When you begin the process of purchasing your first home in the Sunshine State, you’ll quickly learn there are many factors affecting your ultimate decision. For example, the type of mortgage loan you qualify for will play a significant role in determining your maximum budget and/or the type of home you'll be able to buy, which will in turn, dictate the neighborhoods you look in. It’s critical, therefore, to educate yourself on the various loan options and programs available to first-time home buyers. This way, you’ll reap the most benefits.
Some of the best first-time home buyer programs in Florida include:
HFA Preferred™ Mortgage
The Housing Finance Agency (HFA) Preferred™ Mortgage is a product of the Federal National Mortgage Association (Fannie Mae), a U.S. government-sponsored financing source for mortgage lending companies.
“This mortgage product is designed to serve low- to moderate-income borrowers and can help you reach growing market segments and ramp up your business,” states Fannie Mae's HFA fact sheet.
Several key benefits include a low down payment—in fact, it could be as low as 3 percent—as well as cancellable mortgage insurance (although there are restrictions). Furthermore, a borrower's geographic region won’t necessarily restrict the amount of funding he/she could receive.
Florida Housing Mortgage Credit Certificate (MCC) Program
The Florida Housing MCC Program is a state program that could help first-time home buyers save money in the long run. It was developed by the Florida Housing Finance Corporation (FHFC), which is also referred to as Florida Housing. This cooperative was established by the state legislature, as its official website explains, to make it easier for Florida residents to purchase a home.
“With the MCC Program, the homeowner may claim between 10 to 50 percent of their mortgage interest each year as a FEDERAL TAX CREDIT on their IRS tax return,” continues the FHFC. “Each year, a homeowner may claim a dollar-for-dollar reduction of income taxes owed thereby reducing the amount of federal taxes paid.”
However, like any other loan program, there are some requirements and restrictions. For instance, the funds received must be used to buy a home that will be used as a primary residence.
Available nationwide, FHA loans hold significant benefits for Florida first-time home buyers. Insured by the Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD), FHA loans are ideal for borrowers who may not meet the requirements for conventional loans, specifically pertaining to credit score and down payment. In fact, those who don’t have strong enough credit for other loans could still qualify for an FHA loan, and only be required to pay 10 percent down. There are even instances in which borrowers may end up paying as low as 3.5 percent down on a property, as opposed to a conventional mortgage loan, which typically expects borrowers to pay 20 percent down.
Similar to FHA loans, VA loans—insured by the U.S. Department of Veterans Affairs—are accessible nationwide. First-time home buyers eligible for this loan must be service members or veterans. Surviving spouses may also qualify.
“Your length of service or service commitment, duty status and character of service determine your eligibility for specific home loan benefits,” outlines the VA.
Those who qualify will likely pay lower interest rates. They also won’t have to worry about any private mortgage insurance (PMI) requirements.
Contour Mortgage has been assisting home buyers for more than two and a half decades. With a location in Boca Raton, we’re dedicated to helping Florida residents purchase their first home. Contact us, today.