Florida First-Time Home Buying Assistance Programs & Grants for 2024

Florida First-Time Home Buying Guide

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    By Walecia Konrad

    (Last Updated – 03/2024)

    Florida’s fast-growing population, robust job growth, and new industries all make for a hot real estate market. Home prices increased 3.5% to an average value of $388,454 vs. the national average of $342,941 (rising 3.1%), according to Zillow.

    For those who are looking to break into the housing market, there’s help available. For those who qualify, the state offers programs to assist with down payment, mortgage, and closing costs. Here, take a look at some of the options available.

    Florida Programs for First-Time Homebuyers

    The Florida Housing Finance Corporation offers first-time buyers a variety of assistance programs which typically include homebuyer education classes. This can help buyers understand how much mortgage they can afford and how the lending and closing processes work.

    Here are details regarding the programs.

    1. Florida First

    This program offers 30-year fixed-rate FHA, VA, and USDA government-backed loans as well as conventional loans that can be paired with Florida Housing’s down payment assistance second mortgages. (See below for details.)

    The housing finance agency conventional loans may have lower mortgage insurance premiums than the federal government loans. Single-family homes, townhomes, approved condos, two- to four-unit homes with the buyer residing in one of the units, modular homes, and mobile homes are allowed.

    Buyers must have a credit score of at least 640 and meet the income and purchase price limits in the county where the home is located.

    2. Florida Assist Second Mortgage

    This program offers up to $10,000 for down payment and closing costs via a 0% interest deferred second mortgage to be used only with a Florida Housing first mortgage.

    The second loan is not forgivable, but repayment is deferred until the home is sold, the borrower moves, or the first mortgage is refinanced. Borrowers must meet the same requirements as they do for the Florida First mortgage.

    3. HFA Preferred and HFA Advantage Plus Second Mortgage

    These forgivable second mortgages allow participants to borrow 3%, 4%, or 5% of the total loan amount for down payment and closing costs. There are no payments, and the loan is forgiven at 20% a year over a five-year term.

    4. FL HLP Second Mortgage

    The Florida Homeownership Loan Program (FL HLP) offers a loan up to $10,000 for down payment and closing costs with a 3% interest rate. The loan is paid over a 15-year term, unless the borrower moves, sells, or refinances, at which time the loan must be paid back in full.

    Because there is a monthly payment associated with this loan, it will be considered in an applicant’s debt-to-income ratio when applying for a first mortgage.

    5. Local Homebuyer Assistance Programs

    The Hometown Heroes program supports community workers such as law enforcement officers, firefighters, EMTs, educators, health care professionals, and child care operators or employees can receive up to 5% of the first mortgage amount (up to $35,000) in down payment and closing cost assistance if they are first-time homebuyers who meet income and purchase price limits and have a credit score of at least 640.

    Military members and veterans are also eligible, and are exempt from the first-time homebuyer requirement.

    The assistance takes the form of a 0% interest, 30-year deferred second mortgage that must be repaid if the borrower sells the home, moves, or refinances the first mortgage.

    Hometown Heroes can also offer lower-than-market rates on an FHA, VA, USDA, Fannie Mae or Freddie Mac first mortgage and reduced upfront fees.

    6. Local Homebuyer Programs

    There are some city and area-specific homebuyer programs in areas such as Jacksonville that help first-time buyers in Florida. Be sure to check with the county, city, and local home advocacy organizations where you are buying for other assistance opportunities. The U.S. Department of Housing and Urban Development (HUD) lists contacts by state, region, and county .

    💡 Quick Tip: SoFi’s award-winning mortgage loan experience means a simple application — we even offer an on-time close guarantee. We’ve made $7.5 billion in home loans so we know a thing or two about what makes homebuyers happy.‡

    Who Is Considered a First-Time Homebuyer in Florida?

    The Florida Housing Finance Corporation is a 40-year-old state agency that provides affordable housing opportunities to first-time and low- to moderate-income homebuyers looking for their place in the Sunshine State.

    It considers anyone who has not owned a primary home in the past three years a first-time homebuyer.

    In some targeted areas of the state, repeat buyers may also apply for first-time homebuyer programs. And typically veterans need not be first-time buyers.

    Recommended: Understanding the Different Types of Mortgage Loans

    How to Apply to Florida Programs for First-Time Homebuyers

    The Florida Housing website includes the Homebuyer Loan Program Wizard , an interactive tool that can help you determine your eligibility for Florida first-time homebuyer programs. Florida Housing is not a lender, but the Wizard tool provides a list of approved lenders by location.

    It is especially important for first-time buyers, who may be unfamiliar with the mortgage lending process, to compare interest rates, fees, and other costs among lenders to find the most affordable loan. A first-time homebuyer guide can also be helpful in providing a foundation for your property pursuits.

    Federal Programs for First-Time Homebuyers

    Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.

    The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

    If you qualify for one of these loans through Florida Housing, that’s advantageous. If not, you can apply for them on your own. Notice that the credit score requirement could be higher with Florida Housing.

    Federal Housing Administration (FHA) Loans

    The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.

    In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 57% in some cases, vs. a typical 45% to 50% maximum for a conventional loan.

    Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.

    FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. Here’s an example:

    •   For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137.

    You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.

    Freddie Mac Home Possible Mortgages

    Very low- and low-income borrowers may make a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

    The Home Possible mortgage is for buyers who have a credit score of at least 660.

    Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

    Fannie Mae HomeReady Mortgages

    Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.

    For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .

    Fannie Mae Standard 97 LTV Loan

    The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.

    Department of Veterans Affairs (VA) Loans

    Active-duty members of the military, veterans, and eligible family members may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.

    Another benefit of VA loans is that they do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.

    Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.

    💡 Quick Tip: A VA loan can make home buying simple for qualified borrowers. Because the VA guarantees a portion of the loan, you could skip a down payment. Plus, you could qualify for lower interest rates, enjoy lower closing costs, and even bypass mortgage insurance.†

    Native American Veteran Direct Loans (NADLs)

    Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee. You can learn more by emailing [email protected].

    US Department of Agriculture (USDA) Loans

    No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.

    The USDA also directly issues loans to people with low- and very low-incomes. For loan basics and income and property eligibility, head to this USDA site .

    HUD Good Neighbor Next Door Program

    This program helps police officers, firefighters, EMTs, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.

    Florida First-Time Homebuyer Stats for 2024

    Here’s a snapshot of Florida homebuyers:

    •  Median home value: $388,454

    •  3% down payment: $11,653.62

    •  20% down payment: $77,690.80

    •  Average credit score (vs. 714 nationwide): 689

    Financing Tips for First-Time Homebuyers

    In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:

    •  Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past three years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.

    •  Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.

    •  401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 or 25 years to repay.

    •  State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.

    •  Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.

    •  Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.

    Recommended: Six Simple Ways to Reduce a Mortgage Payment

    The Takeaway

    Some first-time homebuyers in the Sunshine State will qualify for assistance from Florida Housing. These programs can help lower costs of a down payment, mortgage, and closing costs. Other Florida buyers may turn to government-backed or conventional loans on their own.

    Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

    SoFi Mortgages: simple, smart, and so affordable.

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    Should I take first-time homebuyer classes?

    Yes, this information can help newcomers have a successful home-buying experience. Indeed, these classes are required for most government-sponsored loan programs.

    Do first-time homebuyers with bad credit qualify for homeownership assistance?

    Many government and nonprofit homeowner assistance programs are available to people with low credit scores. That said, almost any lending program has credit qualifications.

    Is there a first-time veteran homebuyer assistance program in Florida?

    Yes. The new Hometown Heroes Housing Program provides reduced-rate first mortgages and 0% interest deferred second mortgages for a down payment or closing costs. Military members and vets need not be first-time buyers. Florida veterans may also may find options in the federal Department of Veterans Affairs and Native American Veteran Direct Loan programs listed above.

    What credit score do I need for first-time homebuyer assistance in Florida?

    Programs administered by the Florida Housing Finance Corporation require a credit score of 640.

    What is the average age of first-time homebuyers in Florida?

    While the average age of first-time homebuyers in Florida can be hard to find, the average age nationally is 35.

    Photo credit: iStock/benedek

    *SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

    SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will provide you $2,000.^ Terms and conditions apply. This Guarantee is available only for loan applications submitted after 6/15/22 for the purchase of a primary residence. Please discuss terms of this Guarantee with your loan officer. The property must be owner-occupied, single-family residence (no condos), and the loan amount must meet the Fannie Mae conventional guidelines. No bank-owned or short-sale transactions. To qualify for the Guarantee, you must: (1) Have employment income supported by W-2, (2) Receive written approval by SoFi for the loan and you lock the rate, (3) submit an executed purchase contract on an eligible property at least 30 days prior to the closing date in the purchase contract, (4) provide to SoFi (by upload) all required documentation within 24 hours of SoFi requesting your documentation and upload any follow-up required documents within 36 hours of the request, and (5) pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. The Guarantee will be void and not paid if any delays to closing are due to factors outside of SoFi control, including delays scheduling or completing the appraisal appointment, appraised value disputes, completing a property inspection, making repairs to the property by any party, addressing possible title defects, natural disasters, further negotiation of or changes to the purchase contract, changes to the loan terms, or changes in borrower’s eligibility for the loan (e.g., changes in credit profile or employment), or if property purchase does not occur. SoFi may change or terminate this offer at any time without notice to you. ^To redeem the Guarantee if conditions met, see documentation provided by loan officer.

    †Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

    ¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

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    Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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