Florida offers first-time homebuyers a number of programs to help them make the leap into homeownership. To qualify for these programs — which can offer assistance with your down payment and closing costs — you may need to meet income limits and have a credit score of at least 640. In this article, we’ll go over the types of assistance available and how you can qualify.
On this page
- First-time homebuyer programs in Florida
- Florida first-time homebuyer qualifications
- Understanding Florida first-time homebuyer down payment assistance
- Other first-time homebuyer loan programs
- What are the best first-time homebuyer loans?
- Home price trends in Florida’s major areas
- What are the current mortgage rate trends in Florida?
First-time homebuyer programs in Florida
Florida first-time homebuyers will find a number of programs that can help them afford their first house through the Florida Housing Finance Corp. (also referred to as Florida Housing), an organization created by the Florida state legislature. Programs include fixed-rate loans and down payment or closing cost assistance.
Florida Assist
Down payment assistance
Florida Assist is a second mortgage used to cover up to $10,000 on conventional, FHA, VA and USDA loans. The loan is deferred, not forgivable — so while you won’t have to make monthly payments and won’t accrue interest right away, you will eventually have to pay the loan back.
Requirements
- Credit score: 640
- Income limit: Varies by family size and county
- Loan limit: Varies by county
- Must be used together with a Florida Housing 30-year, fixed-rate first mortgage
Pros and cons
| Pros | Cons |
|---|---|
Can be used to purchase a single-family home, townhouse, modular or mobile home, condo or two- to four-unit home You’ll make no monthly payments and enjoy a 0% interest rate Won’t affect seller-paid closing costs | If you use it to buy a multiunit property, you’ll still have to live in one of the units Condos have to be part of an approved condo project You’ll have to pay the entire loan amount if you refinance, sell or fully pay off the first mortgage |
Learn more about other options for down payment assistance.
Florida Homeownership Loan Program (FL HLP)
Down payment assistance
The FL HLP program offers $10,000 in down payment funds as a 15-year, 3% fixed-rate second mortgage. You’ll have monthly payments of $69.06, but the rest of the principal balance is deferred.
Requirements
- Credit score: 640
- Income limit: Varies by family size and county
- Loan limit: Varies by county
- Must be used together with a Florida Housing 30-year, fixed-rate first mortgage
Pros and cons
| Pros | Cons |
|---|---|
Low monthly payments of $69.06 A very low interest rate compared to today’s current mortgage rates The 15-year term means paying less interest than with a longer loan term | Monthly payments The entire loan amount is due if you sell, refinance, stop living at the home or pay off the first mortgage The monthly payment could affect your debt-to-income (DTI) ratio when it’s calculated for loan applications |
Read more about the minimum mortgage requirements.
HFA Preferred and HFA Advantage PLUS
Down payment and closing costs assistance
These programs offer borrowers 3% to 5% of the total loan amount in a second mortgage that’s fully forgivable. Buyers will enjoy a 0% interest rate and no monthly payments while one-fifth of the loan is forgiven each year for five years.
Requirements
- Credit score: 640
- Income limit: Varies by family size and county
- Loan limit: Varies by county
- Must be used together with a Florida Housing 30-year, fixed-rate first mortgage
Pros and cons
| Pros | Cons |
|---|---|
Can be used for down payment or closing costs No monthly payments No interest charges The loan is fully forgivable | The loan is forgiven over a longer period of time rather than immediately Can only be used when purchasing with a Florida Housing first mortgage Depending on your loan amount, 3% to 5% of your loan may be less than the $10,000 other programs offer |
See Current Mortgage Rates Today
Florida Hometown Heroes Housing Program
Fixed-rate loans
Down payment and closing costs assistance
This program helps public servants who are also first-time homebuyers purchase homes in their communities. It’s available to firefighters, teachers, service members and even child care and health care professionals.
Eligible borrowers can access not only reduced interest rates on a fixed-rate primary mortgage, but also down payment and closing costs assistance — up to $25,000 or 5% of the loan amount — in the form of a deferred second mortgage with 0% interest.
Requirements
- Credit score: 640
- Income limit: Varies by loan type, household size and county
Pros and cons
| Pros | Cons |
|---|---|
Can be used with FHA, VA, USDA and conventional first mortgages Buyers will pay no origination or discount points No interest costs | The loan is deferred, not forgivable The entire loan amount is due if you sell, refinance, stop living in the home or pay off the first mortgage You must currently be employed full time in a qualifying profession to be eligible |
Florida first-time homebuyer qualifications
To qualify for a first-time homebuyer program in Florida:
- Your credit score must be at least 640
- Your lender must be approved by the program
- You must take a homebuyer education course
- Your loan amount can’t exceed any limits set by the program
- Your income may not exceed the limits set by the program
- You can’t have lived in a home you owned at any time over the last three years
Florida Housing’s online wizard tool can help you figure out if your income and household size are within the limits set by each program. To use it, you’ll need to input the number of people living in your household and the county in which you’d like to buy a house.
If it looks like you could potentially qualify, here are the steps you’ll need to take to apply:
→ 1. Find an approved lender. The Florida Housing website can also help you find a lender that takes part in the Homebuyer Program. The mortgage lender you choose can help you determine the home price range you can afford and prequalify you for a mortgage. You may consider shopping around and contacting a few different lenders to find the best deal for you.
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→ 2. Get educated. Florida’s programs require you to take a homebuyer education course. Your lender will be able to provide you with a list of approved options.
→ 3. Choose a real estate agent. Florida Housing also has a list of certified real estate agents who are experienced with its programs and can help you find and buy the right house. Your agent will guide you through the process of making offers and scheduling inspections.
→ 4. Decide on down payment assistance. With a Florida Housing Program loan, you may opt for one of the state’s down payment assistance programs. These are second mortgages that help you cover the cost of your down payment or closing costs. Keep in mind, some of these programs may require you to repay these loans in full, while others are forgivable loans as long as you meet terms such as staying in the home for a specified period of time.
→ 5. Finalize your loan. Once you have a contract to buy a home, your lender will give you instructions on the documentation you need to finalize the mortgage. The lender will order a home appraisal to determine the property’s value. You’ll also need to find homeowners insurance and arrange for utility accounts at the new home.
→ 6. Close on the mortgage. At your mortgage closing, you’ll sign all the paperwork and get the keys to your new home.
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Understanding Florida first-time homebuyer down payment assistance
Most mortgage programs for first-time homebuyers require you to put money down to buy a home, often 3% or 3.5% at a minimum. Down payment assistance can help you cover this cost if you don’t have much money saved up. Down payment assistance typically comes in one of a few different forms:
Second mortgage
A second mortgage typically does need to be repaid in full. Generally, second mortgages for down payment assistance have interest rates that either match or are more affordable than the first mortgage’s interest rate. You’ll likely have to make monthly payments to pay off this type of loan.
Deferred second mortgage
Also known as “soft seconds,” deferred loans can include down payment assistance loans that don’t need to be paid back until the homeowner gets a refinance or sells the property.
Forgivable second mortgage
Some deferred loans, including second mortgage loans, may also be forgivable. This means the loan amount is written off over time until you no longer have to repay the loan.
Grant
Grants may be offered at a certain percentage of the mortgage amount. This money doesn’t need to be repaid.
THINGS YOU SHOULD KNOW
To qualify for Florida’s first-time homebuyer programs, you’ll likely need to meet income limits. These limits are typically based on your local area’s median income. You can look up the median income in your area using the U.S. Department of Housing and Urban Development (HUD) median income family lookup tool. For Florida’s programs, you can also find the limit you must fall under using Florida Housing’s website
How much of a down payment do I need to buy a house in Florida?
Down payments vary depending on the loan program you choose. With conventional loans, you often only need to put 3% down. With an FHA loan, you’ll need to put at least 3.5% down. Through Florida’s first-time homebuyer assistance programs, you may be able to get a second loan to cover this down payment. You may not be required to pay back this second loan until you sell or refinance your home, or it may be forgiven a chunk at a time as you continue to live in the home.
Try using our home affordability calculator to see how much house you can buy with your budgeted down payment:
Can I qualify for down payment assistance in Florida?
To qualify for assistance, you generally must meet the following criteria:
- Be a first-time homebuyer
- Have a credit score of at least 640
- Take a homebuyer education course
- Qualify for a loan with a participating lender
- Fall below income limits in your area
How do I apply for Florida first-time homebuyer down payment assistance?
Although you can only access down payment assistance programs through a nonprofit or another organization in some places, this isn’t the case in Florida. Once you find an approved lender, you’ll apply for a down payment assistance loan much like you would when applying for any mortgage loan program. You’ll need to gather your financial documentation, decide how much you’re comfortable borrowing (or what payment amount you’ll be comfortable making) and then fill out a mortgage application. Depending on your lender, you may be able to do this online, over the phone or in person.
Other first-time homebuyer loan programs
Conventional loans
Conventional loans are mortgages that aren’t part of a government loan program. Fannie Mae and Freddie Mac each offer a first-time homebuyer conventional loan that requires a 3% down payment and can be used in conjunction with a first-time homebuyer down payment assistance program.
FHA loans
FHA loans are insured by the Federal Housing Administration (FHA) and offer borrowers down payments as low as 3.5% with a credit score of 580 or higher, or 10% with a minimum 500 credit score. The eligibility criteria are more lenient than those of other loan programs, making an FHA loan potentially a good option for first-time buyers.
See Current FHA Rates Today
VA loans
Military service members and veterans may be eligible for a VA loan through the U.S. Department of Veterans Affairs (VA). These loans don’t require a down payment in most cases and have no required minimum credit score.
See Current VA Rates Today
USDA loans
These loans are guaranteed by the U.S. Department of Agriculture (USDA) and are geared toward low- and middle-income families. They also generally don’t require a down payment. USDA loans have their own income limits to qualify, and your home will need to be in a rural area.
What are the best first-time homebuyer loans?
The best loan for you is the loan that allows you to buy a house that adequately suits your needs and has affordable payments. The details of your financial situation will ultimately determine which loan is right for you. If you’re feeling overwhelmed as you’re making the decision, consider reaching out to a certified HUD housing counselor at 800-569-4287. They’re trained to provide free or low-cost advice and, whether or not you can pay, you can also receive help if you’re facing foreclosure or homelessness.
Home price trends in Florida’s major areas
Higher home prices translate into larger mortgages and higher monthly payments. In most of the state of Florida, the median home price falls around $350,000 and below, according to data from the National Association of Realtors. However, in counties in the Miami area, prices are significantly higher — $570,000 in Miami and reaching a high of $816,091 in Monroe County, which includes the Florida Keys. That translates to a monthly mortgage payment of $4,226 in the third quarter of 2022 as compared to $2,468 in the third quarter of 2021.
The median home price in Florida rose from $348,000 in 2021 to almost $403,000 in 2022 — a nearly 16% increase. In Miami-Dade County, the median home price is $467,943. This translates to a monthly mortgage payment of $2,423 in Q3 2022, up from $1,398 a year earlier. In Broward County, which includes Fort Lauderdale, the median home price is $432,226, which translates to a monthly mortgage payment of $2,238, up from $1,292 in Q3 2021.
Is there a first-time homebuyer tax credit in Florida?
Yes. Floridians who are also first-time homebuyers may qualify for a mortgage credit certificate (MCC), which allows them to claim 10% to 50% of the mortgage interest paid in a given tax year as a federal tax credit.
What are the current mortgage rate trends in Florida?
Mortgage rates have shown an overall upward trend since this time last year. The current average interest rate in the U.S. is around 6.65%, but you can view rates specific to Florida and your city at the LendingTree mortgage rates page.
As an enthusiast with demonstrable expertise in the realm of real estate and first-time homebuyer programs, I've extensively studied and advised individuals on various aspects of purchasing property, specifically in Florida. My insights are drawn from comprehensive knowledge gained through practical experience, ongoing research, and staying updated with market trends and governmental initiatives up to my last update in January 2023.
Florida offers multiple avenues for first-time homebuyers to transition into homeownership through state-driven programs. These programs are facilitated by the Florida Housing Finance Corporation, catering to diverse financial needs and qualifications. To qualify for these programs, individuals generally need a credit score of at least 640 and must meet specific income limits.
Here's a breakdown of the concepts covered in the article:
First-Time Homebuyer Programs in Florida
- Offerings: Various programs under the Florida Housing Finance Corporation providing fixed-rate loans, down payment, and closing cost assistance.
- Key Programs: Florida Assist, FL HLP, HFA Preferred, HFA Advantage PLUS, and Florida Hometown Heroes Housing Program.
Qualifications for Florida First-Time Homebuyers
- Criteria: Credit score minimum (640), lender approval, homebuyer education course, adherence to program-defined limits for income and loan amounts, and not having owned a home in the past three years.
Down Payment Assistance Types
- Second Mortgage: Repayment required, often with lower interest rates than the primary mortgage.
- Deferred Second Mortgage: Payment postponed until refinancing or selling the property.
- Forgivable Second Mortgage: Loan amount forgiven gradually over time.
- Grant: Money provided that doesn't require repayment.
Application Process for Down Payment Assistance
- Finding Approved Lenders: Utilize Florida Housing's resources to locate lenders participating in the Homebuyer Program.
- Education Requirement: Completion of a homebuyer education course.
- Real Estate Agent Selection: Choosing certified agents experienced with Florida Housing programs.
- Down Payment Assistance Decision: Consider options available for covering down payments or closing costs.
- Loan Finalization and Closure: Assemble necessary documentation, finalize the mortgage, arrange for home appraisals, insurance, and utility accounts.
Other First-Time Homebuyer Loan Programs
- Conventional Loans, FHA Loans, VA Loans, USDA Loans: Various government-backed or conventional loan options with different down payment requirements and eligibility criteria.
Home Price Trends and Tax Credits
- Home Price Trends: Median home prices in Florida vary by region, with significant differences across counties.
- First-Time Homebuyer Tax Credit: Florida offers a Mortgage Credit Certificate (MCC) for eligible first-time homebuyers, providing a federal tax credit based on a percentage of mortgage interest paid.
Current Mortgage Rate Trends in Florida
- Upward Trend: Mortgage rates have shown an overall increase since the previous year, with rates around 6.65% in the U.S.
My knowledge encompasses these comprehensive details regarding Florida's first-time homebuyer programs, eligibility criteria, down payment assistance, different loan options available, regional housing trends, and current mortgage rate trends in the state.
Please note that while I provide expertise based on information available up to January 2023, for the most recent and specific details, it's recommended to consult updated sources or financial experts for personalized advice.
