Florida Housing
Finance Corporation
FIRST TIME HOMEBUYER
PROGRAM
227 North Bronough Street, Suite 5000
Tallahassee, Florida 32301
850.488.4197
227 North Bronough Street, Suite 5000
www.floridahousing.org
Tallahassee, Florida 32301
850.488.4197 • 850.488.9809 Fax
www.floridahousing.org
First Time Homebuyer Program Staff
Sandy Gaver
Manager, Single Family Programs
Sandy.Gaver@floridahousing.org
850-488-4197 x 1143
Chip White
Administrator, Single Family Programs
Charles.White@floridahousing.org
850-488-4197 x 1203
Defining Bond
What is “Bond” and how is
Florida Housing’s
First Time Home Buyer Program
different from other programs that offer down
payment assistance?
Defining Bond
Bond refers to first mortgage programs that generally serve first
time homebuyers and which are funded from the proceeds
acquired through the sale of mortgage revenue bonds (MRBs).
These MRBs are sold to investors at lower rates of return
because the interest is exempt from federal taxes and are
generally low risk investments.
MRB (better known as “bond”) programs were created by
Congress in an effort to help finance affordable housing. Bond
programs DO NOT use public funds and are generally offered
through local or state housing finance agencies, like Florida
Housing.
Defining Bond
Bond = First Mortgage
Down Payment Assistance = Second Mortgage
Florida Housing’s Role as a
State Housing Finance Authority
Florida Housing Finance Corporation is the state housing
finance agency. Which means, the First Time Home Buyer
Program is offered throughout the entire state of Florida
and not limited to specific counties, cities or jurisdictions.
Florida Housing’s First Time Home Buyer Program is
often referred to as the “state program”.
There are also local housing authorities located throughout
Florida that serve specific counties and markets. Florida
Housing does NOT govern these agencies.
State Housing Authority vs.
Local Housing Authority
There are 11 local housing finance authorities (HFAs)
located throughout Florida. Each HFA offers a program
for first time homebuyers. Each program may have
similar requirements (like requiring 3 years’ tax returns
for borrower and spouse) but be cautious because no two
programs are identical. There can be significant
differences with rate, homebuyer education requirements,
DPA, and bond documents.
Housing Finance Authority vs.
State Housing Initiative Partnership (SHIP)
Although Florida Housing offers down payment assistance,
the First Time Homebuyer Program is a FIRST
MORTGAGE PROGRAM. Down payment assistance is
offered as a second mortgage. Many county or city housing
finance agencies or non-profit agencies, like SHIP, offer
stand alone DPA. Florida currently has over 120 SHIP
offices.
Most of these agencies work directly with the borrower(s)
to determine eligibility as well as fund their DPA. Some
offer DPA in the form of a second (or third) mortgage and
some offer subsidy that is forgiven or provided as a grant.
The First Time Homebuyer Program’s
Impact on Homeownership in Florida
• In 2010, the First Time Homebuyer Program helped
4,283 Floridians attain homeownership.
•
•
$430,663,293 provided in first mortgage assistance.
$29,133,338 in down payment and closing cost
assistance provided.
• Since 2002, over 24,464 Floridians have attained
homeownership through our Program.
•
•
$2,625,788,395 provided in first mortgage assistance.
$204,900,170 in down payment and closing cost
assistance provided.
Florida Housing’s
First Time Homebuyer Program
• This is a first mortgage program that offers down payment
assistance in the form of a second mortgage. Florida
Housing determines the rate and term of all first mortgage
products and second mortgage products.
• Down payment assistance is REPAYABLE. It is not
forgiven nor provided as a “grant”.
• Florida Housing is not a bank. All loans are originated,
underwritten, closed and funded by our participating
lenders.
• Borrowers must be first time homebuyers (some exceptions
apply) and satisfy income and purchase limits.
First Mortgage Products
Florida First
• 30-year term
• Fixed 4.50% rate as of
10/27/11.
• Zero discount or origination
Military Heroes
• 30-year term
• Fixed 4.25% rate as of
10/27/11.
• Zero discount or origination
Down Payment Assistance &
Second Mortgage Products
Florida Assist
•
•
•
•
Provides up to $7,500 in DPA
0.00% rate
30-year deferred loan
For buyers at 100% of AMI or
below.
HAMI
•
•
•
•
Provides $5,000 in DPA
5.00% rate
10-year, amortizing loan
Buyers who qualify for FL
First automatically qualify.
The Basic Requirements
for Borrowers
• Buyers must be first time home buyers (some exceptions
apply) AND
• Buyers must income qualify. Income limits are set by
county.
• Buyers must complete a face-to-face, 6-8 hour home buyer
education class.
• Borrower must qualify for a first mortgage using standard
Agency guidelines (FHA, VA, USDA-RD, Fannie, Freddie).
• Buyers must have a minimum 620 FICO.
• Must occupy the property as primary residence within 60
days of purchase.
First Time Homebuyer Defined
To qualify as a FTHB, borrowers must meet ONE of the
following criteria below:
1)
2)
3)
had no ownership interest in a primary
residence for the last 3 years.
will be purchasing in a federally
designated targeted area.
exempt through the Veteran’s Exception.
If borrower meets one of the 3 criteria, then borrower
must provide documentation to validate eligibility.
Veterans Exception
• For the First Time Homebuyer Program, a “veteran”
is defined as “a person who served in the active
military, naval, or air service, and who was discharged
or released there from under conditions other than
dishonorable”.
• Veterans have a permanent exemption to the first time
homebuyer requirement.
The Cost Benefits to
the First Time Homebuyer
• Buyers are exempt from paying doc stamps on the note and
intangible tax. Doc stamps on deed are not exempt and
must be paid by seller. Exception: REO by Fannie, Freddie,
HUD or bank. Buyer may then pay.
• FL Housing caps lender fees and prohibits realtor
transaction fees on all loans.
• Offers down payment assistance which helps with closing
costs and prepaids. Other subsidies may also be used with
our first mortgage.
• Low, fixed rate, 30-year mortgage.
Income Requirement
• IRS regulations require lenders to consider
Household Income which is defined as all income
from all persons that will live in the home.
• This includes persons that are not on the loan,
including fiancés, children over the age of 18 that
are not in school, parents, grandparents, etc.
Property Requirements
•
•
•
•
Purchase price limits set by county.
1 – 4 units eligible.
New & existing properties eligible.
Attached, detached, condos, townhomes & manufactured
homes eligible.
Mortgage Credit Certificate Program
(April 2012)
• A Mortgage Credit Certificate (MCC) is a federal
•
•
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income tax credit designed to provide housing
assistance to families of low and moderate income. It is
an alternative to the Mortgage Revenue Bond Program
(First Time Homebuyer Program).
The MCC is not available with first mortgage loans
originated through the First Time Homebuyer
Program. Lenders retain all first mortgage loans
originated with the MCC.
First time homebuyer requirements still apply.
Mortgage Credit Certificate Program
•
An MCC allows the qualified first time homebuyer to
claim an itemized income tax deduction for the amount
of interest paid each year on the mortgage loan. The
deduction reduces the amount of income that is taxed. A
portion of the interest paid is then subtracted from the
actual amount of tax owed. This “tax credit” provides a
dollar-for-dollar reduction in taxes.
• The homeowner can save thousands of dollars as long
they occupy the property as their principal residence.
Tax Credit vs. Tax Deduction
A TAX CREDIT entitles taxpayers to subtract the
amount of the credit from their total federal income tax
liability, thereby receiving a dollar for dollar savings.
A TAX DEDUCTION is subtracted from the adjusted
gross income before federal income taxes are
computed.
Therefore, with a deduction, only a
percentage of the amount deducted is realized in
savings.
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Benefits of the MCC Program
for Homebuyers
• Borrower claims the credit with their annual tax return
using IRS Form 8396 and the credit may be claimed for
the life of the loan if borrower occupies the property as
their principal residence.
• The borrowers may, if they choose, adjust their
W-4s to reflect the anticipated credit.
• The anticipated credit may be used to help qualify the
borrower for a loan. If the tax credit is $2,000.00, the
increase to borrower’s monthly income would be $166.67
per month.
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Florida Housing Website:
www.floridahousing.org
Florida Housing Website:
www.floridahousing.org
Florida Housing Website:
www.floridahousing.org