First-time homebuyers: Down payment assistance programs available to eligible individuals

By Johanna Gomez, Lisa Hamilton and Jenny Rodriguez

UF-IFAS Osceola County Extension Services

Down Payment Assistance (DPA) programs help first-time home buyers with loans or grants that reduce the amount they need to save for a down payment. There are over a thousand of these programs nationwide, many of which are run by local governments.

DPA programs may vary by location. If you’re considering buying a home and are looking for these types of assistance, you need to learn more about what’s available in your area, the requirements, and if it’s the right choice for you and your family.

Types of ODA: In general, most PAD programs will be interest-free, can be given as a grant or loan, and the buyer will have to follow the guidelines and requirements. For example, this type of assistance can be:

A grant or donation that never has to be repaid if you qualify under program guidelines, or

A second mortgage. In this category, you can have a combination of a loan that must be repaid alongside your first mortgage or a deferred repayment loan that you will only have to repay if you sell, move, or refinance to cash in the equity. of your property. Another type is a loan in the form of a second mortgage often for five, 10 or 15 years which is canceled over the years and only has to be repaid if you sell, move, rent or refinance your house before the duration of years established by the DPA program. are met.

Important facts to know: To qualify, most DPA programs will require you to be a “first-time home buyer,” meaning that to be considered you must be free of title for at least three years, and also:

  • Must be able to qualify for a mortgage through a lender;
  • Must qualify based on household income, household size, location of home, cost of home, financial status;
  • Must meet the minimum FICO (credit) requirement for the program;
  • Must have, for most DPA programs, at least some equity in your bank account;
  • To apply, most programs will require you to attend a course for homebuyers from a counseling agency approved by the U.S. Department of Housing and Urban Development (HUD), where you will receive a certificate of completion indicating that you have taken at least one eight-hour course. (For courses at the University of Florida/IFAS Extension, visit Upcoming courses visit us here University of Florida / IFAS Extension Osceola County)

Who is eligible? What types of loans are acceptable for down payment assistance?

Every down payment assistance program is different. Some will have income caps and may require the home to be located in certain areas within a certain price range. Qualifying will depend on where you live and what programs are available in your state, county, or city. To be rewarded, most DPAs will seek if:

  • Buyers have low to moderate incomes;
  • The home is located within the DPA program guidelines and within the allowable price range;
  • The home will be used as a primary residence and not as an investment (rental homes, second homes, or vacation homes do not qualify for DPA programs);
  • PAD is used with an approved mortgage program
  • You work with an approved mortgage lender who can run the loan program.

Almost all DPA programs require you to borrow from approved lenders. The most common loan programs such as FHA loans, VA loans, USDA loans and conventional loans are authorized by DPA programs. A private mortgage referring to a direct purchase financed by a private source in most cases will not qualify for these government programs. Check your local DPA program websites for details.

Costs covered by down payment assistance: Since “down payment” explicitly refers to the initial amount you contribute to your home loan, some DPA programs will allow their funds to be used for your closing costs as well as a down payment. Others may not allow funds to be used for other purposes. When applying for assistance, contact your local DPA programs to see if closing cost subsidies are included.

And, if you live in Osceola County, there’s good news: The Osceola County State Housing Initiative (SHIP) Partnership Program is accepting applications:

To apply for the Osceola County SHIP program, visit SHIP Program Apply Here

Program requirements

  • Applicants must complete an 8-hour homebuyer course;
  • Obtain a pre-approval letter from a participating lender. See our list of preferred lenders here.
  • Not having owned or seized a house in the past 3 years;
  • Must contribute at least $1,000 of own funds toward purchase;
  • Must adhere to all program guidelines
  • $280,000 maximum purchase price of a single family home, townhouse or condominium in Osceola County.

Assistance levels are based on the maximum purchase price of the family’s income level. The family is required to attend post-purchase counseling within 6 months of the date of purchase. For revenue guidelines, visit: Osceola County SHIP Down Payment Assistance Program Flyer

Resources for Finding Down Payment Assistance Programs in Florida

The Florida Housing Finance Corporation (FHFC) has three DPA programs:

  • Three percent HFA Preferred Grant – if eligible, they offer 3 percent of the purchase price of the home as a non-refundable grant
  • Florida Assist – offers up to $7,500 interest-free second mortgage. You don’t have to make any payments on this, as they’re usually only due when you sell or refinance the home.
  • Hardest Hit Fund DPA – Only available to residents of certain counties. She lends up to $15,000 interest-free for five years. Every year 20% of the loan is forgiven, you pay nothing, provided you stay in the house that long.

For more information, visit the FHFC website Florida Housing Finance Corporation

For other DPA resources and programs, visit:

Florida Housing State Housing Initiatives Partnership Program

Homebuyer Loan Programs Wizard

Down Payment Assistance for Osceola County SHIP Homebuyers

Orange County Housing Finance Authority

Remember: When buying a home, there are many steps in the process, as well as many costs involved, and down payment assistance programs can help. Consider that all programs have guidelines to follow and requirements to meet. Plan short-term and long-term goals when deciding to buy a home and whether support is an important factor in making that decision.

Johanna Gómez, UF/IFAS Family and Consumer Sciences, Faculty Extension Officer Osceola County in collaboration with Lisa Hamilton, UF/IFAS Family and Consumer Sciences, Faculty Extension Volusia County faculty and Jenny Rodríguez, UF/IFAS Family and Consumer Sciences, Orange County Faculty Extension Officer. If you are interested in more of our programs, please contact us at UF/IFAS Extension Osceola County at 321-697-3000. For more information on our programs and events, visit http://sfyl.ifas.ufl.edu/osceola/ or find your local county UF/IFAS extension office at http://sfyl.ifas.ufl.edu/find-your-local-office/.

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