First-Time Homebuyer Programs in Florida

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First-Time HomebuyerThere aren’t many things in life as exciting as closing on your very first home! While you’ll certainly be excited and feel accomplished as a new home buyer, the process can also be intimidating and hard to navigate, not to mention expensive. Luckily, in the state of Florida, there are several ways first-time homebuyers can reduce the monthly payments, down payment, and closing costs on their mortgages, making homeownership easier than ever!

Florida hosts several programs that offer 30-year, fixed-rate mortgages for first-time homebuyers, collectively known as the Homebuyers Loan Programs. With one application to Florida’s state housing authority, Florida Housing Finance Corporation (FHFC), you can be considered for all available loan types within this program. These loans are backed by various federal agencies, including the FHA, VA, USDA, Fannie Mae, and Freddie Mac. There are a few requirements to receive one of these loans:

  • A credit score of at least 640
  • Completion of an approved homebuyer education program
  • The purchase price of the home cannot be over the limit for the county where the home is located
  • Your income must be below the limit for the county where the home is located
  • You must meet the IRS’ definition of a first-time homebuyer, meaning you have not owned AND occupied your primary residence for the last three years prior to application
  • The home must be one of the following types:
    • Single Family homes
    • Townhome
    • 2-4 Unit homes (you must reside in at least one unit)
    • Condominiums (must be approved)
    • Modular/Mobile homes
  • You must be a veteran or active duty military for the Salute Our Soldiers Loan program

For those who may not qualify for one of the FHFC Homebuyer Loan Programs, there is the Florida Mortgage Credit Certificate (MCC) Program, which offers federal income tax credits to offset the cost of monthly mortgage payments. Under this program, you can claim up to 50% of the mortgage interest paid each year as a tax credit on your federal income taxes.

Now that you’ve chosen a home and know you qualify for one of FHFC’s Homebuyer Loan Programs, it’s time to come up with a down payment and closing costs. Down payments vary widely, but 10-20% of the purchase price is common. Closing costs will run you about 2-3% of the purchase price. So on a $250,000 home, you would need at least $25,000 for a down payment and another $5,000 for closing costs. That’s $30,000 in cash right out of your pocket!

Thankfully, Florida Housing offers several down payment and closing cost assistance programs in the form of second mortgages that can be combined with their Homebuyer Program mortgages. 

  • Florida Assist Second Mortgage – provides up to $10,000 in down payment assistance as a 0% interest deferred second mortgage, so no payments are required.
  • 3%,4%, 5% HFA Preferred PLUS or Advantage PLUS Second Mortgage – recipients receive 3%, 4%, or 5% of the first mortgage as a forgivable second mortgage. No payments are required, and the second mortgage is forgiven at a rate of 20% per year over five years.
  • Florida HLP Second Mortgage – provides up to $10,000 in down payment and closing cost assistance as a 3% interest, fully amortizing the second mortgage with a 15-year term. Most of the payment is deferred, but the borrower is responsible for $69.06 per month.

More information about all these programs and a list of approved lenders can be found on the Florida Housing Finance Corporation’s website at www.floridahousing.org.

Whether you’re a first-time homebuyer, a seasoned real estate developer, or looking to refinance, Benefit Title Services has experts on staff to take you from offer to closing quickly and easily. Call us at (813) 251-1420 to find out how we can save you time and money today.