When it comes to first-time home buyer grants, Florida has you covered. If you’re looking to buy your first home in the Sunshine State, there are resources available to help you get over the hurdle that a down payment and closing costs can present. But first, you need to know how these grants work and where to find them.

What is a first-time home buyer grant?

A first-time home buyer grant is a type of financial assistance that helps first-time buyers with the upfront costs of buying a home, such as a down payment or closing costs. Many first-time home buyer programs have helpful tools to save you money on a home, such as low-interest loans. But first-time home buyer grants are different in that you don’t have to pay the money back like you would with a loan.

When searching for first-time home buyer grants, make sure you’re looking at programs that don’t require you to repay the money. Some programs may be listed as grants but are actually loans with low or no interest rates. In this article, we are only focusing on grants in Florida you do not have to repay.

Dig deeper: Everything to know as a first-time home buyer in 2024

Who offers Florida first-time home buyer grants?

The statewide source first-time home buyers can turn to for grants is the Florida Housing Finance Corporation, also known as Florida Housing. Created by the state legislature in 1980, Florida Housing administers the state’s programs promoting affordable homeownership and rental opportunities across the state.

You can also find local first-time home buyer programs at the regional and local levels through the U.S. Department of Housing and Urban Development’s website.

Types of Florida Housing first-time home buyer grants

Florida Housing offers one main structure for first-time home buyer grants that do not have to be repaid: forgivable second mortgages.

3%, 4%, and 5% second mortgages

First-time home buyers can receive 3%, 4%, or 5% of the total loan amount of their first mortgage to contribute to their down payment or closing costs. This assistance comes in the form of a second mortgage, not direct cash assistance.

The second mortgage structure for a grant may be confusing to many first-time home buyers. You might be thinking: “Don’t you have to pay off second mortgages?”

Although this may be a loan, it is forgiven at a 20% rate over five years. So if you stay in your home for more than five years, you never have to pay off the second mortgage. Since the second mortgage is partially forgiven on an annual basis, if you move after three or four years, you’d only have to repay 40% or 20% of the amount you received, respectively.

Florida Housing offers similar second mortgage programs that provide down payment and closing cost assistance, but these programs are not forgivable. That means you would have to repay the loans in full when you sell or refinance the home or at the end of the loan’s term period.

Learn more: What to know about first-time home buyer tax credits in 2024

Do I qualify for Florida first-time home buyer grants?

Florida Housing outlines several eligibility requirements to qualify for their first-time home buyer grants:

• Approved mortgage program and lender: First-time home buyer grants are only available to borrowers who are also getting their original mortgage through one of Florida Housing’s loan programs. That means you must get your original mortgage from a private mortgage lender approved by Florida Housing to utilize Florida Housing’s down payment assistance programs.

• First-time home buyer definition: Florida Housing defines a first-time home buyer as someone who has not owned and occupied their primary residence for the last three years.

• Credit score: You must have a minimum credit score of 640 to qualify for any Florida Housing programs.

• Home buyer education: You must complete a home buyer education course unless you have a Veterans Exception or are buying a home in a Federal Designated Targeted Area. The course must be provided by a HUD-approved counseling agency, a local Florida government entity that offers courses, a mortgage insurance company, or an agency sponsored by the HUD or GSE (government-sponsored enterprise).

• Purchase price: The price of the home you are buying must be below the county’s purchasing limit. The Florida Housing Program Wizard will show you the purchase price and income limits for your county.

• Income limit: You cannot exceed the maximum income limit for the county you are purchasing the home in.

Learn more: Are you ready to buy a house?

How to apply to Florida first-time home buyer grants

Florida Housing outlines five steps that you need to follow to apply for a first-time home buyer grant. Florida Housing’s Program Wizard can walk you through this process.

1. Find an approved lender. A Florida Housing-approved lender can get you preapproved for a first mortgage and assist you with the application process for the additional grant for down payment and closing cost assistance.

2. Take a home buyer education course: As mentioned above, this is mandatory to apply for any Florida Housing program.

3. Choose a real estate agent: A certified real estate agent can guide you through the home buying process, from finding a home to negotiating the best deal.

4. Finalize your mortgage application: Once you choose a home and the seller accepts your offer, send your mortgage lender the necessary documents to complete your first and second mortgage applications.

5. Close on your home: Closing on the house is the final step to utilizing an affordable mortgage loan and crucial down payment assistance. This is the day you will sign the final paperwork and officially become a homeowner!