Florida down payment assistance: how it works

Down payment assistance, or DPA, helps buyers cover the down payment and closing costs. In Florida, assistance is offered through the state, counties and cities. Programs, amounts and rules change often, so use this article as an overview and confirm the current details before you plan around any program.

Types of assistance

• Grants, which do not have to be repaid.
• Deferred second loans, where you make no payments until you sell, refinance or pay off the first mortgage.
• Forgivable second loans, where the balance is reduced over time if you stay in the home for a set number of years.
• Low-interest second loans, which are repaid with small monthly payments.

Where assistance comes from

The Florida Housing Finance Corporation (floridahousing.org) offers statewide first-time homebuyer programs through participating lenders. Counties and cities also run their own programs, often funded through the State Housing Initiatives Partnership (SHIP). Your county or city housing office can tell you what is available where you want to buy.

Typical requirements

Requirements differ by program, but many have these in common:

• Household income limits, often based on the county.
• Purchase price limits.
• A minimum credit score and a limit on debt-to-income ratio.
• A homebuyer education course.
• The home must be your primary residence, and some programs are for first-time buyers only. Some first-time buyer definitions include people who have not owned a home in the past three years.

How it fits with your loan

DPA is usually paired with a specific kind of first mortgage, such as FHA, VA, USDA or a conventional program, through lenders approved for that program. Some programs carry a slightly higher interest rate on the first mortgage or restrictions if you sell early. Funds can also run out during the year, so it helps to start early.

Next steps

Tell a loan officer your income, household size, target price range and county, and ask which programs may fit. The payment affordability calculator can show how assistance might change your monthly payment. Start with a pre-qualification, with no obligation and no credit check.