Down Payment Assistance in Florida
Don't have a down payment? You can still buy a home, here we breakdown your options!Down payment assistance in Florida is more possible than you might realize!
Down payment assistance in Florida makes home ownership more possible for more individuals and families. USDA financing offers $0 down options in rural areas within Florida but not everyone wants to buy a home in a rural area. USDA also has household income limitations.
FHA financing in conjunction with down payment assistance saves the day giving you the ability to buy with no money down.
FHA financing has no geographic limitations, you can also buy a doublewide manufactured home constructed back to June 15th, of 1976. USDA requires a manufactured home to be 20 years or newer. The problem is FHA financing requires a 3.5% down payment. On a $300,000 house that’s $10,500. Not a lot of first time home buyers have that kind of money laying around. That’s where down payment assistance (DPA) comes in, and the truth is you don’t even have to be a first time home buyer.
As a mortgage brokerage we have over 250 lenders at our disposal, we use about half a dozen for down payment assistance. They vary in their requirements, so in this article I’ll explain what can be done, and what the limitations are across the spectrum of what we offer.
Where does the down payment assistance money come from?
Most down payment assistance programs in Florida are repayable. Even hometown hero’s is a repayable second mortgage. The problem is hometown hero’s requires to you work in a specific field, and often they run out of funds.
Depending on the DPA program used, the rate on the second mortgage is about 2% higher than the rate on the first mortgage. The term would be 10 years. So lets look at the example for the $300,000 house with a $10,500 down payment. If the rate was 2% higher than first mortgage, at 6% for example. It would be 8% for 10 years for the second mortgage. The payment would be $127.39 a month.
We do however have a couple of grant options that are 100% forgivable! That means you would have no payment at all, and not even a balance to pay back upon refinancing or the sale of your home. Certain other restrictions apply for a forgivable grant, like stricter debt ratios and possible income limitations. More often than not though its possible!
Some lenders also provide a forgivable second mortgage for the down payment, not a grant. The loan must be in place for 10 years, and has a 0% interest rate.
What are the minimum credit score requirements to use down payment assistance?
Remember that the lender providing the second mortgage or the grant for down payment assistance will also need to do your first mortgage. The minimum credit score required is a 580, but most wholesale lenders providing down payment assistance, require a 600 credit score. Remember we always look at the middle score of the three bureaus.
Are there income limitations?
The answer is that most of time there are no income limitations! The lenders that provide a forgivable grant for the down payment do have income limitations in some cases.
For example, if you aren’t a first time home buyer and you want to use a forgivable grant. Your income can not be over 140% of the area median income for the area you are buying. That’s only if you are not a first time home buyer though!
If you have not owned a home in 3 years you are considered a first time home buyer and the AMI requirements are waived. You can make a million dollars a year and still use down payment assistance.
If you’re not a first time home buyer and you want a forgivable grant let us check your specific area in Florida, because area median income (AMI) changes yearly!
What about closing costs?
Even though your down payment is covered, you still have closing costs! Depending on the sales price of your home, closing costs can range from 6% of the sales price to 3% of the sales price. If you are truly trying to keep your out of pocket expenses to a minimum then you need to negotiate for the seller to pay for your closing costs!
FHA financing allows you to ask for up to 6% of the sales price to go towards your closing costs and pre-paid items like home owners insurance and property taxes.
Be prepared to pay for an appraisal though! This can be anywhere from $500-$700. Other home inspections will be voluntary but recommended.
What are the frequently asked questions about down payment assistance in Florida?
- Do you need to do a class? Most lenders do require a first time home buyers course to be completed. If your credit score is over 620 you may not need to! This course can be done online by a HUD approved provider. Its actually pretty simple and doesn’t take very long.
- Are the interest rates higher? Yes, interest rates are higher when utilizing down payment assistance, however once a 6 month payment history has been established you can utilize a FHA streamline refinance to lower your rate!
- Do you have to have an automated underwriting approval? This is getting into the nitty gritty of the mortgage business but the answer is no. We have lenders that will provide down payment assistance with a manual FHA underwrite.
- What are the debt ratio maximums? Most down payment assistance providers just go off on the automated underwriting findings, which can allow for ratios up to 56% on the back end. Some lenders restrict it to 50% or in some cases 45%.
- Is there a minimum loan amount? We have lenders with no minimum loan amount, but most require a minimum first mortgage of $100,000.
- Are there additional fees? Some lenders do not have any additional fees, some have fees ranging from $395 to a $1095.
- Can I use down payment assistance to purchase a manufactured home? Yes, but it has to be a doublewide!
Is down payment assistance right for you?
There is no shame in using down payment assistance! Whether you are a first time home buyer or not. The shame is in not buying a house when you know you can afford one but you just can’t front the down payment. $0 down USDA financing has been around a while, and lots of people use the program. If you make too much for USDA, or you don’t want to buy rural, down payment assistance is a great option! Don’t let the down payment get in the way of becoming a home owner. Apply for a pre-approval below to get started!
Get a No Hassle Pre-Approval
Keith Meredith
Feel free to call or text message me directly at +1 (352) 615-1613 with any questions on any loan programs, credit score requirements or interest rates. 
