helping you and your clients build dreams into reality. From Harrisonburg to Staunton and across Augusta, Page, Rockingham, and Shenandoah counties, F&M Mortgage and F&M Bank are your local home construction lenders, offering construction loans for as little as 5% down. Learn more or apply now for your new construction loan!

Flexible lending options from a team of local lenders familiar with your community make F&M Mortgage the ideal lender for your home loans. In-house decision making simplifies the process and competitive rates get you the most for your money. Get started now!

Are you a first-time home buyer? Check out our guide for Virginia!


6 Facts About VA Loans That You May Not Know

Are you thinking of buying a home? If you’re a veteran or active military personnel, you may be eligible for a VA loan. And the great news is, for those who qualify, VA loans offer some of the most enticing and flexible benefits available. Whether you’ve been researching this mortgage option for months or you are just getting started, here are 6 facts about VA loans that you may not know.

1. VA loans allow veterans to buy a home with little or no money down

VA loans require no down payment, making it easier for veterans to become homeowners.  Perhaps just as importantly, the VA limits what fees and costs veterans can pay at the time of closing (they will not pay an “underwriting” lender fee for example). For other allowable closing costs like title insurance or appraisal fees, the veteran homebuyer can ask the sellers to pay all of their closing costs totaling up to a maximum of 4 percent of the purchase price. This can even include things like prepaid taxes and insurance, collections, and judgments. – Choice One Mortgage

2. Closing costs for VA loans are lower compared to other mortgage types

As mentioned above, one of the biggest benefits of a VA loan is that the VA limits the amount veterans have to pay in closing costs. Some financial institutions even offer closing cost reductions for qualified applicants. – F&M Bank

3. You can still get a VA loan while serving overseas

One of the more interesting facts about VA loans is that military members serving overseas can grant power of attorney (POA) to a spouse or someone else to sign the loan documentation for them. There is a 60-day occupancy rule, but only a spouse can satisfy that. Otherwise, an extension of up to 12 months is granted to the borrower. – Park Place Finance

4. If you have full entitlement, you won’t have a home loan limit

If the veteran has full entitlement, there is technically no limit on the loan amount and there will be no down payment required. It is important to note that if you do not have full entitlement (either through compromise or another VA loan) then the “old school” rules apply and down payments will potentially be required based on the loan amount. – Jennifer Guidry

5. VA loans do not require private mortgage insurance

Private mortgage insurance is required on all other mortgages when the borrower does not provide 20 percent of the sales price in the form of a down payment. This is an additional cost that VA home buyers do not incur in their monthly mortgage payments – Dylan Langei Home Loans

6. There are a variety of VA loan products available

From purchase, refinance, and home construction options to financing for manufactured homes (including singlewides), there are a wide variety of VA loan products to choose from. The VA even offers a streamlined refinance product (called an IRRRL), which provides a fast refinance from one VA loan to another, lowering monthly payments. Additionally, under this “IRRRL” program, some lenders do not require an appraisal, income, or credit check. – eLEND

Originally published by Redfin

6 Tips for Saving for Your Down Payment

Before you can make the transition from renting to owning your home, you might need to have a substantial down payment, typically 5 to 20 percent of the home’s value. The American Bankers Association suggests the following tips to help save for it:

Develop a Budget & Timeline

Start by determining how much you’ll need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you’ll be ready to transition from renter to homeowner.

Planning ahead, it’s a good idea to play with numbers and calculate what your estimated monthly payment might be. F&M Mortgage offers a Mortgage Loan Calculator that helps simplify the budgeting process.

Establish a Separate Savings Account

Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you’ll be less likely to tap into it when you’re tight on cash.

Shop Around to Reduce Major Monthly Expenses

It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.

Monitor Your Spending

With online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings.

Look Into State and Local Home-Buying Programs

Many states, counties and local governments operate programs for first-time homebuyers. Some programs offer housing discounts, while others provide down payment loans or grants.

Eligible first-time homebuyers may qualify for one of the many low to no down payment loan options through VHDA. Additionally, ideal for first-time home buyers, and open to all qualified borrowers, F&M Mortgage offers a no-PMI mortgage without income limits. If you’re looking for a no down payment mortgage, F&M’s Spark Loan might be perfect for you.

Celebrate Savings Milestones

Saving enough for a down payment can be daunting. To avoid getting discouraged, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000 total, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process.

Contact F&M Mortgage

Flexible lending options from a team of local lenders familiar with your community make F&M Mortgage the ideal lender for your home loans. In-house decision making simplifies the process and competitive rates get you the most for your money. Get started now!

Are you a first-time home buyer? Check out our guide for Virginia!

First Time Home Buyers Guide For Virginia

Homeownership is woven into the fabric of the American dream, but the process can seem daunting to first-time homebuyers. As your community bank and mortgage lender, F&M Bank and F&M Mortgage are here to help. In this comprehensive guide we break down everything you need to know about buying your first home in Virginia, from costs to mortgage loan options and the major steps in the process. If you have questions as you read, feel free to reach out to our friendly and experienced team of mortgage lenders. We’re here to help!

How Much Does It Cost To Buy and Own a Home In Virginia?

The median home price in Harrisonburg, VA us $203,700, which is lower than the median home price for the state of Virginia at $269,900.

Real estate has always been a local business, and this is especially true in Virginia, where home costs vary widely depending on the region and metro area. Here in the Shenandoah Valley, the median home price for Harrisonburg is $203,700. Your down payment will depend on the type of home loan you apply for. At F&M Mortgage, we offer everything from no-down-payment mortgage loans to low-down-payment options and conventional mortgages with a 10-20 percent down payment. In general, the more you can put down, the lower your monthly payment will be. For most home loans, you’ll need to pay Private Mortgage Insurance premiums each month if you put less than 20 percent down. However, there are plenty of options for aspiring homeowners who can’t come up with a big down payment.

Closing costs are the second expense associated with buying a home. These vary as well, but in general, you can expect to pay between $4,000-$9,000. Your lender will share a breakdown of closing costs with you beforehand so you know how much you need. If you have concerns about coming up with both a down payment and closing costs, don’t worry. We’ll cover closing cost assistance programs below.

Once you’ve bought your home, your biggest expense will be your monthly mortgage payment, which encompasses the loan payment of principal and interest, as well as your property tax and home insurance premium. To continue with our Harrisonburg example, the real estate tax rate is .86 cents per hundred of assessed value. This works out to fairly low property taxes; for example, if you need to pay $1,253 in annual real estate taxes, this is only about an extra $100 each month added to your mortgage payment. Remember that the assessed value of your home is usually less than what you bought it for. When it comes to home insurance premiums, you can expect to pay about $35 per month per $100,000 of home value.

Now that you understand the basic costs of buying and owning a home, it may be more affordable than you thought. Let’s look at federal and state programs to help first-time buyers obtain home loans and down payment or closing cost assistance. 

Federal Programs for First Time Buyers

First time home buyers have access to state programs, tax breaks, and federally backed loans if they don't have the usual minimum down payment ideally 20% of the purchase for a conventional loan.

Since 1934, when the Federal Housing Administration (FHA) was created to help Americans obtain home financing in the aftermath of the Great Depression, the federal government has launched a variety of initiatives to make homeownership more accessible. 

Within the context of federal home loan programs, a first-time buyer doesn’t necessarily have to be someone who has never owned a home before. We’ll cover the eligibility requirements for each program below. As you’ll see when we get to Virginia programs for first-time buyers, there are instances where federal and state home loans and home buying assistance work in tandem. 

FHA Loans
This is the original federal home loan program and it is open to anyone who meets the eligibility requirements. An FHA mortgage is a great option if you’re looking for a low-down-payment home loan. Depending on your FICO credit score, you may qualify for the maximum 96.5 percent financing, meaning you’d only need to make a 3.5 percent down payment. For our $203,700 median home price, 3.5 percent would be $7,130. That’s much easier to save for than a full 20 percent down payment of $40,000. 

Benefits of an FHA Mortgage Loan

  • Flexible credit approval
  • Low down payment 
  • Low closing costs 
  • Available for 1-4 unit properties
  • Can be used for manufactured and modular homes

FHA Loans and Mortgage Insurance
FHA loans are great for homebuyers who can’t afford a larger down payment or whose credit score might disqualify them from obtaining a conventional loan. In return for this flexibility, FHA borrowers pay an upfront mortgage insurance premium of 1.75 percent of the loan amount. You’ll also pay an annual mortgage insurance premium of 0.45 percent to 1.05 percent, divided by 12 and paid each month as part of your mortgage payment. The FHA mortgage insurance premium is for the life of your loan unless you refinance into a conventional mortgage.

VA Loans
Established in 1944 with the GI Bill of Rights, VA loans are available to current service members, veterans, and certain surviving spouses. The VA home loan program is very generous, with up to 100 percent financing, no mortgage insurance premiums, and low closing costs. The only added cost is a VA fee of 1.25 percent to 2.4 percent of the home’s value.

Benefits of a VA Mortgage Loan

  • Low or no down payment
  • No mortgage insurance requirement
  • Low closing costs

To learn more about VA loans, check out our comprehensive guide.

USDA Loans
USDA mortgages fall under the US Department of Agriculture and are intended to encourage home purchases in rural and semi-rural areas. Depending on your credit score, you may not have to make a down payment on a USDA loan. USDA loan eligibility is also based on your household income, which can’t be more than 115 percent of the median income in your county. USDA borrowers must also first try and fail to obtain a conventional mortgage.

Benefits of a USDA Loan

  • No or low down payment
  • Flexible credit approval
  • Some suburban areas count as “semi-rural”

HUD’s Good Neighbor Next Door Program
If you are a law enforcement officer, primary school teacher, firefighter, or EMT, you may be eligible to purchase a single-family home in a designated revitalization area at a 50 percent discount off the list price. As long as you live in the property for at least three years, you won’t have to pay back the 50 percent discount. You can also sell the house for its full market value and keep the profit. Search for current listings here

Fannie Mae HomeReady
Designed for creditworthy low-income borrowers, the HomeReady mortgage permits down payments as low as 3 percent. Also, your down payment and closing cost money can come from a variety of sources, including grants. There is no minimum requirement for personal funds. And while you’ll need to pay for Private Mortgage Insurance (PMI), you can cancel it once you have at least 20 percent equity in the home. 

Freddie Mac Home Possible Loan
Like the HomeReady mortgage, the Freddie Mac Home Possible Loan offers a down payment as low as 3 percent. You also have flexibility with the sources of your down payment and closing cost funds. Home Possible borrowers can even have a co-borrower on the loan who doesn’t live in the same residence. Overall, the Home Possible mortgage is great for self-employed individuals as well as those working in the gig economy. 

Virginia-Specific Programs for First Time Home Buyers

VDHA loans require that the home must be your primary residence, to have a credit score of at least 620, and complete a homeownership education course.

The Virginia Housing Development Authority (VHDA) offers 30-year fixed-rate mortgages, forgivable down payment grants, and federal tax breaks to first-time homebuyers in the state. In this case, the first-time buyer simply means that you haven’t owned part or all of another house in the past three years. 

VHDA loans come with income and purchase price limits that are set by county. To qualify, you need a minimum 620 credit score, must be willing to make the house your primary residence and have to finish a homeownership education course first. 

VHDA Fannie Mae HFA Preferred No MI
This mortgage loan offers a low down payment of 3 percent and there is no mortgage insurance requirement. You can also use a VHDA Down Payment Assistance grant and Mortgage Credit Certificate to reduce the cash you need to pay upfront. 

“The VHDA has struck a special deal with Fannie Mae with this program, which is designed for first-time and repeat homebuyers with a credit score of at least 640. Down payment requirements start at just 3 percent. The affordable monthly payment and discounted upfront cost is great, but it’s the insurance benefit that really shines.”

VHDA FHA Plus Loan
If you’re interested in a standard FHA loan, but don’t have enough cash for the down payment, the VHDA FHA Plus Loan might be the best option for you. Obtain up to 100 percent financing with a second mortgage that covers your upfront closing costs and down payment. County income limits apply and the combined loan total cannot exceed VHDA’s home price limits.

VHDA Rural Housing Services (RHS)
This is the VHDA’s version of a USDA mortgage. If you wish to buy a single-family house in a qualified area, you can take advantage of 100 percent financing, low mortgage insurance premiums, and a discount on your federal tax bill. 

VHDA Down Payment Assistance Grant
This grant can be used in combination with a variety of mortgage loans. Get up to 2.5 percent of your home’s value to put toward your down payment. Qualified home buyers don’t have to repay the down payment assistance grant. 

VHDA Mortgage Credit Certificate
If you qualify for the VHDA’s down payment assistance grant, you can also file for the Mortgage Credit Certificate, which lets you claim 20 percent of your annual mortgage interest as a federal tax credit for the life of the loan. 

From Pre-Qualification to Closing: Understanding the Homebuying Process

Closing costs are an assortment of feeds that are paid by both buyers and sellers at the close of a real estate transaction.

One of the most important decisions you’ll make at the beginning of this process is finding the best lender. You want to look for local expertise, a long history of mortgage lending, and friendly service. This will help ensure a smooth and timely mortgage and home buying process. As a local lender serving the Shenandoah Valley, F&M Mortgage has been helping first-time buyers become homeowners since 1999. We offer a complete suite of conventional, VHDA, VA, USDA, FHA, and zero-down-payment Spark Loans.

  • Get pre-qualified for a home loan. Pre-qualification letters carry more weight with sellers than pre-approvals. They demonstrate the seriousness of your intentions and vouch for your ability to get a mortgage.
  • Find a buyer’s agent to help in your home search. As with mortgage lenders, we recommend looking for someone with experience in the local real estate market and a specialization in working with buyers.
  • Fall in love with a house and make an offer. Once your offer is accepted, you will be “under contract” with the seller. Your mortgage lender will appraise the house and work through the underwriting process. You may be asked to provide additional documentation during this stage.
  • Get a home inspection. While this isn’t a requirement, it’s highly recommended. Paying for a home inspection will give you a complete and thorough report on the condition of just about everything in your house. If repairs are needed, you can renegotiate the purchase price with the seller.
  • Go to closing. The entire process can take anywhere from 4-6 weeks between the contract and the closing. Once the big day arrives, you can expect to sign a lot of paperwork and walk away with the keys to your new home. Congratulations!

Learn more about buying a home in the Shenandoah Valley!

Meet our experienced team of mortgage lenders and give us a call at 540-442-8583 to get answers to all of your home buying questions. Ready to apply for a mortgage loan? You can apply online or in any of our branch locations. Looking for more information about the Shenandoah Valley region of Virginia? Check out our relocation guides for Staunton and Augusta County and Harrisonburg and Rockingham County

A Comprehensive Guide to VA Loans

Are you a veteran, service member, or surviving spouse? Perhaps you’ve heard that the VA can help you get a mortgage loan, but you’re not sure where to start. As a longtime community bank serving the residents and military veterans of the Shenandoah Valley, F&M Bank created this education guide to VA Loans to help you understand what they are, how to apply, and what the process looks like. You can also visit our VA Mortgage Loans page.

What is a VA Loan?

The VA Home Loan Benefit offers eligible homebuyers more favorable terms on a mortgage from a bank or other private lender. You must use your VA loan for a primary residence. The VA guarantees a portion of the loan against loss.

VA Home Loan Types

There are 3 types of VA-guaranteed home loans:

  • Purchase Loan: Helps you buy a new home at competitive interest rates.
  • Streamline Refinance: Obtain a lower interest rate.
  • Cash-Out Refinance: Access your home equity to pay off debt or finance a major expense like college or home renovations.

Who is Eligible?

VA loans require a certificate of eligibility (COE)

To be eligible for a VA loan, you must meet credit and income requirements and receive a Certificate of Eligibility (COE). Eligibility extends to servicemembers and veterans, spouses, and certain beneficiaries. Browse the list below to see if you might qualify:

  • Veterans of WWII and the Korean or Vietnam Wars.
  • Gulf War service
  • Service during peacetime
  • Separated from service (other than dishonorable discharge)
  • Active-duty service personnel
  • Selected Reserve or National Guard
  • Un-remarried spouses of veterans who died while in service or from a service-connected disability.
  • Spouses of missing in action or prisoner of war servicemembers
  • Surviving spouses who receive Dependency and Indemnity Compensation (DIC) benefits.
  • Certain U.S. citizens who served in the armed forces of a government allied with the U.S. during WWII.
  • Service members of certain organizations, such as Public Health Service officers, cadets at the U.S. Military, Air Force, or Coast Guard Academy, midshipmen at the U.S. Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with World War II service, and others.

You can find the complete VA Loan eligibility requirements here.

What are the Benefits of VA Loans?

Since 1944, VA has backed over 24 million VA home loans

The VA Home Loan program is designed to help eligible veterans and service members achieve the dream of homeownership. With an experienced VA loan lender like F&M Bank, you can move through the process in a smooth and efficient manner. Here are the primary benefits of applying for a VA loan:

  • You don’t need to make a down payment unless:
    • The lender requires it.
    • The purchase price is greater than the property’s appraised value.
  • Unlike other mortgages with less than 20 percent down, Private Mortgage Insurance (PMI) is not required for a VA Loan.
  • Rates may be lower.
  • Limited closing costs
  • You can use a seller’s assist (when the seller pays some or all of the closing costs).
  • There are no penalty fees for paying the loan off early.
  • If you have trouble making loan payments, the VA may be able to help.
  • You don’t have to be a first-time home buyer to qualify for a VA Loan.
  • The VA Loan benefit can be re-used (more on that later).
  • VA-guaranteed home loans are assumable.
  • Disabled veterans are exempt from the one-time VA funding fee.

What does the process look like?

VA loans are fast and easy to process.

Here’s what you can expect to do during the VA loan application process.

  1. Determine your eligibility.
  2. Apply for a Certificate of Eligibility (COE) through the eBenefits portal. Your lender can also request a COE for you.
  3. Select a VA-approved lender to originate your VA home loan.
  4. Review the loan origination fee, if applicable. Some lenders charge a one percent flat fee to cover the costs associated with your VA loan, such as the appraisal and inspection, recording fees, your credit report, prepaid items, hazard insurance, flood zone determination, survey, title examination and insurance, special mailing fees, VA funding fee, and the Mortgage Electronic Registration System.
  5. Consider how you will cover closing costs. As mentioned above, you can submit an offer on a home that has the seller paying the closing costs.
  6. Take a home buyer education workshop. This isn’t a mandatory step, but it can be very helpful, especially for first-time homeowners. Here in Virginia, the Department of Housing and Community Development facilitates free events and webinars.
  7. Find a real estate agent to act as a buyer’s agent for you and start the home browsing process. If you need recommendations, our friendly and Shenandoah Valley-based employees can help you find local real estate agencies to work with.
  8. Once you find a house you love and make an offer, be sure to include a “VA Option Clause” in your contract (which your real estate agent will draw up for you). This contingency, along with clauses for the VA appraisal and home inspection, protects you against contractural obligation in the event that your VA financing doesn’t come through.
  9. If the VA-appraised value is not enough to cover the purchase price of the home, you can request a Reconsideration of Value (ROV), try to renegotiate the sale price, or pay the difference at closing with your own funds.
  10. The process ends with closing, where you sign the loan and title paperwork and collect the keys to your new home. Congratulations!

Where can you get a VA loan in the Shenandoah Valley?

Staunton, VA

To obtain a VA loan in the Shenandoah Valley (or anywhere else in the country), you must find a lender that is approved by the U.S. Department of Veterans Affairs to originate VA mortgages. Of course, that only narrows your options somewhat. Ultimately, you want to choose a VA-approved lender with extensive VA loan experience in Virginia.

For example, F&M Mortgage has been offering full-service home mortgages to the Shenandoah Valley and beyond since 1999. With offices in Woodstock, Harrisonburg and Staunton, Va, our Mortgage Advisors also have expertise with other government-insured loan programs like FHA. We can help you evaluate all of your options to ensure the VA loan is the best fit. Then we’ll put our experience to work for you to get you to closing as soon as possible.

F&M bank is proud to serve veterans across the Shenandoah Valley as an approved VA home loan lender.

VA Loan Limits in the Shenandoah Valley by County

 VA loan limits reflect the maximum qualified veterans with full entitlement can borrow without making a downpayment. Limits vary by county due to varied real estate markets. You can view the complete list of counties and loan limits here. Below, we’ve listed the loan limits for each Shenandoah Valley county we serve.

  • Rockingham County: $484,350
  • Shenandoah County: $484,350
  • Page County: $484,350
  • Augusta County: $484,350
  • City of Harrisonburg: $484,350
  • City of Staunton: $484,350

Closing Cost Assistance for VA Loans in Virginia

 In 2018, the Virginia Housing Development Authority (VHDA) launched its Closing Cost Assistance (CCA) Grant program. Receive up to 2 percent of either the purchase price or appraised value (whichever is less) of your home. The CCA grant is for first mortgage loans only and must be used for closing costs, including the VA Funding fee. Talk to your lender about reserving grant funds for your VA mortgage loan.

How does the VA Loan Compare to Other Home Loan Types?

  • No down payment: Only VA and USDA loans offer 100 percent financing. You may be able to make a low down payment on a conventional mortgage, FHA loan, or VHDA loan, but you will pay private mortgage insurance (PMI) until you have 20 percent equity in your home (FHA loans require mortgage insurance for the life of the loan).
  • No mortgage insurance requirement: As mentioned above, FHA borrowers will pay mortgage insurance through the life of the loan. Conventional borrowers must pay it until they reach 20 percent equity. Even USDA loans have (albeit low) mortgage insurance. Only the VA loan waives the PMI requirement for borrowers.
  • Conforming Loan Limits: VA loans have the same limits as other types of mortgages. The conforming loan limit is set by Fanny Mae/Freddie Mac. If you want to borrow more you’d need a jumbo loan.
  • Home Inspection: Government-backed loans like the VA and FHA programs have quality standards that a home must meet to qualify for financing. With conventional mortgages, a home inspection is not required by the lender. However, it is always recommended that buyers schedule a private home inspection before closing to uncover any potential issues.
  • Appraisal: Lenders always appraise the home before approving a mortgage. This is true regardless of the loan program you choose. It is usually difficult or impossible to borrow more than a house’s appraised value.

VA celebrated the 75th anniversary of the original GI bill, which created the VA Home Loan Benefit

What can VA Loans be used for?

VA Home Loans can be used for purchasing a primary residence, purchasing and making improvements to an existing house, financing the construction of a new home, or refinancing an existing loan. Eligible properties and uses include:

  • Existing single-family homes and condominiums
  • New construction
  • Simultaneously purchase and improve
  • Refinance an existing non-VA loan
  • Refinance an existing VA loan to reduce the interest rate
  • Manufactured homes and lots
  • Energy-efficient improvements

VA loans cannot be used to purchase an investment property, finance a business, buy farmland without a residence, buy property abroad, or purchase a vacation home. Recreational vehicles (RVs) and boats are also ineligible.

Surviving spouses who remarry before age 57, as well as divorced spouses, lose their VA loan eligibility.

Restoration of Entitlement

 You can use your VA loan benefit again as long as your prior VA loan has been paid in full (and the property sold). You can re-use your benefit just once if you pay off your first VA loan but do not sell the associated home. You can also find a qualified Veteran-transferee to buy your home and assume your VA loan by substituting their entitlement for yours.

F&M Mortgage is your local VA loan lender in the Shenandoah Valley

Shenandoah Valley's VA Loan Lender

F&M Mortgage, a division of F&M Bank, has been helping Virginia’s military veterans and their families become homeowners since the VA home loan program was introduced. Our Mortgage Advisors pride themselves on offering friendly, personalized service with local expertise.

Ready to apply for a VA loan? Use our online mortgage application or apply in person at your nearest F&M Bank office. We have locations across the Valley, including dedicated mortgage offices in Harrisonburg, Staunton, and Woodstock, VA. Have questions about choosing the right mortgage loan for you? Give us a call today!

Check out our Loans for Local Heroes Home Loan Program, which provides up to $500 off your closing costs, and visit our VA Mortgage Loans page.

Get up to $500 off at closing with our Loans for Local Heroes Home Loan Program