First Time Home Buyers Guide for Florida Residents

First-time home buyers in Florida have a wealth of opportunities when applying for financial assistance. Families with lower than average incomes are particularly rewarded when purchasing a new home. The wonderful neighborhoods of Florida achieve a good mix of diversity by giving every citizen the chance to reduce their risks when buying a house. The benefits offered to new home buyers in Florida aren’t limited to discounts and grants however.

Depending on the agency you apply with, real estate agents, property portfolios and due diligence are provided along with financial aid. The U.S. Department of Housing and Urban Development sets the criteria for housing assistance in Florida.

Not everyone can apply, and not every property market qualifies for home buyers’ assistance. In some areas, the U.S. Department of Housing and Urban Development requires that only 70% of the community you’re applying for can earn 80% or less in median income.

Who qualifies as a first-time home buyer?
If you haven’t owned or mortgaged a house in Florida during the past three years, then you qualify as a first-time buyer. The discounts and grants you receive as a new homeowner aren’t just a matter of income inequality. People who buy homes improve state economies while creating an environment that others also want to live in. You must be looking in Florida’s housing market for a primary residence to qualify as a first-time homeowner.

You do not qualify, for example, when buying a new home in Florida while owning one in New Hampshire. Additionally, most homeowner groups for new buyers will only complete your application once you’ve committed to study hours in a homeowner’s course. The course materials covered in home ownership classes consist of down payments, closing fees and renovation liability.

What advantages do first-time home buyers have?
New home buyers get the lowest percentages required for their down payments—if one is even required. State, federal and private funding is now aimed at ensuring that you incur the lowest costs when buying your first house.

The assistance loans you do receive have fixed rates, so your APR never changes during the life of your initial mortgage. Lastly, finding a place to call home—one that you own—is a major advantage within itself.

*The Fears That Stop Many From Finding a Home
Keep in mind that there are many families who deserve a home but can’t find one. The perks of first-time home ownership are designed to build confidence in anyone struggling to save a down payment. Don’t let a mortgage intimidate you, for once your initial costs are paid, your monthly house note will, on average, be substantially less than if renting in the same neighborhood. For the millions who fear buying a house, find comfort in knowing that your down payment is the largest obstacle.

In Florida, today, there are dozens of groups that offer assistance for down payments.

Key Types of Loans for Florida Residents
There are three sources of loans that you can apply for in the state of Florida. The assistance programs you have come from private, public and military aid. These loan options get regulated, “adjusted,” to fit the laws of the county or city you’re in. It’s best to start submitting your applications locally—to get the fastest turnaround. Expect the requirements of applying for new home ownership to slightly change in every district.

The Ease, Availability and Eligibility
For starters, even the common financiers that you’ve encountered offer special incentives for new home buyers. You don’t need to find any unorthodox loaner when researching agencies that provide help during your first purchase of a home.

Florida laws also allow you to combine multiple aids during your first purchase of a residence. You aren’t limited in the total assistance that you’d get qualified for.

Look to get qualified for a 30-year mortgage on average. The type of loan or aid you acquire, however, depends on the type of agency you apply with. Consider Florida’s various types of assistance from these main categories:

1. Conventional Mortgages
Our common way of buying a home starts with asking a bank for a loan. The “conventional” method we use requires us to provide a financier with 10% or 20% of the value of the loan we’re applying for. Traditional loans are then given out with the clause that the money lent is paid back in a certain time and at a higher amount than what you received. Any failure to meet your mortgage payments can result in the financier taking your home.

The reason that your home can be repossessed is due to collateral. Yes, most Floridians have to make down payments, but this money isn’t enough to secure a financier’s hopes of you paying them back. What’s needed to “insure” their money, which is to say protect them from risk, is the value of your home. The steps described above are the concepts involved with conventional loans in most cases.

The conventional method of loaning money also works for those applying for assistance as first-time home buyers. What differs when you qualify for assistance are the ways your down payment, interests and loans are paid.

You can expect discounts overall but while still using the conventional timelines of paying borrowed money back. Traditional loans are not supported by government funding, so the stakes for the financier are often higher than it is with other methods.

The higher risks that financiers incur through traditional lending results in higher APR rates for you. Conventional borrowing is also known as private lending.

2. VA Mortgages
The United States Department of Veterans Affairs (VA), whether you live in New York or Florida, is responsible for maintaining home buyer programs for veterans. All VA mortgages, as they pertain to financial assistance, are only granted to military personnel.

Veterans, reservists and active soldiers are those who qualify for VA mortgages. In regards to first-time home buyers, the general rules to qualify are the same when you live in Florida.

Once you verify your state residency and that you aren’t a homeowner, you’ll have access to VA programs that can ensure no down payment first time home buyer. Not having a down payment is a substantial clause, but you might be restricted to properties and neighborhoods that are owned by your military branch. For homes that are not on a military base, however, you can receive up to 103.3% of your purchase cost.

The additional 3.3% paid to you via a VA mortgage is helpful when moving in, doing renovations or paying your closing costs. In some cases, additional funding is granted to service personnel via a $6,000 check that’s designated for energy-efficient upgrades. You’re responsible for paying your VA loan back but with a good interest rate and favorable options if you decide to take out a second mortgage.

3. FHA Mortgages
Mortgage insurance is a smart option to consider as you build your experience in home ownership. The Federal Housing Administration (FHA) supports families by providing insurance to public lenders. The reduction of risk that lenders receive from insurance encourages them to grant you a loan when they wouldn’t do so otherwise. An FHA insurance policy compensates your lenders in the case that you default on your mortgage responsibilities.

Regarding Florida, FHA mortgages are primarily designed for residents with moderate to low levels of income. Candidates that do qualify for FHA are even granted assistance if their credit scores are low.

Your aid won’t eliminate the need for a down payment, but you will pay below the common amount required to receive a conventional loan. Roughly 96.5% of a home’s value can be borrowed when your assistance is supported by the Federal Housing Administration.

Other Loan Options to Consider
The FHA, VA and conventional mortgages are the core sources of loans you’ll find in assistance programs, and from these options, Florida offers additional aid that improves your borrowing via special features and home buyer incentives.

Though you’ll inevitably work with one of these loan options, you can choose which variations depending on your marital status, age, income and military service. Start with the following overview of the broader potentials you have:

– HFA Preferred Grant— The HFA Preferred Grant is conventional, and local representatives must approve you for it. Down payments as low as three percent are a realistic benefit to get. The money you receive, which is the full amount needed for a down payment, won’t have to be paid back through the HFA Preferred Grant program. Money for a down payment, however, is all you’ll receive.

– Florida Mortgage Credit Certificate (MCC) Program— Florida Housing offers MCC tax reductions of 10% or 50% off your yearly interests. The money you pay in interest every year can be used as a deductible during tax time. Properly using deductibles calls for you to itemize your MCC portions and subtract that value from your taxable income. You’re required to pay your mortgage fees as usual. At the end of tax season, however, you’ll receive a larger refund check. Limits on income and home values do apply when qualifying for Florida’s MCC program.

– Military Heroes Government Loan Program— In conjunction with any qualification requirements, you gain better interest rates along with assistance for closing costs and down payments.

– USDA Loans— The United States Department of Agriculture wants you to apply for loans that can ensure your down payment. Any house that you’re considering “must be located in an eligible area.” New construction and multi-family properties are eligible as your new purchase. One of the main focuses of the USDA program is to help elderly citizens find a home for the first time—if possible.

Different Programs to Qualify for in 2020

The best way to get good aid in Florida is by applying for multiple assistance programs. Generating first-time homeowners is pivotal to a state’s economy. You can combine different programs based on your understanding of the qualifications as they each will void or boost other incentives you apply for. You know that there are common structures in every homeowner loan, but there are also common types of assistance programs to use.

The identities of the programs you’ll apply with consist of the following:

A. Local Governments—Municipalities not only generate an income from taxes, but they are funded by federal governance also. Some local governments host their own farmers markets, art events and keynote speakers in an effort to raise money. Local governments rely on accountants to place money aside for assistance programs of many kinds. The need to improve housing communities makes it beneficial for them to help new homeowners qualify for a mortgage.

B. Community Organization—Community organizers, as they relate to new homeowners, consists of businesses, neighborhood associations and even wealthy individuals. If neighbors aren’t pooling their own money to diversify their communities, then you can expect homeowner associations to work to get first-time buyers interested in their area. Local businesses, with the intent of marketing themselves, provide benefits for homeowners as an act of charity.

C. Nonprofits—The type of assistance you receive from a nonprofit is based on the agenda of the agency. Some nonprofits are property developers that provide funding to people who’re eager to do renovations. The visual integrity in the way some communities look, for example, is a result of nonprofits ensuring that construction occurs according to distinct bylaws. Consider researching charitable programs that focus on affordable housing for new homeowners in Florida.

First Time Home Buyer Grants

Grants do have to be applied for, but you won’t have to write a 50-page essay to get your homeowner benefits. What’s so attractive about grants is that they’re non-repayable. Your taxes, as it relates to taxable income, won’t be negatively influenced by any homeowner grants you receive. Just don’t expect to find a grant for covering the entire cost of a house. Grants, like all assistance for new home owners, primarily help you with your initial costs. You can use any money that you’re granted to pay off the following:

Down Payments
The cost of a home and the agency you apply through are factors that dictate your down payment. Giving you flexibility is the aim. If you can manage to get 75% of your down payment paid by a grant, then you can still apply for other assistance for the 25% left to cover. Since it’s the most challenging aspect of buying a home, your main focus must be to acquire a lump sum to buy the home you dream of with.

Closing Costs
Millions of home buyers are shocked by the closing process once it comes, for it brings fees that many don’t initially expect. Florida’s closing costs for home purchases come primarily from paperwork. Notarized documents, lawyers, surveys, appraisals and title policies all cost money. The bulk of the closing costs in home buying are transferred to the buyer, but this can all be negotiated by you.

Additionally, should you qualify for assistance, all the fees that need to be paid can be paid—without your own money. You simply need the right assistance.

Taxes
The Homestead Exemption program is an example of how you can reduce your property taxes. Just be sure to register your new home as a permanent residence. As the name implies, Homestead Exemption offers an incentive for Floridians to settle down and make a lifelong commitment to their communities. Be sure to take into consideration the fact that this benefit only renders during tax season.

State Housing Initiatives Program
The State Housing Initiatives Program allocates resources towards keeping affordable housing available in Florida. Below are other options to consider when applying for grant money:

– Pensacola—HOME Home buyers Program is dedicated to providing affordable housing to new homeowners. Roughly $12,000 can be granted as forgivable debt once you close a housing deal. Escambia County requires that your purchase is a new construction in Pensacola. Your credit history is expected to be at good, healthy levels. Only eight hours in a certified class is required.

– Panama City—The Gap Finance Program supports new home buyers who seek a “bridge loan.” The home assistance offered by Panama City provides up to 50% of the total value of the home you’re considering. This Gap Finance Program is relatively easy to qualify for if you’re buying a home for the first time. Residents consider this option because they’ll qualify for more aid when making repairs or renovations to an existing property.

– Ocala—The Purchase Assistance Program gives residents in Ocala the option of buying a home without a down payment. The income limit for a single person, however, is $26,750, so you won’t qualify if you earn more. The application process includes a letter of commitment that you must write. Applicants who’re approved are then assigned to an experienced Realtor. You’ll not only find reasonable APRs, but you’ll immediately get a full overview of your property market in little time.

– Daytona Beach—Affordable Home Ownership Assistance Program gives you a chance of living on coastal waters. Only low-income candidates can apply. The AHOAP limits the purchase cost of the home you want—to $258,690.60 or less. Townhouses, beach homes and condominiums are approved constructions for this assistance. Down payments and closing costs are payable through the AHOAP.

Tips

Be open to any first-time home buyer tips you find. What your family and friends experience as homeowners might differ from what it looks like “from the outside.” The fact is, becoming a homeowner, with or without the money, is a challenge. Each home buyer should start their journey with helpful resources, friends and a few stints of due diligence. You can take these steps when preparing for your final purchase:

*Set Your Budget—You not only need to be realistic about what you can afford, but aid applications limit how much the house you want can cost. The fundamental idea here is simple; those who’re considering a $2-million house are more likely to manage their own down payments without help. On average, the purchase limits for benefits in new home ownership sit right around $300,000.

*Rethink Your Debt—Be very cautious when applying for loans if your credit score is low. Lenders who reject you can cause your score to lower. Work to build your credit history, for the financial assistance that Florida offers new home buyers doesn’t always apply to your full loan. Though you might apply and then qualify for assistance, the help you get as a new home buyer focuses mainly on the initial stages of home ownership. Pay your debts to boost your chances of getting a loan.

*Practice Due Diligence—For those without experience in real estate, due diligence is a term that means research. In being ambitious to know your property market, you’ll uncover houses that others will overlook. Doing due diligence is a way of boosting your leverage in negotiations. There are things that home sellers can take advantage of if you’re not familiar with what’s in their property markets. All you need, today, is an internet connection to start your research with.

*Work With an Agent—Agents and Realtors are knowledgeable regarding the programs that exist for first-time home buyers. Having a set limit in what you spend as a new buyer isn’t about limiting your vision of home; it’s about ensuring that your first purchase is manageable as you then begin learning. If cost isn’t a major factor for you, then consider partnering with a professional. Agents improve your due diligence, handle paperwork and negotiate with property owners for you.

Gina Wilson

Another post from Gina Wilson – Credit & Loans Specialist Blogger.

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