Buying a home for the first time is an exciting – and often overwhelming – experience. This is especially true in Florida, where high demand in local markets puts pressure on buyers to spend wisely and finance appropriately in order to get their dream home.
Fortunately, you’re not on your own when it comes to meeting the competitive demands of Florida’s real estate market. In fact, as a first-time homebuyer in Florida, you may qualify for a variety of loan and grant opportunities, including zero-down loans and closing cost assistance.
So, what are the qualifications for Florida first-time homebuyer programs? We’re breaking down the basics, from who’s considered a first-time buyer in Florida to how to apply for available grants and loans. Keep in mind that even previous homebuyers may still qualify based on Florida’s unique definition of the term, so read on to find out what’s out there and how to take full advantage.
Benefits of Being a First-Time Homebuyer in Florida
If you meet the requirements, Florida first-time homebuyer programs can save you a great deal of money on the upfront costs of buying a home. They can also potentially help you save thousands of dollars annually compared to renting or buying without assistance.
Depending on the program, financial aid is provided to first-time buyers in the form of loans or grants. Loans have to be repaid, while Florida homebuying grants do not.
Here are some of the benefits of qualifying as a first-time homebuyer in Florida, all of which can make a huge difference in the short- and long-term costs associated with homeownership.
Down Payment Assistance
Low- or zero-down loans are a mainstay of Florida first-time homebuyer programs. These loans allow for a down payment as low as 0% when you purchase a property, and often go hand-in-hand with other benefits noted below. There are also non-repayable grants that can be applied to both down payments and/or closing costs.
Reduced Interest Loans
First-time buyers often have access to reduced interest – or even zero-interest – loans. These tend to be 30-year fixed loans, meaning your low interest rate is not at risk of increasing over time.
Forgivable Loans
Forgivable loans, also called “soft” second mortgages, are another type of down payment assistance available to qualifying Florida first-time homebuyers. For use toward down payments and closing costs, 20% of the total loan amount is forgiven every year for five years, after which time the loan is completely forgiven and no longer has to be repaid.
Tax Credits
There is no longer a federal first-time homebuyer credit; however, Florida first-time buyers can potentially still save on taxes each year through mortgage interest tax credits through local housing finance agencies.
Lower Monthly Payments
Florida first-time homebuyer programs can reduce monthly payments in a variety of ways, such as by providing below-market interest rates, zero-interest second mortgages, or, in the case of forgivable loans, a yearly decrease in the loan amount.
Who Qualifies as a First-Time Homebuyer in Florida?
Under Florida’s Three Year Ownership Rule, there are two easy ways to know if you meet Florida’s first-time homebuyer qualifications:
- You have never owned a home before; OR
- You have not owned a principal residence in the past three years
This flexible definition of who is considered a first-time buyer in Florida means that even more borrowers can access perks like lower interest rates, down payments, and credit requirements.
Some programs have additional qualifications for potential borrowers. Speak to a mortgage broker to discuss eligibility for a first-time buyer program in Florida if you are a:
- Veteran
- Single parent
- Teacher, police officer, firefighter, or healthcare worker
- Newly-certified medical professional
How Do I Qualify for a First-Time Homebuyer Grant in Florida?
Some programs, such as Florida Hometown Heroes, provide additional benefits for qualifying first-time buyers that include grants of up to $35,000 toward a down payment and closing costs.
To qualify for a first-time homebuyer grant, you’ll typically need:
- Credit score of 640 or higher
- Income and debt-to-income ratio within assigned limits
- To stay under the purchase price limit for your county
- To work with an approved lender
Similar to loan programs, some grants have more specific requirements, such as those around military status or employment status.
What Do I Need to Buy a House in Florida for the First Time?
There are several standard steps you’ll follow to buy a home in Florida. The differences for first-time buyers mostly come down to the types of financial assistance that are available, as well as the qualifications for each type of aid.
- Budget and financing
- Mortgage pre-approval
- Searching for a home
- Offer, inspection, and appraisal
- Closing
Budget and Financing
Unless you’re buying in cash, you’ll need to take out a mortgage in order to purchase a home. Different mortgage loans in Florida come with different requirements, but in general, expect to supply documents related to your income, credit score, and employment history. As a first-time homebuyer, your lender may provide more leeway in terms of credit score and income, though you’ll still need to prove you can afford to pay a monthly mortgage bill.
While you get financing in order, assess your current financial situation and long-term financial goals, then set a budget from there. It’s best to align your budget with what you can reasonably afford, rather than maxing out your available loan offer.
Mortgage Pre-Approval
Getting pre-approved for a mortgage will save you last minute surprises and make you a more competitive buyer. Work with Alex Doce to get the best rate based on your credit score, debt-to-income ratio, and other qualifications, as well as for help choosing the right mortgage type and first-time buyer assistance program. They’ll be able to walk you through every step of applying for a Florida first-time buyer grant or loan, and are an essential resource when determining program eligibility.
Searching for a Home
With financing ready to go, connect with a local Florida real estate agent to begin your home search. Things to consider during this part of the process include your must-haves and deal breakers, your preferred location, and whether a given property meets the requirements of any first-time buyer loan or grant you’ll be using.
Buying a home is a huge decision, so try not to rush this stage. While it’s normal to be eager to own your first home, you’re best off taking your time and making sure a property checks off all the right boxes before you invest.
Offer, Inspection, and Appraisal
You’ve found a home you love, now what? With a mortgage pre-approval in hand, you’ll know what you can offer and how much you can afford to negotiate. If your offer is accepted, you’ll then have confidence that funding will come through as needed, barring any unforeseen roadblocks (think title issues or losing your job).
The inspection and appraisal are major parts of this stage. The inspection happens first and will clue you in on any serious issues with the house or things you need to further negotiate with the seller. Then comes the appraisal, during which time the home will be closely evaluated to determine its true market value. This protects you from overpaying on a home and your lender from taking on an overly-risky loan, and it’s one of the last obstacles before you’re good to close.
Closing
On average, you can expect to close on a home in Florida about 20 to 30 days after an accepted offer. If you’ve been approved for first-time buyer down payment or closing cost assistance via a soft second mortgage, you will sign for that as well at closing. Talk to your agent ahead of time if you have any questions about what the closing process looks like for first-time buyers or what you can do to make it go as smoothly as possible.
Explore the Best First-Time Homebuyer Programs in Florida with Alex Doce
What Florida first-time homebuyer program is right for you? Let’s find out!
You may qualify for a first-time buyer program in Florida if you have never owned a home before or if you have not owned a home in the past three years. And if you do, you could have access to grants, lower costs, more flexible income requirements, and extra support – all things with a ton of value for new buyers.
Find out if you qualify. Contact Alex Doce of The Doce Mortgage Group today for more information on first-time homebuyer assistance in Florida and a free mortgage quote.
