Pensacola Housing Incentive Program
This program provides up to $15,000 in down payment and closing cost assistance in the form of a forgivable loan. Typically, these loans arent repaid as long as you abide by the terms of the program. These funds are reserved for low- to moderate-income families. The home must be located within Pensacola, and purchase price limits apply.
State Housing Initiatives Partnership
Florida Housing runs the SHIP program, which provides funds to local governments organizing their own affordable housing programs. Many of the city-led programs listed below are funded via SHIP.
You can read more about the SHIP program, and locate a local office on its official Florida Housing website.
Usda / Rural Development Loans
- Provides up to 102% financing in participating Florida Counties
- Buyer does not need to be 1st time Home Buyer.
- Minimum middle FICO 5-4-2 score is 640 or whatever AUS will approve.
- Seller can contribute up to 6% towards Closing Costs.
- Buyers cannot have more than $15,000 in non-retirement liquid assets. Excess of $15,000 must be used as down payment.
- Borrower must have three active trade lines, no alternative credit.
- Higher Income limits than typical state or county programs.
- Maximum purchase price of FHA limits in area purchased.
- Lender credit available.
- No Prepayment Penalty Fee if loan is paid out early.
- Seller can contribute up to 6% towards Buyers Closing Costs.
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Florida Homebuyer Loan Program Basics
The Florida state legislature created financial programs such as Florida Housing to assist eligible first-time homebuyers. The state doesnt approve loans or hand out money. Instead, Florida works with participating lenders to offer homebuyers Federal Housing Administration, Department of Veterans Affairs, Department of Agriculture, and Fannie Mae and Freddie Mac loans with 30-year fixed-rate first mortgage loans.
Once approved for one of these loans, eligible borrowers can reap even more financial help with Florida Housing down payment and closing cost assistance programs .
And heres the icing on the cake: Florida Housing never runs out of funds, so you dont have to worry about competing with other borrowers for limited money.
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Which Loan Is Best For First
Most first-time home buyers use 30-year fixed-rate mortgages backed by Fannie Mae or Freddie Mac to purchase their first home, but that doesnt make the 30-year fixed the best loan for first-time buyers. Mortgages are not one-size-fits-all. Get pre-approved and let your lender advise you on which mortgage loan is best for you.
Read more of our other first-time home buyer tips.
Statewide Homeownership Assistance Programs
The Florida Housing Finance Corporation has a series of statewide assistance programs that are worth exploring for first-time homeowners. The organization was founded four decades ago, with the specific aim to help with creating affordable housing opportunities for low-income families.
While the programs differ, the overarching requirements include being a resident of Florida, a first-time homebuyer, working with a participating lender, and purchasing eligible property types which must be used as a primary residence. These programs are available across all 67 counties. Across the board, homebuyers will need to complete a homebuyers education course.
Heres a detailed list of each program.
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Federal Housing Administration Loans
The FHA, which is part of HUD, insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers with FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.
Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.
FFHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years.
You can learn more about FHA loans in general and FHA lending limits by area.
Who Qualifies As A First
For a quick clarification, a first-time homebuyer is defined as any family or individual who has either never owned a home or at least not in the past three years, depending on the region. Some local programs, for example, suggest residents of Florida are still eligible if they havent owned a home in the past three years.
As always, when youre doing your research, read the fine print. Also refer to limitations listed below.
And heres some good news: most of the local programs arent restricted to first-time homebuyers! The emphasis is on helping low-income families across Florida with the largest purchase of their lives.
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Florida Housing Mortgage Programs
Completing the pre-qualification and pre-approval process with lenders will reveal much about your financial status and will properly lay the groundwork for the type of mortgage that best fits your budget and financial goals. Those processes might also point you to some government assistance programs that may be available to you, depending on your income or other credentials.
There are several options in the state for finding the loan that best works for you and your budget. As a first-time home buyer in Florida, you can get an HFA Conventional Loan over 30 years an HFA Preferred 3% Plus Conventional, which is a grant, so it doesnt have to be repaid an HFA Preferred Grant that requires a down payment and closing costs or a Mortgage Credit Certificate Program which allows the first-time homebuyer to claim an income tax credit on a certain percentage of the mortgage interest. There is also a Salute Our Soldiers Military Loan Program that allows active-duty military personnel and veterans to take advantage of several programs that help with 30-year fixed-rate mortgages.
Read on for more detailed information about each loan option.
Applying For A Mortgage In Florida
If you arent prequalified for a mortgage, you have 90 days to apply after submitting your final offer.
The process of applying for a mortgage is not nearly as daunting as it used to be thanks to the mortgage industry becoming increasingly automated. For most people, getting approved is the most challenging aspect. To facilitate the process, youll want to connect with a highly regarded mortgage broker. They will expertly guide you through the mortgage application process and act as an official liaison between you and lenders. Although its possible to work directly with your bank to apply for a home loan, a mortgage broker will have access to a large network of lenders, which enables them to identify favorable mortgage terms for you.
The underwriter approval process is similar to the mortgage prequalification process. An underwriter will review your application to determine your ability to repay your debt based on factors such as credit score, credit history, employment history, income stability, debt-to-income ratio and assets.
Based on their findings, the underwriter will either approve, deny or suspend your application. If approved, your next step would be to get a home appraisal. If suspended, the underwriter likely needs more information before they can proceed. If denied, dont fret the underwriter will clearly explain why your application was rejected, so you can work with your mortgage broker to resolve any issues and apply again.
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Where To Find Home Buying Help In Florida
If youre using a home buyer assistance program, youll choose from a list of participating lenders. Your mortgage lender will then assign a loan officer who will help you through the rest of the transaction.
Just because you initially choose an approved lender, that doesnt mean you must stick with it. You should still shop around for your best mortgage rate and overall deal, as doing so could save you thousands. If youre not using a down payment assistance program, youre free to pick from any mortgage lender you want. Compare at least 3-5 lenders quotes to find the best deal.
All of the organizations weve listed above should provide advice freely to any first-time home buyer in the state of Florida. In addition to our selection, the U.S. Department of Housing and Urban Development provides a list of city- and county-specific programs across Florida. These are as follows:
FL first-time home buyer resources by county
Florida Hfa Preferred Conventional Loan Program
|Best For||First-time home buyers looking to save on insurance|
The Florida Housing Finance Corporation HFA Preferred Conventional Loan is a 30-year fixed-rate mortgage that is great for anyone in need of cheaper private mortgage insurance for their new home. In theory, this will leave you more financial room to take care of other fees, such as closing costs.
Although there is no direct down payment aid, you may qualify for the Florida Assist Loan. However, to get the Preferred Conventional Loan, it must be utilized as a first mortgage on a home.
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The Florida Homeownership Loan Program Second Mortgage
This program also offers up to $10,000, but comes with a 3% interest rate and youll make monthly payments in addition to your monthly mortgage payment. Youll need to pay it off within 15 years. Because of this, it counts towards your debt-to-income ratio as youre going through the home underwriting process.
Florida Mortgage Credit Certificate Program
The Mortgage Credit Certificate program allows the first-time homebuyer to claim 10%-50% of their mortgage interest up to $2,000 for as long as they live in the home. The balance can still be claimed as mortgage income tax credit. The credit applies to first-time homebuyers as well as veterans buying a home.
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What To Know About Different Types Of Down Payment Assistance
Most mortgage programs for first-time homebuyers require you to put money down to buy a home, often 3% or 3.5% at a minimum. Down payment assistance can help you cover this cost if you dont have much money saved up. Down payment assistance typically comes in one of a few different forms.
- Grant. Grants may be offered at a certain percentage of the mortgage amount. This money does not need to be repaid.
- Second mortgage. Unlike a grant, a second mortgage typically does need to be repaid. Generally, second mortgages for down payment assistance have interest rates and terms set by the organization issuing them and are paid back with monthly payments.
- Deferred loan. Also known as soft seconds, deferred loans can include down payment assistance loans that do not need to be paid back until the homeowner sells the property or refinances.
- Forgivable loan. Some deferred loans, including second mortgage loans, may also be forgivable. This means that the loan amount is written off over time until you no longer have to repay the loan.
Fhfc Florida First Government Loan Program
The Florida First loan program is a government-backed first mortgage loan. Qualified homebuyers can secure a 30-year, fixed rate mortgage loan. This is a popular route for first-time homebuyers youll pay back the loan for your house over the course of 30 years with an interest rate and monthly payment that doesnt change.
If youre a veteran, you dont have to be a first-time homebuyer to qualify.
Read more about the Florida First program.
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Florida Assist Second Mortgage
This program offers up to $10,000 for down payment and closing costs via a 0% interest deferred second mortgage to be used only with a Florida Housing first mortgage.
The second loan is not forgivable, but repayment is deferred until the home is sold, the borrower moves, or the first mortgage is refinanced. Borrowers must meet the same requirements as they do for the Florida First mortgage.
Home Price Trends In Floridas Major Areas
Higher home prices translate into larger mortgages and higher monthly payments. In most of the state of Florida, the median home price falls between $150,000 and $300,000, according to data from the National Association of Realtors. However, in counties in the Miami area, prices are significantly higher reaching a high of $661,995 in Monroe County, which includes the Florida Keys. Thats up 10.4% year over year and translates to a monthly mortgage payment of $2,474 in the second quarter of 2021 as compared to $2,307 in the second quarter of 2020.
In most parts of the state, prices have risen 10% or more over the past year. In Miami-Dade County, the median home price is $380,443. This translates to a monthly mortgage payment of $1,444, up from $1,347. In Broward County, which includes Fort Lauderdale, the median home price is $345,795, which translates to a monthly mortgage payment of $1,312, up from $1,224 year over year.
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Florida Homeownership Loan Program
This program gives buyers up to $10,000 in assistance as a second mortgage at 3 percent interest. The mortgage must be paid off over 15 years unless you move, refinance, sell or transfer ownership of the property. In those cases, the balance must be paid in full.
Note: These programs must be used with a Florida Housing loan program.
Federal Programs For First
Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who havent owned a home in several years.
The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.
If you qualify for one of these loans through Florida Housing, thats advantageous. If not, you can apply for them on your own. Notice that the credit score requirement could be higher with Florida Housing.
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City Of Tampa Down Payment Assistance
- Provides up to $15,000 in the form of a 0% Interest 5 Year Forgivable second mortgage loan.
- Deferred Monthly payment on up to $15,000 as long as the Owner remains in the home and is their Primary Residence. There are no payments on the second mortgage unless the Owner moves, Refinances, leases or defaults on the property within 5 years.
- At the end of 5 years, the second mortgage is forgiven.
- Buyer must contribute at least $2000 towards Closing Costs.
- Primary Residences only.
- No Lender credit available.
- Potential Buyers must begin process with one of four approved Housing Counseling Agencies and MUST NOT be under contract before they begin the process.
- Total $14,999 max award. Down Payment up to 20% of the purchase price or $10,000 whichever is less, toward down payment. 50% of Closing Costs or $4999, whichever is less.
- Maximum purchase price not to exceed $226,926.
- Income must be at or under 140% of the HUD Median Income.
- Income calculated from Household Income.
- Debt ratios not to exceed 33/41%.
- No Bankruptcies in last 2 years and no foreclosure last 3 years.
- Minimum middle credit FICO score 600
- Can be used with Conventional, FHA, VA loans.
- ARM’s are not permitted.
- No Prepayment Penalty Fee if loan is paid out early.
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Grants For First Time Home Buyers In Florida
As a result of applying for and receiving real estate grant funds, you could obtain thousands of dollars in free grant money that you may never have to pay back. These funds would help you make your down payment or supplement your mortgage.
|USDA Good Neighbor Next Door Program||The Good Neighbor Next Door program provides qualified first time home buyers who are law enforcement officers, firefighters, emergency medical technicians or teachers with discounted homes.||
|HUD Dollar Homes||Low-to-moderate income families may be able to purchase a vacant home that was foreclosed on for just $1.00 via the HUD Dollar Homes program.||
|National Homebuyers Fund, Inc.||Down Payment Assistance programs are intended for home buyers who can afford monthly payments, but dont have the funds needed to meet the Federal Housing Administrations 3.5 percent down payment requirement.||