18 First-Time Florida Home Buyer Grants and Programs for 2024
In Florida, as of 2024, first-time homebuyers have access to 18 different programs that provide alternatives to the traditional 20% down payment. These programs include cash grants, tax credits, and reduced mortgage rates, offering practical solutions for those looking to purchase their first home.
This guide outlines each program's key benefits and eligibility criteria, simplifying the journey from renting to homeownership.
Below is a compilation of first-time home buyer programs, grants, and mortgages available for Florida residents in the year 2024.
What is a First-Time Home Buyer Program?
In Florida, first-time homebuyer programs offer a variety of mortgage loans and incentives, making homeownership more accessible. Supported by state government entities and both public and private banks, these programs include:
Mortgages with low down payments as little as 5%.
Mortgages with special interest rate discounts for first-time buyers.
Mortgages with more relaxed approval criteria for first-time buyers.
- Mortgages offering favorable terms based on the buyer's profession.
First-time buyers can apply for these mortgages online or in person, with many mortgage companies providing quick approval decisions.
Most Used First-Time Home Buyer Programs
The U.S. government endorses nine first-time homebuyer mortgage programs, each supporting over a million loans for first-time buyers.
Florida Hometown Heroes Program
The Florida Hometown Heroes Housing Program provides down payment and closing cost assistance to first-time, income-qualified homebuyers who work or serve in the Florida community where the home is being purchased.
The Florida Hometown Heroes Program offers substantial benefits and assistance for first-time homebuyers who work or serve in their local communities.
Key benefits of the program include up to $35,000 in assistance for down payments and closing costs, along with a lower first mortgage interest rate for eligible borrowers.
Additionally, no monthly mortgage insurance premiums (PMI) benefit those opting for FHA loans. This program is specifically tailored for purchasing a primary residence in the community where the borrower works or serves.
To be eligible, applicants must be first-time homebuyers employed in or serving the community where they intend to purchase the home. They must meet certain income limits based on household size and location and have a credit score of at least 620.
FHA Loan Program
FHA loans, backed by the Federal Housing Administration, are popular for homebuyers, particularly those purchasing their first home.
They require a lower minimum down payment, as low as 3.5%, and are more accessible to buyers with lower credit scores than conventional loans.
FHA loans also allow for higher debt-to-income ratios, providing more flexibility in qualifying for a mortgage. Additionally, they offer the option of a lower interest rate, making them an attractive option for those looking to minimize upfront costs and monthly payments.
The Good Neighbor Next Door (GNND) Program
The Good Neighbor Next Door (GNND) Program is a U.S. Department of Housing and Urban Development (HUD) initiative to encourage community revitalization and homeownership.
This program offers significant financial assistance to eligible teachers, law enforcement officers, firefighters, and emergency medical technicians (EMTs) when they purchase homes in designated revitalization areas.
Key features of the GNND Program include providing eligible participants with a substantial discount of 50% off the list price of homes located in these areas. In exchange, participants must commit to using the home as their sole residence for at least 36 months.
This commitment is part of HUD's effort to strengthen communities and foster a sense of investment and stability in these areas.
The VA mortgage is a 100% mortgage guaranteed by the Department of Veterans Affairs and is specifically designed for active-duty military members, veterans of the armed services, and surviving spouses.
VA loans do not require mortgage insurance and have a minimum credit score requirement of 620. Eligible buyers can utilize VA loans to purchase residential properties with 1-4 units across all 50 states and U.S. territories.
The USDA mortgage is a 100% mortgage supported by the U.S. Department of Agriculture. It is specifically designed for homes in non-urban communities, which account for 91 percent of the United States land mass.
USDA mortgages are an excellent option for buyers with a minimum credit score of 580, as they allow 100% financing. Furthermore, USDA mortgage rates are frequently the most affordable low-down-payment mortgage loans.
FHFA First-Time Home Buyer Discount
In 2024, first-time homebuyers will receive a discount on interest rates for their loans from the Federal Housing Finance Agency (FHFA) to make housing more accessible. To be eligible, you must meet these criteria:
Utilization of a conventional, 30-year fixed-rate mortgage.
- Income at or below the average household income for their area.
First-time homebuyers who are eligible may receive automatic mortgage rate discounts of up to 1.75 percentage points on conventional 30-year fixed-rate mortgages, which can reduce monthly mortgage payments by up to 20%.
The amount of mortgage rate discounts for first-time homebuyers will vary depending on factors such as credit score, the amount of the down payment, the type of property, and the loan program.
HomeReady is a mortgage program that provides lower rates and costs to low- and moderate-income home buyers and a 3% down payment option. To be eligible for HomeReady, you must have a minimum FICO score of 620.
When buying a HomePath property with HomeReady, you can get a $500 credit for closing costs. The HomePath Ready Buyer program also offers a 3% cash contribution to cover your mortgage closing expenses.
Fannie Mae's Standard 97% LTV Loan
This program is designed for first-time homebuyers who might not have a large down payment. The Standard 97% LTV (Loan-to-Value) Loan by Fannie Mae allows buyers to finance up to 97% of their home purchase, meaning they only need to put down 3%.
This program is similar to the HomeReady loan but does not have as many income restrictions. It requires at least one borrower to be a first-time homebuyer and has a minimum credit score requirement, which can vary depending on the lender.
Home Possible is a mortgage program for low and moderate-income home buyers that allows a 3% down payment, similar to HomeReady. It provides reduced mortgage rates and costs and includes fixed-rate and adjustable-rate loan options.
Home Possible requires a minimum FICO score of 660 to qualify. It is an excellent choice for multi-generational households looking for a mortgage with a low down payment.
What Is a First-Time Home Buyer Grant?
A first-time homebuyer grant is a monetary award given to new homeowners during the home purchase process. Grants are awarded at the federal, state, and local government levels, as well as by charitable organizations and housing foundations.
The good news is that first-time homebuyers do not have to repay these grants, as they are considered contributions to homeownership, considered a public good.
Studies indicate that making $10,000 cash grants available to first-time homebuyers can increase homeownership rates in an area by up to 34%.
As new homeowners move into a neighborhood, several positive impacts can be observed:
The neighborhood benefits from increased tax income, which can help fund community services and improvements.
Local businesses can thrive as new homeowners increase their spending in the area.
- Families can establish generational wealth through real estate ownership, as homes tend to appreciate over time.
Most Used Grants for First-Time Home Buyers
Congress recently crafted ten bills to give homebuyers a leg up, offering tax credits and grants. For example, the $15,000 First-Time Home Buyer Tax Credit and the LIFT Act for ultra-low mortgage rates are just two of the benefits that could be yours.
So don't delay - investigate if you qualify for any first-time home buyer grants today.
The National Homebuyers Fund
Homebuyers can take advantage of the National Homebuyers Fund, a non-profit public benefit corporation that offers cash grants up to 5 percent of the purchase price.
To be eligible, you must commit to living in your new home for at least five years. Sadly, renters cannot apply directly - only their mortgage company can apply on their behalf.
Forgivable mortgages are a type of loan that can be canceled after a homeowner meets certain conditions, such as making regular payments for an agreed-upon period.
In this scenario, a first-time buyer would use a conventional mortgage to purchase a home and make the down payment with a forgivable loan of $15,000, for example.
Suppose the buyer resides in the home and meets their payment obligations for the agreed-upon term, usually five years. In that case, the lender will forgive the $15,000 mortgage and release their claim on the property's title.
Forgivable mortgages are a popular tool governments leverage to promote homeownership, neighborhood development, and local investment - all necessary for a thriving economy.
If you have ever come across cities offering incentives for individuals to move there, forgivable mortgages are likely integrated into that strategy.
Discounted Homes from HUD
The Good Neighbor Next Door Program (GNND) by the U.S. Department of Housing and Urban Development (HUD) offers repossessed homes to first-time buyers at a 50% discount.
This program is designed for teachers, firefighters, law enforcement officials, and emergency medical technicians who want to reside in the community where they work. To apply for GNND, one can search for eligible homes on the HUD website and apply for a mortgage online.
Closing Cost Assistance Programs For First-Time Buyers
Closing cost assistance programs are designed to provide financial support to home buyers by covering all or a portion of their closing costs, such as title expenses, transfer taxes, and mortgage fees.
To find available closing cost assistance programs, potential buyers can check the National Council of State Housing Agencies website, which maintains an updated list of these programs.
However, it's important to note that buyers typically need to meet certain criteria, such as minimum credit standards and local income thresholds, and the homes they purchase must meet minimum safety and quality standards.
State and local governments often present cash grants to first-time home buyers, distributed on a first-come, first-served basis to make homeownership more accessible.
These grants can range from $500 to $50,000 and can be used for mortgage closing costs, lower mortgage rates, or provide down payment help.
To be eligible for these grants, home buyers usually need to have an income within the lower two quartiles of the area, as well as a minimum credit score.
To find housing grants and programs offered in your area, you can check out your municipality's website, search for "housing assistance" or "housing grants," and review the requirements of down payment assistance programs.
Down Payment Loans
Down payment loans are loans from non-profit and community organizations that replace a home buyer’s down payment with borrowed cash. Interest rates on these loans are usually in the one-percent range and amortized over 30 years for ultra-low payments.
To see if down payment loans are available in your area, contact your municipal government's housing administration, which can offer local connections.
However, some mortgage programs do not allow down payment loans, so buyers should check with their lenders before applying.
Deferred mortgages allow borrowers to delay repayment until they sell or refinance their home. Municipal governments and local foundations often offer them.
They can provide up to $25,000 in funding for first-time homebuyers who meet certain criteria, including having an income below the area average and a credit history with a track record of on-time payments.
Congress & First-Time Home Buyer Programs
Every session, Congress supports first-time home buyers by introducing legislation to assist renters in becoming homeowners. In the current session, Congress is expected to present two essential bills - a tax credit and a cash grant.
The $15,000 First-Time Home Buyer Tax Credit - An Overview
The proposed $15,000 First-Time Home Buyer Tax Credit aims to support individuals purchasing their first home. This program, inspired by a similar initiative from 2009, is designed to ease the financial burden for first-time homeowners.
Eligibility - Targets first-time homebuyers.
Refundable Credit - Offers a tax credit of up to $15,000.
Purchase Period - Applicable for homes bought after December 31, 2020.
- Tax Deductions - Includes the possibility of claiming mortgage interest and credits for home improvements.
This tax credit is a financial tool to make homeownership more accessible for first-time buyers, potentially impacting the housing market significantly.
The $25,000 Down Payment Toward Equity Cash Grant - Details
In addition to the tax credit, the Down Payment Toward Equity Act proposes further financial assistance. This grant is aimed at first-generation home buyers and those from disadvantaged backgrounds, offering up to $25,000 to support home purchases.
Elements of the Grant:
Amount - Up to $20,000 for first-generation buyers, plus an additional $5,000 for buyers from disadvantaged backgrounds.
Usage - Covers down payments, closing costs, and real estate taxes and enables lower mortgage rates.
- Legislative Status - Currently proposed, with expectations of reintroduction in the current Congressional session.
This act addresses disparities in home ownership and provides targeted financial support to those who may face greater barriers in the housing market.
The $15,000 First-Time Home Buyer Tax Credit and the $25,000 Down Payment Toward Equity Cash Grant are significant legislative proposals to facilitate home ownership.
If passed, these initiatives could offer substantial financial aid to first-time and disadvantaged home buyers, potentially altering the housing market landscape.
As these proposals progress through the legislative process, they represent important steps toward more accessible home ownership.
MakeFloridaYourHome FAQ Section
These are some of the most frequently asked questions by MakeFloridaYourHome buyers.
What Defines a First-Time Home Buyer?
A first-time home buyer has not owned and occupied a primary residence in the past three years. This definition is based on the date of purchase.
It's important to note that individuals who haven't owned a home for more than three years could still be considered first-time buyers, and there may be other exceptions to this rule.
Which Program is Most Popular Among First-Time Home Buyers?
The Federal Housing Administration (FHA) loan is the most favored among first-time home buyers. This loan, backed by the government, offers low-down-payment options and flexible credit score requirements.
FHA loans typically have lower closing costs than other mortgage types, making them particularly appealing to first-time buyers. Other popular choices include USDA Rural Development and VA loans.
What are the Key Benefits of FHA Loans?
FHA loans offer several advantages:
Lower Interest Rates - Generally, FHA loans have lower interest rates than conventional mortgages.
Minimal Down Payment - These loans require as little as a 3.5% down payment.
Flexible Credit Requirements - FHA loans are accessible to those with less-than-perfect credit scores.
- Mortgage Insurance - This feature protects lenders against losses if the borrower defaults, broadening eligibility for potential borrowers.
How Do Down Payment Assistance Programs Work?
Down Payment Assistance Programs (DPAs) provide cash grants to first-time home buyers, typically on a first-come, first-served basis.
These grants range from $500 to $50,000 and can be used for closing costs, reducing mortgage rates, or aiding with the down payment.
Eligibility often hinges on having an income within the lower two quartiles of the area, as well as a minimum credit score.
To find local housing grants and programs, explore your municipality's website or search for "housing assistance" or "housing grants."
Are There Loan Options That Forgive the Down Payment?
Yes, forgivable mortgages are loans that can be canceled if the homeowner meets certain conditions, like consistent payments over a set period, often five years. These loans are used as a strategic tool by governments to encourage homeownership and local investment.
For example, a buyer might use a conventional mortgage for the home purchase, supplemented by a forgivable loan of $15,000 for the down payment. If they meet the repayment conditions, the loan is forgiven.
What is the Good Neighbor Next Door Program?
The Good Neighbor Next Door (GNND) Program is a HUD initiative offering a 50% discount on homes in revitalization areas to eligible teachers, law enforcement officers, firefighters, and EMTs.
Participants must commit to living in the home for at least 36 months. This program aims to foster community development and provide affordable homeownership opportunities to public servants.
Can Closing Costs Be Assisted Through Programs?
Yes, closing cost assistance programs help cover a portion or all closing costs, such as title fees, transfer taxes, and mortgage expenses.
Eligibility typically requires meeting credit and income thresholds, and the purchased homes must adhere to certain safety and quality standards.
Potential buyers can find these programs through resources like the National Council of State Housing Agencies.
What Should I Know About Deferred Mortgages?
Deferred mortgages allow for the postponement of repayment until the home is sold or refinanced.
Local governments and foundations often offer these loans up to $25,000 for eligible first-time buyers. Eligibility criteria usually include an income below the area average and a consistent credit history.
Are There Any New Legislative Initiatives for Home Buyers?
Congress is expected to introduce two major bills - the $15,000 First-Time Home Buyer Tax Credit and the $25,000 Down Payment Toward Equity Cash Grant. The tax credit aims to ease financial burdens for first-time homeowners.
At the same time, the cash grant targets first-generation buyers and those from disadvantaged backgrounds, offering significant financial support for home purchases.
Understanding these programs and their benefits can significantly impact your journey toward homeownership in Florida. It's crucial to stay informed and explore all available options to make the best choice for your circumstances.
With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.
About Author - Phil Ganz
Phil Ganz has over 20+ years of experience in the residential financing space. With over a billion dollars of funded loans, Phil helps homebuyers configure the perfect mortgage plan. Whether it's your first home, a complex multiple-property purchase, or anything in between, Phil has the experience to help you achieve your goals.