Florida Down Payment Assistance

Florida Down Payment Assistance

One of the biggest barriers that new home buyers face when looking to make a new home purchase is saving up enough cash to cover their down payment, but don’t worry, the Florida Down Payment Assistance Program is here to help. In other words, buying a home without a huge downpayment is possible through the Florida Down Payment Assistance Program. Ultimately, this program may include grants and 0% interest rate 2nd mortgage loans, program qualifications may vary. Qualifications may include credit score and salary amongst other items

While lenders have made it increasingly more affordable to purchase a new home by offering new programs that lower down payment requirements for qualified borrowers, coming up with 3-5% or the purchase price, in most common cases, can be an obstacle.

As a response to serving the housing needs of Florida residents, the Florida Housing Finance Corporation created several down payment assistance programs. This was created to help stimulate economic activity and community growth throughout the state. 

The type of down payment assistance you received can vary depending on the program you qualify for. Therefore, in some cases, the state or county can provide loans at reduced rates and costs. In addition, other programs may be offered as non-repayable grants, zero-interest loans with no payment, or even deferred second mortgages.

Florida Down Payment Assistance – Florida State Housing Initiative Partnership

Funds for these programs are provided through the Florida State Housing Initiative Partnership (SHIP). In addition, the SHIP program distributes funds to approximately 67 counties throughout Florida1.

New Century Mortgage has been able to assist qualified homebuyers in applying for down payment assistance and utilizing it to help get them approved for financing on a new home purchase.

One should consider the Home Ready Program and Home Possible Program, as these programs might prove to be helpful. Below are two programs to consider if you are looking to take advantage of a Florida down payment assistance program.

Florida Down Payment Assistance -The Florida Assist Second Mortgage Program

Prospective buyers looking to purchase in specific counties throughout Florida may be eligible to receive down payment assistance through the Florida Assist Second Mortgage Program.

This program provides a non-forgivable second mortgage to eligible borrowers in an amount up to $7,500. In addition, this mortgage can be combined with most first mortgage programs, and offers a 0% interest rate and deferred repayment2.

When the home is sold, transferred, or the borrowers cease to occupy it, the full amount of the assistance will become payable in full. Similarly, when the first mortgage on the property is satisfied or refinanced, the assistance will become payable in full2.

The subject property must be located in Florida and be used as a primary residence. Borrowers may also be expected to meet certain eligibility requirements and complete a qualifying home buyer’s education course3.

Florida Down Payment Assistance – Florida Homeownership Loan Program Second Mortgage

Similar to the Florida Assist program, the Florida Homeownership Loan Program Second Mortgage allows borrowers in select counties to be eligible to receive up to $10,000 in down payment assistance to be used towards the down payment or closings costs related to a new home purchase2.

This program is structured as a non-forgivable second mortgage, carrying with it a monthly payment. Above all, the program provides borrowers a subsidized second mortgage of sorts, at a rate of 3% over a fully amortized, 15-year term2.

The remaining unpaid principal balance (UPB) is deferred, with similar exceptions as the Florida Assist program2. Eligibility requirements still mandate the borrowers use the property as a primary dwelling. Other qualifying criteria may also apply3.

Furthermore, lenders may need to consider the monthly payment as part of a borrower’s overall repayment capacity when underwriting the first mortgage solution being used for the purchase2.

In conclusion, if you want to learn more about these or other Florida Down Payment Assistance Programs, New Century Mortgage can answer all your down payment assistance related questions.

Sources

1 State Housing Initiatives Partnership (SHIP). (n.d.). Retrieved August 3, 2020, from https://www.floridahousing.org/programs/special-programs/ship—state-housing-initiatives-partnership-program#:~:text=Florida Housing administers the State, low and moderate income families.

2 Down Payment Assistance Programs. (n.d.). Retrieved August 3, 2020, from https://www.floridahousing.org/programs/homebuyer-loan-program-wizards/down-payment-assistance-programs

3 Florida First-Time Home Buyer Programs of 2020. (2020, June 03). Retrieved August 3, 2020, from https://www.nerdwallet.com/article/mortgages/florida-first-time-home-buyer-programs