Residents living in certain regions designated as federally targeted areas are exempt from the primary eligibility criterion, which is the first-time homebuyer requirement. Before we look at what federally targeted areas mean or explore more about homebuyer requirements, let's first have a quick overview of the Florida Homeownership Loan Program.
More about Florida Homeownership Loan Program
The FL Homeownership Loan Program (HLP), popularly known as the Florida Bond Program, is a homebuyer assistance vehicle run by the Florida Housing Finance Corporation. The latter coordinates first-mortgage loans and down payments as well as closing assistance second-mortgage loans to eligible first-time homeowners via a network of vetted and approved lenders.
It's worth noting that these aren't forgiveness loans or government relief loans. Rather, they are special loans with low or zero interest rates underwritten, closed, and funded by different lenders. The lenders deliver the closed loans, be it the first mortgage & FL Assist or the HLP second mortgages, to the US Bank Home Mortgage, who then purchase these loans.
Types of Loans Offered Under the Florida Bond Program
There are three main types of loans offered by Florida Housing. These are first mortgage programs, the FL Homeownership Loan Program, and the FL Assist loans.
The last two loans are second mortgage programs that offer different benefits to the qualifying borrowers.
The First Mortgage programs are classified into three, i.e., two first-time mortgage government programs and one conventional loan program only for the eligible first-time homebuyers.
Here are the three classifications of First Mortgage Programs:
The FL First (GOVT) Program – offers an eligible borrower a 30-year fixed-rate loan. Those eligible for this program automatically qualify for the down payment assistance via the FL Assist and HLP Second Mortgage loan programs.
The Florida HFA Advantage Loan Program (Conventional Advantage Program) – offers an eligible borrower a 30-year fixed-rate loan. The borrower can also earn income at/below 80% of the Area Median Income (Freddie Mac) and automatically qualifies for the FL Assist and HLP Second Mortgage loan programs.
- The Florida HFA Preferred Loan Program (Conventional HFA Preferred) – offers an eligible borrower a 30-year fixed-rate loan with an income at/below 80% of Area Median Income (Fannie Mae). An eligible borrower automatically qualifies for the FL Assist and HLP second Mortgage Loan Programs.
Now that you know the different types of Florida Housing loans, let's look at the eligibility criteria or qualifications, particularly the first-time homebuyer requirement.
First Time Home Buyer Requirement
Residents living in Florida and who want to qualify for the low-interest, first-mortgage loan offered by the Florida Housing Finance Corporation must meet some minimum requirements. One of the eligibility criteria for the first and second mortgage programs is to be a first-time homebuyer or have no ownership interest in a primary home during the three years before the date the mortgage loan is signed.
The only two exceptions for this requirement are:
That said, there are several other requirements you'll need to meet before qualifying for the first mortgage programs. These include the income limit conditions, the purchase price limits requirements, and the other requirements such as minimum FICO scores, a month reserve, FHA requirements, etc. Let's now look at the second exception for the first-time homebuyer requirement, i.e., being a resident of any of 2016 federally designated targeted areas.
Living in Federally Designated Targeted Areas
Federally designated targeted areas are slow-economic growth areas in different states, counties, and cities recognized by the Federal Government. Most residents in such areas receive financial help and waivers to help qualify for government programs such as homeownership loans. A majority of the federally targeted areas receive their status after a federal census, which exposes the areas' economic challenges or when a disaster like a drought or a hurricane hits a particular state, county, or city.
In Florida, several areas are federally targeted due to the frequent hurricanes witnessed along the east coast. The sudden and frequent mass destruction of property and loss of livelihoods make those areas less attractive to investors and businesses. Hence they pose substantially low income compared to other areas within the city, country, or state.
The 2016 Federally Designated Targeted Areas affects 31 counties of the 67 FL counties, with most of the areas being located in Miami-Dade, Hillsborough, and Broward counties. Residents in these areas don't have to meet the first-time homebuyer requirement needed to qualify for the Florida Homebuyer Loan Programs.
To locate or check if you are in a federally targeted area, you'll need to know the census tract number. If you don't know the census tract number, you can use your street address to locate this location-specific number. Simply head to the HUD's QCT Map and enter the street address to check your property/street census tract. You can then compare your census tract number with that of 2016 federally designated targeted areas.