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What You Need to Know About Florida HFA Preferred Mortgages

The Florida Preferred Plus loan is a type of residential mortgage that allows Floridians to buy a home with a low-down payment and favorable interest rates while taking advantage of special benefits.

What is the Florida HFA program?

HFA refers to the housing finance agency in the state of Florida. They work together with mortgage lenders to offer low and moderate-income families a chance to get into a home with a minimal down payment.

The purpose of this program is to make it easier for these families to buy a home and give them an opportunity for better financial security and future investment.

Florida HFA has two programs - Preferred and Preferred Plus. Both are programs designed to help lower, and moderate-income families buy their first home.

The Florida HFA Preferred Conventional Mortgage offers a low fixed-rate loan with no monthly mortgage insurance (MI). It is available to qualified borrowers with income limits equal to or less than 120% of the area median income (AMI).

The Florida HFA Preferred Plus Conventional Mortgage offers a low fixed-rate loan with reduced monthly mortgage insurance (MI) premiums.

It is available to qualified borrowers with income limits equal to or less than 140% of the area median income (AMI).

How do I know if I am eligible for this loan program?

There are certain requirements that you must meet to be eligible for the Florida HFA program. You must have a minimum credit score of 640 on your FICO report.

You must be able to show proof of income. You must be purchasing a primary residence and not an investment property, and you cannot currently own any other residential property.

You must also take a homebuyer education course as part of the application process. You can check with your lender or use one of our online tools to see if you qualify before starting the loan process.

What are the income limits for the Florida HFA program?

The Florida HFA Preferred and Preferred Plus programs help low-to-moderate income families.

Income limits vary by county and household size, so please work with a lender to determine whether you meet the income requirements.

Is there an upfront fee or mortgage insurance premiums attached to these loans?

There is no cost to participate in Florida HFA Preferred or Preferred Plus programs. However, all mortgages insured by the Federal Housing Administration (FHA) require borrowers to pay mortgage insurance premiums.

As with other FHA loans, MIP is paid monthly as part of your regular housing payment and can be included in your closing costs (if you roll it into your loan) but never paid upfront.

HFA Preferred Florida

This is not a commitment to lend. Rates and fees are subject to change without notice. HFA Preferred is available only through participating lenders, approved by the Florida Housing Finance Agency.

Eligible Borrowers

HFA borrowers must meet one of the following criteria:

  • A resident of Florida for at least 12 consecutive months before closing.

  • U.S. citizen, permanent resident alien, or non-resident alien with an eligible visa type.

  • Active-duty military personnel (or spouse) assigned to a Florida military base, including Reserve and National Guard members.

  • Full-time faculty or staff member (or spouse) of a public or private university located in Florida.

  • Employee of a business located in Florida (or spouse) has been employed for at least two years as a full-time permanent employee and is being transferred or relocated to a new location in Florida.

Core Features

HFA Preferred mortgages are ideal for the purchase of primary residences.

The program may purchase new or existing homes, townhomes, condominiums, or manufactured homes built after June 15, 1976, and permanently affixed to land owned by the borrower.

Loan Terms - 30 year fixed; 5/1 (interest only for the first ten years); 7/1; 10/1 adjustable rate mortgages with 30 year payoff.

Minimum Credit Score - 640

Down Payment Assistance Program - Available, up to $15,000 based on availability.

Closing Cost Assistance Program - Available, up to $5,000 based on availability.

80% AMI insurance

Borrowers can enjoy reduced premiums if they are at or below 80% of their AMI.

This feature makes the HFA Preferred mortgage eligible for reduced MI premiums, resulting in lower monthly payments than conventional loans.

60-day purchase timeline

You must have purchased a house within the past 60 days before applying for the Preferred Mortgage program.

The 60-day purchase timeline means you have time to make improvements, and you must postmark the documents that support your application within this timeframe.

More liberal income and purchase price limits

Fannie Mae and Freddie Mac have strict income and purchase price limits, especially in more expensive areas of the country.

These restrictions do not bind the FHA loans so that more people become homeowners.

PMI not required

Mortgage insurance is required on all conventional loans with less than 20 percent down, but not on FHA Preferred loans.

No first-time homebuyer requirement

Non-repayable Grant option for down payment assistance (DPA) is available with the HFA Preferred (Conventional) conventional loan.

Down Payment Assistance

In addition to the benefits provided by HFA loans, the Florida Housing Finance Agency also offers several programs designed to assist first-time homebuyers specifically.

These programs offer lower down payment requirements and more flexible qualifying guidelines than conventional mortgage products.

HFA Proffered offers $7500 for second-time buyers under the Florida Homeownership Loan Program.

Closing costs

This program also comes with closing cost assistance in a second mortgage loan. You can use this for up to 4% of the first mortgage amount to help with closing costs and prepaids.

For example, if your first mortgage was for $200,000, you could get up to $8,000 in second mortgage funds from the lender to help with closing costs.

Interest Rate Incentives

The Florida HFA offers interest rate incentives to first-time homebuyers who use the Florida HFA Preferred Loan Program. The interest rate reduction may vary depending on the size of the down payment made.

For example, a buyer making a minimum down payment may receive an interest rate reduction of 0.250%, while a buyer making a 20% down payment may reduce 0.375%.

30 Year Fixed Rate

The Florida HFA Preferred Conventional Loan Program offers buyers the ability to obtain a 30-year fixed-rate mortgage at competitive interest rates.

A 30-year fixed-rate mortgage allows buyers to lock in their monthly housing payments for the entire term and provides them with long-term stability in their mortgage payments.

Comparing the Florida HFA Preferred to Conventional Loans:

  • The Florida HFA Preferred loan program offers a 30-year, fixed-rate mortgage.

  • The Fl HFA Preferred loan program has an affordable interest rate.

  • The loan program uses the "HomeReady" program income limits.

  • The closing costs of the Florida HFA Preferred are lower.

  • The FL HFA Preferred has less stringent credit underwriting requirements than conventional loans.

  • The Florida HFA Preferred requires you to take a homebuyer education class.

Happy young married couple sit on couch and look at mortgage document

What is the Florida Preferred Plus loan?

The Preferred Plus loan is an option for qualified borrowers who are looking to finance a primary residence in the state of Florida.

This loan allows you to make a down payment as low as 3 percent, and you can finance up to 97 percent of your home's purchase price.

This means you could get into your new home without having to bring thousands of dollars to the closing table.

Eligible properties

The Preferred Plus loan is available only on primary residences. That means you can't use it to buy a vacation home or investment property. The property must be in Florida, and it can be a single-family home, condo, or townhome.

You may also use it to build a new construction property if you have already secured financing for the land purchase through another lender.

Property that has had a foreclosure on, short sold, or owned by a corporate entity within the last seven years is not eligible.

The borrower must occupy the property as their principal residence, second home, investment property, and maybe a detached home; townhouse; condominium; cooperative unit; manufactured home, or modular home.

Eligible Borrowers

The Florida Preferred Plus loan program is ideal for borrowers purchasing or refinancing a home in Florida.

You do not have to be a first-time homebuyer (you can get up to 5% assistance with your second mortgage). It helps if you have good credit and money to put down, but exceptions exist.

If you're married, but only one spouse qualifies for the program, you're still eligible as long as you live together.

However, if you're separated or divorced, only one spouse can qualify for the loan.

If neither spouse qualifies, but one or both of your parents do, your parent can buy the home with funds from your IRA account as long as it's part of your divorce settlement.

Reduced Premiums

Borrowers below or at 80 AMI get to enjoy reduced mortgage premiums.

3%, 4%, or 5% of the loan is considered a forgivable second for closing costs and down payment.

Rate Lock Period

You can lock your rate for up to 90 days, but you must fund your loan within 60 days of your initial application.

This gives you the freedom to start your home search today without worrying about rates rising while you find the right home.

How much can I borrow?

With a full documentation requirement, you can borrow up to 80% of the sale price or appraised value, less the first mortgage balance.

If your LTV is greater than 80% but less than 90%, you will be required to purchase private mortgage insurance (PMI).

With a limited documentation requirement, you may borrow up to 75% of the sale price or appraised value, less the first mortgage balance.

If your LTV is greater than 75% but less than 90%, you will be required to purchase private mortgage insurance (PMI).

Common features - FL HFA Preferred and Preferred Plus

Loan Term

Both are 30-year fixed-rate loans. They afford borrowers long-term stability and consistent monthly payments for the life of their home loan.

Maximum Loan Amounts

The maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac are determined by the Housing and Economic Recovery Act of 2008.

Loan Limits

Loan limits can vary across Florida depending on the median area income level and average home prices in a particular county. In counties where homes are more expensive, higher loan limits will apply.

If you make less than 80% of the area median income, you can qualify for the Preferred Plus loan, which allows you to purchase a home with only 3% down (with private mortgage insurance).

If you make less than 120% of the area median income, you can qualify for the HFA Preferred loan, which allows you to purchase a home with only 3% down (with private mortgage insurance).


Both loans offer low-interest rates and reduced mortgage insurance premiums.

These rates are available because of a partnership between the Federal Housing Administration (FHA) and Florida Housing Finance Corporation (FHFC).

FHFC offers three different grants to help lower-income borrowers afford more homes. These grants are called Florida Assist, Florida Bond, and Florida Heroes.

The first two programs are available to borrowers with incomes at or below 120% of area median income (AMI).

Florida Heroes is available to first responders, military personnel, teachers, and healthcare workers with incomes at or below 150% AMI.

Debt to income ratio

Debt-to-income ratios are 45 percent with a minimum credit score of 640 and 50 percent for a minimum credit score of 680.


Borrowers can use income from non-borrowing household members to qualify for the mortgage, as long as they sign a form stating they will live in the home if it goes into foreclosure.

This allows undocumented immigrants, among others, to qualify for a mortgage without meeting normal requirements such as proof of legal status or credit history.

This means you can get approved for a mortgage with a cosigner if you would not be able to qualify on your own.

However, you should use cosigners with caution. A cosigner promises responsibility for your debt if you fail to repay.

This can cause credit score damage if payments are missed and could put your cosigner at risk of foreclosure if you default on your loan.

Non-occupying co-borrowers cannot execute the deed

The non-occupying borrower will sign the loan documents but not the deed, and in the event of a default, they do not have an ownership interest in the property.

This is different than other products where co-borrowers are on both documents.

You can use a co-borrower, but they will have no ownership rights in the property if there is a default. The loan cannot be assumed because there is no guarantee from the non-occupant Co-borrower.

A non-purchasing spouse doesn't have to be a first-time buyer

One of the features offered by the program is that the non-purchasing spouse does not have to be a first-time homebuyer.

If you are getting a divorce and buying out your spouse's share of the family home, it doesn't matter if you already own another property.

Gift funds

You can use gift funds for a down payment and closing costs in the form of a gift from a family member or a non-profit organization.

Gift funds are allowed from parents, grandparents, stepparents, step-grandparents, children, and grandchildren. Other family members must be approved by underwriting before the file can proceed to loan approval.

There is no limit on the amount of gift funds that may be applied to the down payment and closing costs for conventional loans as long as all other requirements are met.

FHA allows 100 % of the down payment and closing costs from gift funds as long as you meet all other guidelines.

Flood coverage

The lender may require flood coverage. This requirement is determined by the property's location and FEMA's flood maps. If flood coverage is required, we will need proof of insurance before closing on your home.

Please contact your insurance agent to determine if your property is in a high-risk flood zone and your approximate cost for flood insurance for your new home.

If you are unsure whether or not you have adequate flood insurance, please consult with your insurance agent.

Prepayments permitted any time without penalty

Some mortgage loans have a prepayment penalty provision.

If the borrower makes payments over the amount required by the note or pays off the loan entirely prior to its maturity, the borrower is subject to a prepayment penalty fee.

Prepayment penalties are designed to compensate lenders for reduced interest income resulting from early loan payoff or reductions in borrowers' monthly principal and interest payments.

Florida Housing HFA Preferred, and HFA Preferred Plus Mortgage Loans do not include a prepayment penalty provision.

Borrowers who make early payments or pay off their mortgage loans will not be charged a prepayment penalty fee.

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