Purchase Loan

Florida Down Payment Assistance

Florida Home Down Payment Assistance: A Guide for Prospective Homeowners

Purchasing a home is a significant milestone, but one of the biggest hurdles for many prospective homeowners is saving for a down payment. Fortunately, Florida offers a variety of down payment assistance programs to help make homeownership more accessible. In this blog, we will explore these programs and provide essential information to guide you through the process of securing down payment assistance.

Why Down Payment Assistance Matters

A down payment is typically a substantial upfront cost, often ranging from 3.5% to 20% of the home’s purchase price. For many, this can be a daunting barrier to homeownership. Down payment assistance programs can bridge this gap, making it easier for families and individuals to achieve their dream of owning a home.

Types of Down Payment Assistance Programs in Florida

1. Florida Housing Finance Corporation (FHFC)

The Florida Housing Finance Corporation offers several down payment assistance programs, including:

Florida Assist (FL Assist)
- Provides up to $10,000 as a deferred second mortgage.
- No monthly payments are required, and the loan is deferred, becoming due only if you sell, refinance, or transfer ownership of the home.
Florida Homeownership Loan Program (FL HLP) Second Mortgage
- Offers up to $10,000 in assistance.
- Requires monthly payments, with a low, fixed interest rate.

2. Local Government Programs

Many counties and cities in Florida offer their own down payment assistance programs. For example:

Miami-Dade County
- Offers up to $7,250 in assistance for first-time homebuyers.
Orange County
- Provides up to $30,000 in down payment and closing cost assistance.

3. Community Development Block Grant (CDBG)

Some local governments use federal Community Development Block Grant funds to provide down payment assistance. The availability and terms of these funds can vary, so it’s important to check with local housing authorities.

4. Non-Profit Organizations

Non-profit organizations, such as Habitat for Humanity and the Neighborhood Assistance Corporation of America (NACA), offer various programs to assist with down payments and closing costs. These organizations often provide additional resources such as financial education and homeownership counseling.

Florida Down Payment Assistance Eligibility Requirements

Eligibility for down payment assistance programs typically depends on several factors:

Income Limits: Many programs have income limits based on household size and the area median income (AMI).
First-Time Homebuyer Status: Some programs require you to be a first-time homebuyer, which is often defined as not having owned a home in the past three years.
Credit Score: A minimum credit score is often required, though this can vary by program.
Homebuyer Education: Completion of a homebuyer education course is frequently a prerequisite.

How to Apply

Research Programs: Start by researching the down payment assistance programs available in your area. The Florida Housing Finance Corporation’s website and your local government’s housing office are good places to begin.
Check Eligibility: Review the eligibility criteria for each program to determine which ones you qualify for.
Complete a Homebuyer Education Course: Many programs require you to complete a homebuyer education course. These courses provide valuable information about the homebuying process and financial management.
Gather Documentation: Be prepared to provide documentation such as income statements, tax returns, and credit reports.
Apply: Submit your application through the appropriate channels, which may include online forms, local housing offices, or non-profit organizations.
Work with a Lender: Partner with a mortgage lender who is familiar with down payment assistance programs. They can help you navigate the application process and ensure you meet all requirements.

Are you looking to buy a home?

Florida Housing offers a Homebuyer Program featuring 30-year fixed-rate first mortgage loans for first-time homebuyers through participating lenders and institutions across Florida. Eligible borrowers can also benefit from Florida Housing’s second mortgage programs, providing assistance with down payments and closing costs.

To qualify for the Homebuyer Loan Program, applicants must meet the following criteria:

A minimum credit score of 640.
Collaboration with an approved, participating program lender.
Completion of an “approved” homebuyer education course.
The purchase price must be within the county’s specified limits.
Income must be below the county’s specified limits.
Compliance with the IRS definition of a first-time homebuyer, meaning the applicant has not owned and occupied a primary residence in the past three years.

For more information and to get pre-approved contact us, as we will help you navigate the path.

Florida Housing provides down payment and closing cost assistance

Florida Housing provides down payment and closing cost assistance through second mortgage loans to help eligible homebuyers with these expenses. This assistance is only available when paired with Florida Housing’s first mortgage loan and cannot be used as standalone down payment assistance. The following Down Payment Assistance Programs are offered to eligible buyers:

The Florida Assist (FL Assist)
- Offers up to $10,000 for FHA, VA, USDA, and Conventional Loans.
- 0%, non-amortizing, deferred second mortgage.
- The FL Assist is not forgivable; repayment is deferred until the sale, transfer, satisfaction of the first mortgage, refinancing of the property, or if the borrower ceases to occupy the property, at which point the full amount becomes due.

The Florida Homeownership Loan Program (FL HLP) Second Mortgage
- Provides $10,000.
- 3% fully-amortizing, second mortgage with a 15-year term.
- Monthly payments are required. The unpaid principal balance is deferred until the sale, transfer of deed, satisfaction of the first mortgage, refinancing of the property, or if the borrower ceases to occupy the property as their primary residence, at which point the full amount becomes due. This monthly payment must be considered in the borrower’s debt-to-income (DTI) ratio during credit underwriting.

3%, 4%, and 5% HFA Preferred and HFA Advantage PLUS Second Mortgage
- Offers 3%, 4%, or 5% of the total loan amount in a forgivable second mortgage.
- This second mortgage is forgiven at 20% per year over a 5-year term when used with Florida Housing’s conventional HFA Preferred for TBA or HFA Advantage for TBA first mortgage products. The “PLUS” Second Mortgage is exclusively available with these conventional first mortgage products.

Florida Hometown Heroes Housing Program

The Florida Hometown Heroes Housing Program is designed to provide financial assistance to frontline community workers, including healthcare professionals, law enforcement officers, firefighters, educators, and active military personnel, among others. This program aims to support those who serve their communities by offering down payment and closing cost assistance, making homeownership more attainable. Eligible participants can benefit from competitive, fixed-rate first mortgage loans and receive aid in the form of a second mortgage loan. This initiative not only helps these essential workers achieve their dream of homeownership but also strengthens community ties by enabling them to live closer to their workplaces.

The Florida Hometown Heroes Housing Program aims to make homeownership affordable for eligible members of the community workforce. This program provides down payment and closing cost assistance to first-time, income-qualified homebuyers, enabling them to purchase a primary residence in the community where they work and serve. The Florida Hometown Heroes Loan Program offers a lower first mortgage interest rate and additional special benefits to those who have served and continue to serve their country.

Program Details:

Eligibility: Full-time workforce employed by a Florida-based employer.
Mortgage Benefits: Lower than market interest rates on FHA, VA, RD, Fannie Mae, or Freddie Mac first mortgages, reduced upfront fees, no origination points, or discount points.
Assistance Amount: Borrowers can receive up to 5% of the first mortgage loan amount (maximum of $35,000) for down payment and closing costs.
Loan Terms: Down payment and closing cost assistance is available as a 0%, non-amortizing, 30-year deferred second mortgage. This second mortgage becomes due in full upon the sale of the property, refinancing of the first mortgage, transfer of the deed, or if the homeowner no longer occupies the property as their primary residence. The Florida Hometown Heroes loan is not forgivable.

Conclusion

Down payment assistance programs in Florida can significantly ease the financial burden of purchasing a home, making homeownership more attainable for many individuals and families. By understanding the options available and taking the necessary steps to apply, you can move closer to achieving your dream of owning a home in the Sunshine State.

If you’re considering purchasing a home in Florida and need assistance with your down payment, don’t hesitate to reach out to local housing authorities, non-profit organizations, or experienced mortgage brokers like Florida Dream Home Loans for guidance and support.

Feel free to reach out with any questions or for more personalized advice on securing down payment assistance in Florida. Happy home hunting!

If you’re ready to explore your options and take the first step towards homeownership, contact us at Florida Dream Home Loans. Our team of experts is here to help you navigate the home buying process and find the best down payment assistance programs for your needs.

Ben Krieg

Ben, a bilingual individual fluent in both German and English, was born in Germany before embarking on a journey that led him to call Canada and later Florida his home. Driven by his dedication to finding solutions, Ben thrives on challenges and welcomes the opportunity to help individuals and families realize their dream of homeownership. With a genuine commitment to assisting the community, he's excited to extend his expertise in mortgage solutions. Whether you're a first-time homebuyer or undergoing a relocation to central Florida, Ben is enthusiastic about being your guide in finding the ideal path to homeownership. NMLS# 2505980