Florida Down Payment Assistance
One of the biggest barriers that new home buyers face when looking to make a new home purchase is saving up enough cash to cover their down payment, but don’t worry, the Florida Down Payment Assistance Program is here to help. In other words, buying a home without a huge pot of money is possible through the Florida Down Payment Assistance Program. Ultimately, this program may include grants and 0% interest rate 2nd mortgage loans, program qualifications may vary. Qualifications may include credit score and salary amongst other items.
While lenders have made it increasingly more affordable to purchase a new home by offering new programs that lower down payment requirements for qualified borrowers, coming up with 3-5% or the purchase price, in most common cases, can be an obstacle.
As a response to serving the housing needs of Florida residents, the Florida Housing Finance Corporation created several down payment assistance programs. This was created to help stimulate economic activity and community growth throughout the state.
The type of down payment assistance you received can vary depending on the program you qualify for. Therefore, in some cases, the state or county can provide loans at reduced rates and costs. In addition, other programs may be offered as non-repayable grants, zero-interest loans with no payment, or even deferred second mortgages.
Florida Down Payment Assistance – Florida State Housing Initiative Partnership
Funds for these programs are provided through the Florida State Housing Initiative Partnership (SHIP). In addition, the SHIP program distributes funds to approximately 67 counties throughout Florida.
New Century Mortgage has been able to assist qualified homebuyers in applying for down payment assistance and utilizing it to help get them approved for financing on a new home purchase.
One should consider the Home Ready Program and Home Possible Program, as these programs might prove to be helpful. Below are two programs to consider if you are looking to take advantage of a Florida down payment assistance program.
Florida Down Payment Assistance -the Florida Assist Second Mortgage Program
Prospective buyers looking to purchase in specific counties throughout Florida may be eligible to receive down payment assistance through the Florida Assist Second Mortgage Program.
This program provides a non-forgivable second mortgage to eligible borrowers in an amount up to $7,500. In addition, this mortgage can be combined with most first mortgage programs, and offers a 0% interest rate and deferred repayment.
When the home is sold, transferred, or the borrowers cease to occupy it, the full amount of the assistance will become payable in full. Similarly, when the first mortgage on the property is satisfied or refinanced, the assistance will become payable in full.
The subject property must be located in Florida and be used as a primary residence. Borrowers may also be expected to meet certain eligibility requirements and complete a qualifying home buyer’s education course.
Florida Homeownership Loan Second Mortgage
Similar to the Florida Assist program, the Florida Homeownership Loan Program Second Mortgage allows borrowers in select counties to be eligible to receive up to $10,000 in down payment assistance to be used towards the down payment or closings costs related to a new home purchase
This program is structured as a non-forgivable second mortgage, carrying with it a monthly payment. Above all, the program provides borrowers a subsidized second mortgage of sorts, at a rate of 3% over a fully amortized, 15-year term.
The remaining unpaid principal balance (UPB) is deferred, with similar exceptions as the Florida Assist program2. Eligibility requirements still mandate the borrowers use the property as a primary dwelling. Other qualifying criteria may also apply.
Furthermore, lenders may need to consider the monthly payment as part of a borrower’s overall repayment capacity when underwriting the first mortgage solution being used for the purchase.
In conclusion, if you want to learn more about these or other Florida Down Payment Assistance Programs, New Century Mortgage can answer all your down payment assistance related questions.
When applying for an FHA loan, you are able to substitute two years of education for your employment history, as long as you have a job offer lined up. You are more likely to be accepted if this job is in the same field that you studied in but as long as the salary is adequate and you have job security, you will be considered. You might be able to also use non-traditional credit sources in place of your standard credit score.
So, if you are a recent college graduate and you are looking to purchase your first home, start looking into FHA and all agency mortgage programs.
Applying For An FHA Loan With No Credit
A lack of credit is another common hurdle that college graduates face when applying for a loan. On a case-by-case basis and depending on the lender, you might be able to build credit by using credit cards and taking out loans, then making payments on time. Your overall credit score is calculated by the number of credit accounts open that you have used responsibly, how much debt you are carrying, the length of your credit history, and other factors.
College graduates may not have any credit because they haven't borrowed any money. However, when applying for an FHA loan, a first time home buyer can ask that non-traditional credit tradelines be taken into account. A non-traditional credit tradeline is a creditor that does not report to the credit bureaus that calculate your credit score. So, there are instances where you are making monthly payments for certain things but it is not being counted towards your credit score. Common examples of this include:
- Cell phone bills
- Car insurance bills
- Utility bills
- Car leases
- Internet bills
- Rent
By making these payments on time every month, you have already demonstrated your financial responsibility, but this won't show up on your credit score. Recent college graduates can use these non-traditional credit tradelines in place of a standard credit score. Having said that, there are guidelines about what can be considered.
A non-traditional credit tradeline might not be counted towards your application until you have made at least 12 monthly payments. This is generally to stop people from opening an account with a company and making a few payments just so they can boost their application. You must be able to demonstrate that you can make payments over an extended period of at least a year to two years.
The credit requirements can be stricter when using non-traditional credit sources. Any late payments could reflect poorly on you and could impact your chances of being accepted for a loan. This means that first time home buyers need to be very careful with all payments, even small ones like cell phone bills.
The Conforming Loan Limit
Every year, the dollar limit on what is deemed to be conforming is updated by the FHFA. This includes limits for both Freddie Mac and Fannie Mac, which are the two government-sponsored enterprises that it regulates.
Freddie Mac and Fannie Mae buy mortgages that meet their criteria from lenders and then repackage them into mortgage-backed securities for investors. This process provides lenders with the liquidity that is required to keep presenting borrowers with affordable mortgages.
Both Freddie Mac and Fannie Mac have further criteria for the loans they buy, including maximum debt-to-income ratios (DTI), minimum down money, and minimum credit scores. Yet, in general, when people speak about the standards for conforming, they are referring to loan limits.
So, what are these limits? For the year 2023, the limit is $726,200 whereas in 2022, the conforming limit is $647,200 and what should be a high balance limit of $937,500. This is a fairly large jump from 2021, and over $100,000 more than 2020. In 2021, the baseline conforming limit is $548,250. This is an increase from 2020. The year prior it was $510,400. The limit for 2020 could be bigger in areas where the median property cost exceeds this number, meaning borrowers in high-cost locations can get conforming loans of as much as $822,375, depending on the limit in the individual county. Just remember when you start your inquiry on home purchasing and get more detailed about what is a townhome, a condo, multi-family, or a single family home, make sure you know the rate could be different depending on what you choose.
Should you require a property loan that exceeds the conforming limit for your country, you are going to need to get a jumbo, which enables higher limits. You can also consider refinancing what used to be a jumbo loan to a conforming limit by first obtaining and then calculating mortgage payoff for 30 days or so.
Connect with MortgageQuote.com to learn more about conforming vs conventional loans.
Sources
State Housing Initiatives Partnership (SHIP)