Florida Housing Finance Corporation’s Down Payment Assistance Offerings / At-A-Glance

These down payment assistance offerings fall under the FL Second Mortgage Programs, and borrowers could qualify for this loan through the FL Assist Second Mortgage (FL Assist) or the FL Homeownership Loan Program (FL HLP).

Below, we've discussed the various components of the FL Housing Down Payment Assistance Offerings: the program's requirements, repayment terms, rates, loan terms, and everything in between. Keep reading to get started.

Understanding the FL Housing Second Mortgage Programs

As highlighted above, Florida Housing offers two second-mortgage programs: the FL Assist and the FL HLP loans. Both these loans are meant to help eligible borrowers pay for property down payments, mortgage insurance premiums, cover closing costs and prepaids, or serve as first mortgage principal reduction.

The two second-mortgage loan vehicles serve similar purposes, but they offer different benefits. The FL Assist, for instance, offers up to $7,500 conventional loans and up to $10,000 for VA, USDA-RD, and FHA loans. This loan product is a 30-year, 0% interest deferred second mortgage loan that's non-amortizing. The FL Assist loan can be deferred but isn't forgivable. This loan only becomes payable in full if the property is sold, transferred to a different person, or the original owners cease to occupy the property. The repayment won't be deferred if the owners satisfy the first mortgage or refinance the property. With the FL Assist, you'll only pay the Recording Fee to process the entire down payment offering.

The FL HLP loan, on the other hand, offers up to $10,000 and is a 15-year, 3%, fully-amortizing second mortgage. This loan product comes with a monthly payment plan. Any unpaid balance of the loan becomes payable in full if the property is sold, transferred to other owners, or if the original owners cease to live in/occupy the property. To process the down payment under the FL HLP, you'll pay the recording fee, plus a $ 175 servicing fee that will reflect as an "investor servicing fee" on the second mortgage LE/CD.

These loan products cannot be combined with other FL Housing's down payment programs but are available to borrowers who qualify for the FL First Mortgage Programs. The latter include the following loan products:

• The FL First – This is a government-funded loan that offers qualifying borrowers a 30-year, fixed-rate mortgage.

• The FL HFA Advantage – This is a conventional loan product that provides qualifying borrowers a 30-year, fixed-rate mortgage. The FL HFA Advantage also offers eligible borrowers income at/below 80% of Area Medium Income (AMI) as determined by Freddie Mac.

• The FL HFA Preferred – This is a conventional loan product that offers qualifying borrowers a 30-year, fixed-rate mortgage. The loan also provides eligible borrowers with income at/below 80% of AMI as stipulated by Fannie Mae.

Down Payment Assistance Offerings Requirements

To qualify for the down payment second mortgage offerings, you'll need to meet some requirements. These include the first-time homebuyer requirement, the income limit requirements, the purchase price limits, among other conditions such as minimum FICO scores, FHA, and US Bank requirements. Here's a quick overview:

• First-time homebuyer requirement – you need to have shown no ownership interest in a primary residence during the three years before the date on which the mortgage loan is to be signed. However, two exceptions exist for this rule. The first exception is that you are a veteran who has served in active naval, military, or air service and was discharged or released under conditions deemed honorable. The second exception is that you are buying a property in a Federally Designated Targeted Area.

• Income limit requirements– your household income should not exceed the maximum income limit for the county in which the property being purchased is located. There are several factors used to determine the income of your household. First, you sum up your income (the borrower), your spouse's income, and the income of any occupant of age 18 years. Similarly, all income sources (for all the occupants, age 18 and above) from a job, business, interest, dividends, pensions, child support, etc., are considered when calculating the household income.

• Purchase Price Limits – Here, the contracted purchase price should not exceed the purchase price limits for the county where the property is located. Simply put, you can only buy a property in a given county using the FL Bond Loan if the price of that property doesn't exceed a predetermined amount.

• Other Requirements – To qualify for FL second mortgage loans that allow you to pay the property's down payment, you'll need to satisfy other requirements. These include a minimum FICO score of 640, a FICO score of 660 for FHA loans, and any other provisions imposed by FHA and the US Bank.

Loan Closing Information

Before you can successfully close your new home, there is a couple of paperwork and documentation you'll interact with. One such document is the LE/CD (loan estimate/closing disclosure) settlement form.

This document should be filled out before finalizing the purchase of the property.

FL Housing requires lenders to provide loan disclosures from their own Loan Origination Software (LOS). The latter is a mortgage software solution that compiles mortgage transactions from origination to post-closing. It helps support the loan application and processing throughout the mortgage life cycle.

Similarly, FL housing and the eHousingPlus don't provide the TRID forms, which are designed to streamline your understanding of the mortgage and loan details in an easy-to-understand format. TRID stands for TILA-RESPA Information Disclosure. It's a combination of TILA (Truth in Lending) disclosure and RESPA (Real Estate Settlement Procedure Act) guidelines. Lenders are therefore tasked with providing all these disclosures and educating borrowers about the various loan products.

Another thing to keep in mind is that Florida imposes a Documentary stamp tax as an excise tax on certain documents recorded, delivered, or executed within the state. Common examples include mortgages and promissory notes. On the other hand, intangible tax is imposed on obligations to pay the mortgage and any money involving real estate.

That said, FL's First and Second notes and mortgages are exempt from the Documentary Stamp and intangible Taxes. The state issues a directive to settlement agents and title companies noting that all FL Housing Second mortgages are exempt from the two taxes.

Title Insurance and Power of Attorney

Title insurance helps protect buyers and lenders from financial loss due to property ownership issues, such as defects in a title to the property. Most homebuyers will opt for a title insurance policy to help cover numerous risks like incorrect ownership, falsified documents, and flawed records. However, with the FL Housing Second Mortgages, title insurance is strictly prohibited.

Another legal provision that's available to property owners is the Power of Attorney. The latter is a useful yet limited legal document that gives you (the property owner) the option to grant someone else the authority to buy or sell a property on your behalf.

With the FL Bond Loan Programs, the Power of Attorney is permitted but under certain conditions. For instance, you must meet the FHA, VA, USDA, or GSE requirements, as well as any requirements stipulated by the US Bank. Those in active military duty should provide an "Alive and Well" letter. Similarly, lenders should contact the closing agents/title company for information regarding Power of Attorney (POA) requirements in the State of Florida.

Bottom Line

The FL Housing down payment offerings provide borrowers with the money they need to make the initial payment before buying their dream home on credit. These offerings fall under the FL Second Mortgage loans, and they come with specific requirements just like any other loan product under the FL Housing Homebuyer Loan Programs.