Florida Down Payment Assistance Program FAQ – 2019

Hardest Hit Fund for 2019 – $15,000 “Forgivable Funds”

Updates coming in March to possible Program changes, below are answers to how the 2018 program worked before running out of funds.

Often when I speak with many first time home buyers working with Blue Sun Realty, many are surprised that they may qualify for the Florida Down Payment Assistance Program and can receive up to $15,000 to use for their down payment when purchasing their home. Of course, this revelation leads smart buyers into asking lots of questions and figuring out what it takes to qualify for this money. To help our customers out, I’ve put together a quick list of frequently asked questions about the Florida Down Payment Assistance program.  This program is for HILLSBOROUGH, PASCO, DUVAL, CLAY AND OSCEOLA Counties only and starts MARCH 4, 2019

 

Or course, if you have any questions on this information or would like someone to work with you to regarding getting qualified, please reach out to myself (angie@BlueSunRealty.com), fill out our Blue Sun Realty contact form or reach out to any of our professional real estate agents  at 813-365-3370 and we would be happy to help.

What is the Florida Down Payment Assistance Program?

This is a program sponsored by the state of Florida and offered through various lending institutions that provides up to $15,000 in down payment funds for first time home buyers (typically defined as not owning a home within the last 3 years). This is typically first issued as a loan and however the entirety of the loan balance sits as a 2nd mortgage at zero interest and zero payments and does not need to be repaid until the home is sold or refinanced if the borrower stays in the home for 5 years. In addition, 20% of the 2^nd mortgage is FORGIVEN each year.  Therefore, after 3 years only $4,000 would need to be repaid if you decided to sell or refinance before the 5 year time frame.

What Florida Counties participate in the Florida Down Payment Assistance Program?

Hillsborough, Pasco, Osceola, Deval, Clay Counties Only at this time

What are some restrictions of the Florida Down Payment Assistance Program?

One of the main and often overlooked restrictions is that the program is based on a first come, first serve basis. Thus if the funds run out – you may be out of luck in receiving them – even if you qualify. $20 Million was just released as of March 4, 2019 so this program should last at least 1 year.  Assuming that the funds are still available however, there are criteria that the home buyer and property must meet in order to qualify for the Florida Down Payment Assistance Program. Some of these requirements are:

• The loan used to procure the home must be a 30 year fixed rate mortgage
• The home buyer must be a first time home buyer (typically has not owned a home in Florida for 3 or more years)
• A minimum credit score of 640 is required
• The home buyer must live in the home and it cannot be a rental or second residence
• There are annual income limits as well as limits to the overall purchase price of the house
• The home must be a single family property. Condos require prior approval.
• Home buyers cannot use the funds to receive cash back at closing.

Do I have to pay the $15,000 from the Florida Down Payment Assistance Program back?

The agreement is a 2^nd mortgage at zero interest and zero payments. It does not need to be repaid if you stay in the home for 5 years

How to I qualify for the Florida Down Payment Assistance Program?

This program is for people who have not owned a home in the last 3 years, have a 640+ credit score and have an income of no more than $80,000/year for the applicant or applicants combined.  It is designed to help 1^st time buyers and renters that want to invest in home ownership in the state of Florida.

What can I use the $15,000 for?

The funds received from the Florida Bond Loan Program can only be used for closing costs and assistance with the down payment.   In the instance that the total closing costs and down payment is less than $15,000, the additional funds can then be applied to the loan balance which provides more value to the home owner as they will have a lower overall monthly payment.

What types of loans are applicable to work with the Florida Down Payment Assistance Program?

This is a very common question I receive, especially from people who are pre-approved and qualified for an FHA Loan. The Florida Down Payment Assistance Program will work with and accept FHA, Conventional and VA loans.

Blue Sun Realty works with some excellent lenders who can assist you with the process for applying to this program.

Can I use this program for a mobile home?

No. Applicants to the Florida Down Payment Assistance Program may only use the funds to purchase single family homes. In some instances, a condo / townhome may be purchased using these funds – although prior written approval is required.

Seems too good… so… what is the catch?

Another common (and great) question we receive. The Florida Down Payment Assistance Program through the Florida Hardest Hit Fund.  I have used this program, their mortgage rates were slightly higher (usually only 0.25% difference) than had they not enrolled in the program. It has been explained to me by more than one lending institution that this is common practice for these types of loans, as there is slightly more risk to the bank – as they are the funding the balance of the $15,000.  However, the average increases was nominal and amounted to between $25-$50 more in monthly payment.

Why should someone use the Florida Down Payment Assistance Program?

• For someone that is trying to make the jump from being in a rental and not having the funds to purchase, this is a great option. This is also a great option for someone buying a home that may need a few things to make it more perfect, like a fence, appliances or flooring. The money that someone did save up could go towards those things and the down payment and closing costs are covered from this program
• If you have the money for down payment but need closing costs covered, this program will help with that. These days, most of the good homes have multiple offers. This program allows you to be more competitive with your offer so you don’t have to ask for closing costs if you don’t have it

How can Blue Sun Realty help me with this program?

We’ve got connections! Unfortunately not many lenders work with the Florida Down Payment Assistance Program given the increase in risk pool.  In addition, as it’s a government Florida program it requires a more paperwork and lenders themselves must apply for and maintain approval to be a member of the program.

However, we have worked with a good amount of home buyers and helped connect them with reputable, honest and creditable lending institutions that are members of the program. We typically work with these lenders on a daily basis and can attest to their professionalism and willingness to help our clients completely with the application process.

If you are interested in learning more about the Florida Down Payment Assistance Program or need assistance with your real estate needs, please click here to contact Blue Sun Realty or call 813-365-3370.