Papers for Down Payment Assistance ProgramsGiven the wallet-straining effects of the recent rental market, many Floridians are considering buying a home instead of leasing. The process can feel overwhelming, especially if you don’t have money saved for a down payment or are concerned about your credit score.

According to the National Association of Realtors, first-time homebuyers only account for 1-in-3 homes sold nationwide despite a wide array of low-and-no-down-payment mortgages.

Perhaps potential buyers feel like financing a home is out of their reach and unaware of programs that can help. Maybe you’re one of them, and if so, this is probably good news for you.

Help for First-Time Homebuyers

First, it’s important to note that “first-time home buyers” is a bit of a misnomer. Anyone who hasn’t owned a property in three years is considered a first-time home buyer. This means you may be an eligible first-time home buyer even if you’ve owned a home before.

Florida offers programs available through the State Housing Initiative Partnership Program (SHIP). Funds from this program are distributed to Florida’s 62 counties as block grants. Each county receives funds, and each county is required to use those funds according to SHIP specifications.

Contacting your county’s Community Development Office is an excellent first step to identifying the program qualifying specifics for your county.

Using Pasco County in west Central Florida as an example, the income level of the applicant’s household determines eligibility for programs including access to Florida Housing Authority (FHA) mortgage options and down payment assistance grants or loans.

Down payment assistance grants or loans can be used in conjunction with an FHA mortgage, providing even more help to potential home buyers.

In Pasco County, interested consumers must take an eight-hour class offered through the Tampa Bay Community Development Corporation and work with an approved lender and realtor in order to qualify for SHIP programs. Most counties have similar requirements.

Once a property is selected, the lender will submit the application on behalf of the applicant. A list of approved lenders and realtors is available at the SHIP website.

Income eligibility limits for SHIP programs are set by the State of Florida. Counties may use one or more of the designated Adjusted Median Income (AMI) levels to determine program eligibility.

AMI is the midpoint of a region’s income distribution. Half the families in that region will make more than that number and half will make less. The U.S. Housing and Urban Development (HUD) office calculates this number for every metropolitan and rural are in the nation.

No Down Payment Options Home Buying Options

Income eligibility for down payment assistance ranges from 80% of 120% of an area’s AMI.

So, for example, if the midpoint income for an area is $50,000, to qualify for a down payment assistance program, your income must be between $40,000 and $60,000.

A first-time home buyer who earns less than $40,000 or less can receive a 30-year fixed-rate mortgage with a zero-percent interest rate and no down payment. Those making between $40,000 and $60,000 may be subject to down payment requirements, but fortunately, there are programs that help with that as well.

Down Payment Assistance

First-time homeowners can apply for a 3% or 4% Housing Financing Agency (HFA) preferred down payment grant. The grant amount is based on the purchase price of the home, and unlike loans, grants do not have to be repaid.

If you’re not eligible for HFA down payment grant, there are alternatives. The Florida Assist Loan offers up to $7,500 to be used for down payment and/or closing costs, and the Florida Homeownership Second Mortgage provides up to $10,000.

The Role of Credit Scores

While income is the primary consideration of eligibility, a lack of credit history or bad credit can be a barrier to homeownership. A credit score of at least 560 is required for eligibility for most programs, but a score that low will mean a higher interest rate and perhaps a greater down payment burden.

A credit score of at least 560 is required for SHIP mortgage loans, but other factors, those usually not considered by conventional lenders, help determine whether or not to approve your loan. These factors include:

  • The cost and location of the home you want to purchase
  • Whether or not a down payment can be made (not necessary in many cases, but it can be helpful)
  • What you’re currently paying for rent
  • The stability of your income

“Florida SHIP programs allow lenders to be broader in their assessment of creditworthiness,” Patty Smith of Synovous Mortgage, said.

Help for Non-First-Time Home Buyers

If you live in or are moving to an area impacted by Hurricane Michael, the Hurricane Michael Recovery Loan Program provides up to $15,000 for both down payment assistance and help with closing costs. This zero-percent interest down payment assistance loan, does not require monthly payments in addition to your mortgage and has a loan forgiveness incentive after five years of ownership.

If you currently own a home anywhere in the state and need major repairs to keep your home in line with building codes, SHIP has programs to help cover those expenses as well.

Whatever your circumstances, there is help out there for you. Start with your Community Development office or visit the Florida SHIP website for more information.


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