Demand for housing in Florida generally exceeds supply. Sometimes it can be challenging for buyers to find the perfect home to meet their needs. Florida is a sunshine lover’s state with lots of beachfront properties and low taxes.
If you’re planning to buy a house in the Sunshine State, know that there are many programs that have been set up to assist first time home buyers in Florida. With the right research and the right help, you’ll definitely find your dream home.
The state has set up first time home buyer programs in Florida to assist you if you can’t afford to buy a house. The programs include loan and grant options offered by the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA).
These programs enable a home buyer to have little money for a down payment offering down payment assistance and closing cost assistance. These are federal programs. The state also offers many other resources.
What’s a First Time Homebuyer?
A first time home buyer is defined as anyone who has never owned a home. If this is the case with you, it means you fall into the category of eligible borrowers’ for the first time home buyer programs in Florida.
Five Popular Programs in Florida Housing Finance Corporation
The Florida Housing Finance Corporation (FHFC), popularly known as just Florida Housing, is the primary organization managing home buyer programs in Florida. They provide resources to low to moderate-income locals allowing them to buy a home.
An Overview of FHFC
For 40 years, Florida Housing has worked tirelessly, putting in place resources and programs that can provide affordable housing opportunities. This is through assistance such as home loan programs, mortgage credit certificates, and down payment assistance programs. FHFC makes owning a home possible for anyone.
The FHFC also helps home buyers find approved lending institutions and offers support throughout the purchase process. They even offer a home buyer education program. You must take a Florida home buyer education class to get help from the FHFC. The classes offer programs that give valuable information in just a few hours.
Another requirement from FHFC is that you must use one of the lenders pre-approved by the corporation. There’s a list from which you select. This is important for you as a buyer because it ensures maximum help from the corporation.
All Florida Housing’s loan programs are 30 year, fixed-rate mortgages. We’ll look at five popular programs used in Florida by home buyers to get the assistance they need.
Florida HFA Preferred Conventional Mortgage Program
This program offers fixed-rate mortgages for 30 years to first time home buyers in Florida. A buyer can put up as little as 3% for a down payment. Additionally, this program guarantees reduced mortgage insurance costs.
Typically you need personal mortgage insurance covering 18% of the house’s value rather than the usual 35%. Homeowners save thousands of dollars with this kind of insurance because it’s less expensive.
If you have down payment assistance and closing cost assistance, you can also easily combine them with your HFA loan. As we’ve already mentioned, to qualify for these loans, you have to apply through an approved lender.
Florida HFA Preferred 3% Plus Conventional Loan Program
This loan offers the same benefits as the HFA Preferred Conventional Loan with an additional 3% of the home’s purchase price to assist with down payment and closing costs. This is different because it’s a grant and doesn’t need to be repaid.
Military Heroes Government and Florida First Loan Programs | Salute Our Soldiers Military Loan Program
This program is for active-duty military personnel and veterans, and in this case, you don’t have to be a first-time home buyer to qualify. Both veterans and the military personnel are offered a 30-year fixed-rate mortgage loan with an additional government loan such as FHA, VA, or even the USDA loans.
These loans have low interest rates, and are similar to the HFA preferred loan. You can combine them with closing costs and down payment assistance programs.
HFA Preferred Grant
An HFA Preferred Grant covers about 3-4% of the house’s cost price. It’s a grant, so you don’t have to repay it if you qualify. There’s zero percent interest on it. Another condition with this grant is you need to combine it with a Florida Housing loan.
Florida Mortgage Credit Certificate (MCC) Program
The Florida MCC Program allows home buyers to claim from 10% to 50% of their loan and mortgage interest yearly. The maximum annual claim is $2,000 for every year you live in the house. This indirectly helps first time home buyers in Florida to save on their mortgage payments and other expenses. This credit should be used together with a Florida Housing Loan program.
How to Qualify for a Florida Loan Program
Some qualification requirements apply to the first time home buyer programs in Florida. To qualify, make sure you follow this list:
- You’re below the income limit in your county as the Florida Housing loan program is meant for low-to-moderate-income Floridians. The income limits differ with each county, so check whether you qualify.
- Your credit score should be 640 or higher.
- The home you want to purchase must be for your primary residence.
- The home must be in Florida.
- You must have completed or plan to complete an approved homebuyer education course.
If you meet all of the requirements listed above, the next and final step is to find participating lenders to prequalify for a mortgage program and determine which is best for you. Your home purchase price and income must be below the set limits in Florida. The FHFC website offers a simple tool that will assist you when you want to find out if your income is within the set limits.
National First Time Home Buyer Programs
Some national first time home buyers programs exist for those that want to buy their dream homes. There’s a website to visit which is Housing and Urban Development (HUD). This site prioritizes helping people become homeowners.
HUD also offers counseling for those who worry about qualifying to buy a home and offers programs that cater to civil servants under the Good Neighbor Next Door program.
Common National Housing Loans
If you have a low credit score of 580 you need 3.5% of the home purchase price. If your credit report scores less than 580, the FHA requires a 10% down payment. Most FHA loans require mortgage insurance.
These loans are for military veterans and their spouses who can get loans through the U.S. Department of Veterans Affairs, and some don’t even require down payments or mortgage insurance.
A USDA loan has no down payment assistance program, especially for people who live in rural areas.
First Time Homebuyer Programs Near Florida
Due to the high demand for housing in Florida, you might want to consider buying a home in nearby states that also offer some first time home buyers programs. Here are a few programs available in states near Florida:
- First time homebuyer programs in Alabama
- First time homebuyer programs in Georgia
- First time homebuyer programs in Mississippi
- First time homebuyer programs in South Carolina
A Glance at the Florida Housing Market
Before you buy your dream house, you might want to know what the market is like for anyone who wants to buy a house in Florida.
Florida is a metropolitan area with higher-priced homes. According to Florida International University and Florida Atlantic University, Florida and Ohio are the two leading cities with the most expensive homes.
Of the 33 most inflated U.S. markets in December 2021 seven were from Florida.
There’s an expected decline in prices which means there will come a time a home buyer can’t sell their home for a profit. Buying a home in metropolitan areas like Florida and Ohio means you’re buying at close to the market peak, and their property prices are highly volatile.
Moreover, there has been an increase in mortgage rates in the past few years, which is bound to affect the U.S. market, especially in metropolitan areas.
A home is probably the most expensive purchase anyone makes in their lifetime, so shopping around and taking your time when selecting the one you like is advised.
When it comes to buying a home, don’t make a rushed decision and don’t spend more than you can afford. Always do some research and know your budget. Make use of all the aids that have been set up by the state and federal governments to assist and ease the pressure on you when buying your first home.
Agencies such as Home Across America can help with fast and efficient buying and selling services. They guarantee their clients always get a fair price, and that’s what most first time homebuyers look for with the Florida Homeownership Loan Program.
The FHFC is the only statewide organization in Florida that offers help to first time home buyers. Check out all the assistance programs and determine which ones you qualify for. Then pick the one that suits you best.
Kris Reid is the CEO of Ardor SEO, a company that helps real estate professionals get more leads and customers to predictably grow their business.
Over the years, Kris acquired extensive knowledge of SEO and its practical applications in various industries, with the main focus on real estate.
In 2021 Ardor launched the Icons of Real Estate Podcast to share proven strategies from the top producing icon agents with the real estate community.
After obtaining the real estate license in 2022, Kris joined eXp Realty and launched Homes by Ardor, the platform that was built to be the fastest way to buy or sell a house. Homes by Ardor also provides leads for its partner companies and realtors.