Want to buy a home in Florida but worried about the hurdle of a down payment? With down payment assistance programs you can pay as little as $0 upfront toward your home purchase, with many programs offering added perks like low credit score requirements, no income restrictions, no requirements to be a first time homebuyer and forgivable loan terms.
Keep reading to learn how to apply for down payment assistance in Florida, including what programs are available and how they work.
What is the Down Payment on a House?
Your down payment is the amount of money you pay toward your new home’s principal at closing. It is not looped into your mortgage, which means you have to come up with the cash yourself.
Many lenders require down payments because it lowers their own risk. For a conventional loan, you’ll usually owe 3% to 20% of your home’s purchase price at closing, in addition to other closing costs. Some types of loans offer lower down payment requirements, such as FHA loans and zero-down VA loans.
What is Down Payment Assistance?
Down payment assistance (DPA) provides loans or grants for use toward the down payment and/or closing costs on a home purchase.
Some need-to-know specifics of these types of programs include:
- Eligibility based on household income, credit score, and homebuyer status
- Assistance may be limited to certain locations or types of properties
- Programs for U.S. citizens, permanent residents, and other legal residents
- Potential for lower interest rates or forgivable terms
Financial aid programs like DPA make homeownership much more accessible for low-to-moderate-income buyers. Instead of owing 3% to 20%+ of your home’s price in cash at closing, you can get a second loan that covers all or some of that amount. You may even qualify for a grant, which does not have to be repaid.
Overview of Florida Down Payment Assistance Programs
Which Florida down payment assistance option is right for you depends on where you live, what your current finances are like, and what type of buyer you are, and may be limited based on your lender and the original type of mortgage you take out (FHA, conventional, VA, USDA, etc.).
HomeZero Program
With the HomeZero program, you can get 100% financing for the purchase of a qualifying Florida house and pay zero dollars at closing. May be structured as a grant or an interest-free second loan for use toward down payment and closing costs. No need to be a first time homebuyers and allowable with FICO scores as low as 580.
Florida Assist Second Mortgage Program (FL Assist)
Florida Assist provides up to $10,000 in down payment assistance for first-time Florida homebuyers. There is no interest on the loan, and it only has to be paid back once you sell, transfer, or refinance your original loan.
Florida Homeownership Loan Program (FL HLP)
Up to $10,000 in down payment assistance via a 15-year loan with a 3% fixed interest rate. If you sell, move, transfer, or pay off your home before the 15 years is up, the loan is due in full.
HFA Preferred Loans
Provides 3%, 4%, or 5% of the loan amount in a second mortgage for use toward a down payment and/or closing costs. After 10 years of payments, the remaining loan balance will be forgiven.
Florida Hometown Heroes Program
Offers down payment and closing cost assistance of up to 5% of the original loan for qualifying full-time workers in Florida. Loans are interest-free, with payment deferred until the original loan is paid off, transferred, sold, or refinanced.
Step-by-Step Guide: How to Apply for Down Payment Assistance in Florida
Step 1: Assess Your Finances – Review your income, expenses, and credit score to determine how much home you can afford and what type of financial assistance you may need in order to do it.
Step 2: Research Available Programs – Explore available Florida DPA programs on your own, or speak to a mortgage broker for a more personalized overview of what you may qualify for.
Step 3: Get Preapproved for a Mortgage – A mortgage pre-approval ensures you know the exact amount of financing you’ll get before you make an offer, including any down payment assistance. It also makes you a more competitive buyer. Work with a lender who is experienced in DPA programs to ensure you find your best fit.
Step 4: Complete a Homebuyer Education Course – Many DPA programs in Florida require that at least one borrower on the loan takes a homebuyer education class.
Step 5: Submit Your Application – You can apply for down payment assistance through specified lenders or agencies. Gather necessary documents like income verification and your credit report before applying, and make sure the information you provide is fully accurate.
Get Help Applying for Down Payment Assistance
If you’re ready to buy a house but don’t have enough in your savings or checking account for a down payment, a DPA program could be the lifeline you need.
Down payment assistance programs are incredibly popular in Florida, where each year, many thousands of homebuyers receive grants or loans of up to $35,000 toward the upfront costs of their home purchase. If you want to learn more, contact Alex Doce today for personalized mortgage advice and help searching and applying for down payment assistance in Florida – or fill out a form for a free mortgage quote.
