Conventional and FHA loans for first-time home buyers
Purchasing a home is not the easiest process to go through and in many cases, most homeowners need some level of assistance to help them get through the financial hump. Fortunately, for first-time home buyers in the State of Florida, there are recent programs implemented to help them do just that. Even amid the corona virus pandemic, Florida State has listed multiple down payment assistance programs that fit for both FHA and conventional borrowers.
Some of the program we have outlined below and are available for the entire State of Florida. Others are only available in certain Counties and consist of the following:
- A 101% Conventional Financing Option without Mortgage Insurance
- A 100% Conventional Loan called the Buyers Advantage with no Mortgage Insurance
- A 97% Loan to Value, 10/1 Financing Option, also with no Mortgage Insurance
- A 2020 Down Payment Assistance Grant available to most Florida Counties
- A 2020 FHA 3.5% Financing Grant Program with AFR Advantage
- A 2020 FHA Housing Finance Authority Program in Jacksonville, Hillsborough, Brevard and Clay Counties
RELATED ARTICLE: Preparing to Buy Your Home
101% Conventional Financing Option without Mortgage Insurance
This program, like many others we will mention, presents a great opportunity for first-time home buyers. It is focused around a 30-year fixed rate loan that is maxed out at 97% LTV (Loan to Value) and is additionally supported by a second mortgage provided by FNMA (Fannie Mae) of 4%. This allows the borrower to benefit from a CLTV (Combined Loan to Value) of 101%.
There is no dollar limit to the second mortgage provided by FNMA and it is also focused around an interest only payment over the 30-year term. Like most of the programs we will mention in this article, there is no mortgage insurance included in this program. There is added benefit to this savings that all homebuyers can take advantage of.
Additionally, there are no seller contribution limitations either, so if your real estate agent is looking to negotiate tough, this is an added benefit to your purchase transaction. You will need two years of Federal Tax Returns and the program is only available to owner-occupied property. No Investors allowed. More details can be provided when you give us a call at 904-644-7006.
100% Conventional Loan, Buyers Advantage with No mortgage Insurance
This program is straight forward. You can acquire financing for the full purchase price of your home (100%) if it meets the appraisal requirements. The financing option is a 30-year fixed rate first mortgage with approval of a FNMA Conventional Loan. It is also focused around owner-occupied properties and not for investors.
There are some requirements you will need to meet to acquire this assistance opportunity. You must have 2 months cash reserves that will cover, Principal, Interest, Taxes and Insurance. You will be required to have a minimum of 680 FICO score and a maximum DTI (Debt to Income Ratio) of 43%. Start adding your monthly debt payments and see if you fit this requirement. Additionally, you’re not allowed to have any foreclosures, bankruptcies, any short sales in the past and no Deed in Lieu of Foreclosures.
One of the interesting benefits of this program is the minority population of the area you decide to live in. If minority population exceeds 51%, there will be no income limit pressed against the borrower. Essentially, you can purchase any size home in an area populated by 51% or more minority, and you will still qualify for this assistance program.
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97% LTV 10/1 Adjustable Rate Financing Option, No Mortgage Insurance
We will add a disclaimer of caution to this adjustable rate mortgage. In many cases a 2 or 5-year adjustable rate mortgage is not a good idea. This is because that time frame can come by very quickly and if you don’t know what financial position, you’ll be in 2 to 5 years, this program could present some problems for you. However, a 10-year fixed rate loan with adjustable rate, thereafter, can provide you with ample time to find a solution or a better financial situation. A 10/1 Adjustable rate mortgage loan is exactly just that. 10 years fixed, adjustable rate every year after the first 10.
This program is structured with a maximum loan amount of $250,000 and the adjustable rate cannot go higher than 2% per year. On a slow economy this adjustable rate could go down, on a robust economy, this adjustable rate is sure to increase. The front-End housing ratio is set at no more than 33%. this means that the monthly cost to the property you purchase cannot be higher than 33% of your monthly gross income. The full DTI (Debt to Income Ratio) of this program is set at 41%. Equally, this means that the monthly payments plus all other monthly debts cannot exceed 41% of your monthly gross income.
It is structured at 97% LTV so you must come with at least 3% down payment and this program is NOT available to the Miami-Dade County area. To learn more about his program, call us today at 904-644-7006 and ask to speak with any available agent at Kashmiri Realty & Property Management.
2020 Down Payment Assistance Grant Available to Most Florida Counties
This program is available to first-time homebuyers who have not owned a previous property in the past 3 years. It is structured as a 30-year fixed rate mortgage with 3% to 4% down payment assistance for the value of the purchase price. The Grant is forgivable but has a rate of 20% per year that the homeowner lives in the purchase property. You will need 3 years of Federal Tax Returns, not two and a maximum DTI of 49.99%, which is rather high compared to other assistance programs. Veterans do not have to pay a loan origination fee.
There are some limitations in this grant assistance program. You’ll have applicable fees to be paid out of the Grant at closing of escrow such as:
- $225 Compliance Fee
- $300 US Bank Funding Fee
- $85 Tax Service Fee
- The Loan is Automated Underwriting
- Income and Purchase limits are TBA
RELATED ARTICLE: Tips To Helping Your Buyers Purchase Their Home Sweet Home
2020 FHA 3.5% financing Grant Program with AFR Advantage
This loan assistance program is great for most homebuyers, it’s priced competitively through the FHA. This program is not just available to first-time home buyers, you can also qualify if you are involved with the Healthcare Administration, if you’re a Civil Servant working in either Federal, State or any of the Local Municipalities. You’ll also qualify if you work for the Law Enforcement Administration, Any Military Veteran or Firefighter.
Some of the additional requirements you must meet is a credit FICO score of at least 620 or above, you must be a first-time home buyer and you must abide by the FHA acquisition price limits. Additional restrictions are:
- Single Family Residence only, no 2-4-unit Condos
- FHA Loan Guidelines must be met
- LTV must be not higher than 96.5% with the 3.5% FHA Grant
2020 FHA Housing Finance Authority Program
This programs’ initial limitations are its lack of availability in certain Counties. This Housing assistance program is only available in Hillsborough County, Jacksonville County, Clay County and Brevard County. Each county has a maximum household income and a maximum total purchase price per County, we’ve listed a few below:
- Brevard County maximum amount is $253,809 with max-income level of $61,700 for 1-2 person.
- Hillsborough maximum amount is $283,348 with a max-income level of %9,800 for 1-2 person.
- Duval County maximum amount is $199,000 with a max-income level of $70,178 for 1-2 person.
- Clay County maximum amount is $322,295 with a max-income level of $69, 176 for 1-2 person.
These are just a few of the details outlined, but if you live in any of these counties and would like to take advantage of this assistance program, feel free to reach us at Kashmiri Realty & Property Management for further details on requirement, restrictions and pre-approval through one of our associate lenders at 904-551-4955.