Home financing in Franklin County.

Home financing — commonly called a mortgage — is a loan that lets you buy a home without paying the full purchase price upfront.

You borrow money from a lender, move into the home, and repay the loan in monthly installments over a set number of years, typically 15 or 30.

The home itself serves as collateral, meaning the lender can reclaim it if payments are not made.

There are several types of home loans you may encounter in Franklin County:

• **Conventional loans** — standard loans not backed by the government, usually requiring good credit and a down payment of 3–20%.

• **FHA loans** — backed by the Federal Housing Administration, allowing credit scores as low as 580 and down payments as low as 3.5%. Popular with first-time buyers.

• **USDA Rural Development loans** — because much of Franklin County is classified as rural, many properties here qualify for USDA loans, which can offer zero down payment for eligible buyers.

• **VA loans** — for eligible veterans and active military, offering competitive rates and no down payment requirement.

• **ITIN loans** — for buyers who do not have a Social Security number but do have an Individual Taxpayer Identification Number (ITIN). These are offered by select community lenders and credit unions.

The right loan type depends on your income, credit history, immigration status, and the property you want to buy. Local lenders who know Franklin County can help you figure out which path fits your situation.

Franklin County sits in the foothills of the Blue Ridge Mountains in southwestern Virginia.

Its economy blends manufacturing, agriculture, small business, and a growing lake-country tourism sector around Smith Mountain Lake.

Many residents work as solo contractors, skilled tradespeople, farm operators, or small business owners — income types that can look irregular on paper but are still financeable with the right lender.

**What lenders typically evaluate:**

• **Income** — Lenders want to see that you can repay the loan. If you're self-employed or a solo contractor, two years of tax returns (or two years of bank statements with some lenders) usually demonstrate stable income.

• **Credit score** — Conventional loans generally want 620 or higher. FHA loans can work with 580. ITIN and community lenders may evaluate your payment history differently, looking at rent, utilities, and remittances rather than a credit score alone.

• **Debt-to-income ratio (DTI)** — Most lenders prefer that your total monthly debt payments (including the new mortgage) stay below 43% of your gross monthly income.

• **Down payment** — This ranges from 0% (USDA, VA) to 3–3.5% (FHA, some conventional) to 10–20% (conventional without mortgage insurance).

• **Immigration status** — U.S. citizenship is NOT required. Permanent residents, certain visa holders, and ITIN holders can all qualify with the right lender. See Section 4 for local ITIN-friendly options.

**Franklin County-specific note:** Because a large portion of the county qualifies as a USDA-eligible rural area, the USDA Single Family Housing Guaranteed Loan Program is one of the most practical options for moderate-income buyers here. Check the USDA eligibility map for the specific address you are considering, as Smith Mountain Lake communities and the Town of Rocky Mount may have different designations.

Gathering your paperwork before you speak with a lender saves time and reduces stress. Here is what most home loan applications in Virginia require:

**For all applicants:**

- Government-issued photo ID (driver's license, passport, consular ID/matrícula consular)

- ITIN or Social Security number

- Two most recent years of federal tax returns (all pages and schedules)

- Two most recent years of W-2s or 1099s

- Two most recent months of bank statements (all pages)

- Recent pay stubs (last 30 days) — or profit-and-loss statement if self-employed

- Proof of any additional income (rental income, child support, etc.)

- Landlord contact information or 12–24 months of rental payment history if you currently rent

**For self-employed contractors and small business owners:**

- Business license or DBA registration

- Two years of business tax returns

- Year-to-date profit-and-loss statement, ideally prepared or reviewed by an accountant

- Business bank statements (last 2–3 months)

**For ITIN applicants:**

- ITIN card or IRS letter assigning your ITIN

- 12–24 months of bank statements (some lenders use these in place of traditional credit history)

- Proof of consistent bill payment (utility bills, insurance statements)

- Explanation letter for any large deposits

**For the property:**

- Signed purchase agreement (after you are under contract)

- Homeowner's insurance quote

- HOA documents if applicable

Tip: Ask your lender for a checklist specific to your loan type before you start gathering documents. Every loan is a little different.