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Are you buying a home for the first time in Florida? This is the guide for you. While many of the Sunshine State’s homebuyers are retirees who have been through the entire purchasing process before, Florida also hosts many younger individuals and families who are interested in buying real estate for the very first time.

Whether you are currently renting in Florida and want to become a homeowner, or plan to move in and buy a house from out of state, we are here to walk you through each kind of home loan available to you, so you can pick the best mortgage program for your needs.

Mortgage Loans Available in Florida

First-time homebuyers in Florida can qualify for many different types of loans. In a state saturated with snowbirds and timeshares, sometimes the housing market can be competitive. However, if you need payment assistance, or help finding a loan with more manageable interest rates, then you don’t need to stress.

This is because there are plenty of loan options on both the state and federal levels available to help make your dream of becoming a homeowner into a reality.

Federal Loans Available in Florida

Floridians are an interesting mix of people.

Because Florida is the top vacation and retirement destination in the country, many homeowners in the state are not originally from there. Because of this, first-time homeowners in the Sunshine State tend to favor federal loan programs to finance their homes, simply because they are nationally recognized and therefore more familiar.

Here are the most common types of home loans that Floridians use to finance their homes when purchasing them for the first time:

Conventional Loans

A conventional loan is one of the most common types of loan. People buying houses for the first time in Florida often choose to use conventional loans. A few key features can characterize these loans. They have low-interest rates to keep their monthly payments competitive. They also sometimes only require a down payment that is about 3% of the home’s total purchase price.

A home’s usual purchase price is 20% of the total amount, so this 3% deal is often very attractive to buyers. There is one catch, though. But don’t worry; it’s not too good to be true. The catch is that in order to qualify for this loan, you also have to qualify for the terms of loans like Fannie Mae and Freddie Mac. This means your credit needs to be good and your debt to income ratio should be relatively low.

If you have more than 3% of the deposit for your home saved and would like to go ahead and pay more up front, you should go ahead and do so. This is because if you can pay for a larger deposit, then it saves you more money in the long run. You won’t even need to take out private mortgage insurance on a conventional loan if your deposit is the traditional 20%.

FHA Loans

FHA stands for Federal Housing Authority. The FHA is a part of the United States Department of Housing and Urban Development (sometimes referred to as the HUD). During the height of the Great Depression, Congress noticed that current conditions were making it nearly impossible for the average American to own a home.

So, it created the FHA program to make homeownership a goal that more Americans could achieve. Basically, the program exists to ensure that everyone has a fair shot at owning a home, even if their credit history is dodgy.

As long as you can prove that you are committed to being on the right track in the present day, then you are eligible to receive an FHA loan. This means that you need to have a job with a steady paycheck (it doesn’t matter how much – it just needs to be consistent) and are working on improving your credit.

Although if your credit still needs some work, don’t worry about it too much. You can still buy a house! If you can put 20% of the balance of the home down at closing, then you can even buy a house if your credit score is about 500. This is significantly less than the score in the 700s that lenders usually want you to have before they give you anything.

VA Loans

VA loans are actually one of the best options for first-time homebuyers in Florida. If you or your spouse served (or are serving!) in the United States military, then you can be eligible to receive assistance from the Department of Veterans Affairs to help you purchase your first house.

If you are a widow or widower and your spouse served and passed away in the line of duty, then you are also eligible to use this form of financing.

These loans are so attractive because as a “thank you for your service” veterans who want to purchase a home in Florida can do so easily with very low-interest rates. Some of these loans also feature no minimum credit score, down payment, or requirement of mortgage insurance. A truly great deal!

USDA Loans

Florida is known for its sprawling beachfronts and pulsing urban centers. When you think about buying a home here, you really might not consider it to be a place that rural getaways are a reality. However, the USDA (United States Department of Agriculture) still classes parts of central Florida as rural.

Because of this, even if you don’t have a traditional credit history, you can still qualify for a great loan from the USDA if you are willing to settle down in a less populated area.

State Loans in Florida

Florida, like most other states, also has many programs that the local governments specifically designed to benefit Floridians. Even though living in Florida might feel like a permanent vacation, being on holiday time won’t preclude you from saving time, stress, and money with these custom-made loan programs.

If you’re a first-time homebuyer in Florida, be sure to check these out.

Here are the main requirements for these state loans, which you can take out in all 67 of the counties in Florida:

  • The home has to be in Florida and be a primary residence of the buyer—no investment properties!
  • All borrowers must meet the income, credit and purchase price requirements for their preferred loan.
  • You have to take a homebuyer education course before the disbursal of the loan.
  • Some loans might have more requirements to meet.

Military Heroes Government Loan Program

This loan program gives vets and active duty servicemen in Florida a 30-year fixed rate loan, even if you recently owned a home. However, we still wanted to include it in this list of great financial options for first-time homebuyers because it also offers the lowest interest rates in all of Florida!

If you are a military family, it’s best to look into this program first thing when you want to buy a home because it’s likely to be your best option, both financially and logistically.

Florida HFA Preferred Conventional Loan

This type of loan is really useful to first-time borrowers because it gives them access to very affordable Private Mortgage Insurance (PMI) something which otherwise could have been a mounting expense. This loan offsets some of the start-up costs that many mortgages have. For example, buying a home is so much more than just saving up for the deposit.

This “extra money needed to buy a house” might lock out certain buyers from having a go purchasing a home for the very first time at all. So, if you can qualify for this loan, you might even be eligible to receive down payment and closing cost assistance.

Florida HFA Preferred 3% Plus Conventional Loan

This HFA loan is similar to the one listed above. The only difference is that borrowers can also use the Florida Housing’s 3% down payment and closing grant to get themselves started on their 30-year fixed rate mortgage. And, yes, you read that correctly. This is a grant program, not a loan program which means that it’s free money. You don’t have to pay it back. Ever.

Florida Assist Second Mortgage

If you live in Florida and need a little bit of closing costs and down payment assistance, then this loan program could be a good fit for you.

If you qualify, you can borrow up to $7,500 for your down payment. And the best part? The Florida Assist Second Mortgage program has no interest! Yes, zero interest on this loan. And, the payments are usually deferred. This means that you don’t actually have to pay the loan back until you move out of the house, sell the house, completely refinance your mortgage, or pay off your original mortgage.

It’s truly one of the best deals out there and a true favorite of many Floridians.

Florida Mortgage Credit Certificate Program

This program gives qualified first-time homebuyers in Florida and some eligible veterans in the same state savings on their real estate purchases by giving them a nice credit on their tax returns. If you can participate, then you are allowed to claim up to 50% of the interest that you pay on your mortgage (or up to $2,000) for every single year that you occupy your home.

Yes, every single year! That’s one of the best perks of Florida’s MCC program: that the benefits don’t expire and you can enjoy it year after year without worry that your taxes are suddenly going to skyrocket.

Best Places to Live in Florida

You might think that living in Florida might seem like you’re on a permanent vacation, but the Sunshine State is actually one of the best places to work and raise a family. Because of the booming tourism industry and weather that seems to be summer most of the year, the economy in the state is consistently strong.

There are plenty of industries besides tourism, like agriculture (Florida orange juice, anyone?), aerospace (it’s not like the space shuttles launch from Cape Canaveral or anything), and aviation in general.

No matter which industry you work in, you will still be able to find family and career-friendly neighborhoods sprinkled around the major cities of Tallahassee, Tampa, Orlando, Pensacola, and Miami. So, whether you prefer chic, modernistic architecture or a classic villa covered in Spanish Moss, you will be able to find it in one of Florida’s neighborhoods. And for a great price, too.

Culturally, the northern part of the state tends to have more in common with its neighbors of Georgia and Alabama, while the coasts brim with transplants from all around the globe. The closer you get to Miami, the Havana nights heat up and you’ll find one of the most vibrant and thriving Cuban populations outside of the island itself.


Andrew Schmeerbauch
Andrew Schmeerbauch

Andrew Schmeerbauch is the Director of Marketing at Clever Real Estate, the free online service that connects you top agents to save on commission. His focus is educating home buyers and sellers on navigating the complex world of real estate with confidence and ease. Andrew has worked on projects for the United Nations and USC and has a particular passion for investing and finance. Andrew's writing has been featured in Mashvisor, L&T, Ideal REI, and Rentometer.

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