FHA loans are extremely popular with Florida first-time buyers seeking the lowest down payment and interest rate. In general, FHA mortgages are available to qualified buyers with only 3.5% down payment. But there are ways to finance a home without a down payment using an FHA loan.
Down payment assistance and bond programs come in many shapes and sizes depending on the property state, household income, among other things. These programs can be forgivable or non-forgivable grants that can pay for not only the buyer’s down payment, but also the closing costs. The majority of these programs are designed for first-time buyers in mind.
In addition to these options, there are also seller contributions and gift funds that can be used towards a down payment. It’s also worth mentioning that FHA loans allow for lower credit scores, making them accessible to more buyers who may have had credit issues in the past. And with mortgage insurance requirements being less strict than conventional loans, FHA mortgages can be a great option for those with less than perfect credit.
Florida Hometown Heroes:
The Florida HomeTown Heroes Program has become very popular in recent years for FHA borrowers looking for 100% financing. The program used to be reserved only for certain occupations like first responders, teachers, etc. However, that changed last year when the program was opened to ALL eligible first-time buyers.
This program is a non-forgivable grant from the state that allows 5% of the mortgage amount (up to $35,000) to be used for down payment and closing costs. The second loan is a 30-year deferred mortgage with 0% interest. This means that buyers will receive upfront assistance without compounding interest. This is a great way to obtain a 100% FHA loan.
It is important to note that the second loan is not forgivable and must be repaid in full when you decide to sell, refinancing or transferring ownership. This can greatly reduce the up front expenses for a buyer and make homeownership more attainable.
Some of the HTH qualifying requirements include:
- Borrowers must be a first-time buyer and employed by a Florida-based employer, working 35+ hours per week. *Veterans are exempt from this requirement when using VA loan.
- All applicants must have an average credit score of 640 or higher.
- Borrower(s) must complete an approved online Homebuyer Education course.
- Household income must be below the set limit per county. The Florida income limit is $132,900 – $178,950 depending on the county.
- Hometown Heroes is designed for primary homes only. This program cannot be used to finance vacation homes, or investment properties.
- The program can be used to finance any eligible single family home, condo, or town home.
- The program can be used with any eligible loan program like FHA, Conventional, VA, USDA.
- The program funding is limited each year and only offered by approved lenders in the state. Contact us today to get started, simply submit the Info Request Form on this page or call us.
HUD $100 Down Loan:
The HUD $100 down loan is another option that can provide 100% financing. This program is restricted to HUD REO (Real Estate Owned) homes only. The home must be listed as a HUD-owned property and the borrower must purchase it with an FHA-insured loan. The $100 down payment can be financed with the mortgage.
HUD homes are typically foreclosed properties that were originally purchased with an FHA insured loan. This means they already meet most of FHA standards and requirements, making them easier to finance. Buyers can also receive up to $5,000 in additional funds for improvements for the property.
Like all DPA programs, the HUD $100 Down program is available for primary residences only and has income limits based on county. In Florida, the current income limits are similar to the HTH program above. Once the home is purchased, the new homeowner must live in it for at least one year before selling or renting it out.
This program is a great opportunity for first-time homebuyers who may not have a large down payment saved up. It also helps revitalize neighborhoods by getting HUD homes off the market and into the hands of homeowners.
Florida HFA Preferred:
Another popular option is the Florida HFA Preferred Conventional Loan. This program offers 3% down payment assistance through a second mortgage that is forgivable after five years of living in the property as your primary residence. It also allows for lower mortgage insurance premiums compared to traditional FHA loans, making it an attractive choice for many buyers.
In addition, there are various local and county programs throughout Florida that offer down payment assistance for first-time homebuyers. These programs often have income and purchase price limits, so it’s important to research and see if you qualify.
Want to learn more about any of the programs? Connect with us 7 days a week by calling or just submit the Info Request Form on this page.