First Time Home Buyers
Who is considered as a First Time Home Buyer (“FTHB”) ?
It’s a lot different than many people think. A FTHB is anyone that hasn’t owned a home in the past 3 years that was their primary residence. It’s that simple yet it covers more people than most ever thought possible.
Are FHA loans used for FTHB(s)?
Yes they are but FHA loans are not restricted to a FTHB. A FTHB does not generally receive any benefit using a FHA mortgage. Many a FTHB will seek to use a FHA loan because they mistakenly think this is their only option. FHA does allow for no credit score or lower credit scores, higher allowable debit to income (DTI) ratios, those with limited credit and/or bumps in their credit such as a short sale, foreclosure or bankruptcy all of which may be necessary considerations for the FTHB.
What are the minimum down payments for FTHB?
Florida State Mortgage Group, Inc (“FSMG”) offers down payments as low as 1% to qualified borrowers.
The State of Florida through the its’ Florida Housing and Finance Corporation along with several counties and local municipalities offer Down Payment Assistance (“DPA”) programs. These programs are typically income restricted and limit the purchase price both dependent on the property’s specific location. Many of the programs require a second mortgage to be placed on the property and may require reimbursement of the DPA funds if the property is sold and/or refinanced within 7 years +/-. Some of the programs restrict the use of the DPA funds to only be used in conjunction with a higher than an average interest rate first mortgage originated by specially required participating lender(s). The use of these programs can result in very limited purchase options. Many Sellers can be concerned over the time required and ability to close considering the very restrictive nature of these government sponsored DPA loan programs. Those interested borrowers should check the available options and their individual eligibility with the appropriate authority and/or participating lender(s).
Does FSMG participate in any FTHB programs?
Yes, FSMG offers an eligible FTHB a Florida Mortgage Credit Certificate (“MCC”) in conjunction with FSMG originated conforming/conventional loans. The MCC provides borrowers an annual IRS income tax credit of up to $2000 for each year they own the mortgaged property. They must maintain the mortgaged residence as their primary residence each year to claim the IRS income tax credit.
FSMG also offers conventional loans with reduced interest rates and reduced private mortgage insurance (“PMI”).
All of these options may be income restricted, purchase price limited and can be specific to a property’s individual location. Please check with your FSMG loan officer in order to best determine your individual eligibility and options.