florida housing finance corporation

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227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 850.488.4197 • 850.488.9809 Fax www.floridahousing.org Florida Housing Finance Corporation FIRST TIME HOMEBUYER PROGRAM 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 850.488.4197 www.floridahousing.org

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Florida Housing Finance Corporation. FIRST TIME HOMEBUYER PROGRAM. 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 850.488.4197 www.floridahousing.org. First Time Homebuyer Program Staff. Sandy Gaver Manager, Single Family Programs [email protected] - PowerPoint PPT Presentation

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Page 1: Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000Tallahassee, Florida 32301

850.488.4197 • 850.488.9809 Fax

www.floridahousing.org

Florida HousingFinance

CorporationFIRST TIME

HOMEBUYER PROGRAM

227 North Bronough Street, Suite 5000Tallahassee, Florida 32301

850.488.4197www.floridahousing.org

Page 2: Florida Housing Finance Corporation

First Time Homebuyer Program Staff

Sandy GaverManager, Single Family [email protected]

850-488-4197 x 1143

Chip WhiteAdministrator, Single Family Programs

[email protected] x 1203

Page 3: Florida Housing Finance Corporation

Defining Bond

What is “Bond” and how isFlorida Housing’s

First Time Home Buyer Program

different from other programs that

offer down payment assistance?

Page 4: Florida Housing Finance Corporation

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.

Page 5: Florida Housing Finance Corporation

Defining Bond

Bond = First MortgageDown Payment Assistance = Second

Mortgage

Page 6: Florida Housing Finance Corporation

Florida Housing’s Role as aState Housing Finance

AuthorityFlorida 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.

Page 7: Florida Housing Finance Corporation

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.

Page 8: Florida Housing Finance Corporation

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.

Page 9: Florida Housing Finance Corporation

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.

Page 10: Florida Housing Finance Corporation

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.

Page 11: Florida Housing Finance Corporation

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

Page 12: Florida Housing Finance Corporation

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.

Page 13: Florida Housing Finance Corporation

The Basic Requirementsfor 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.

Page 14: Florida Housing Finance Corporation

First Time Homebuyer Defined

To qualify as a FTHB, borrowers must meet ONE of the

following criteria below:

1) had no ownership interest in a primary residence for the last 3 years.

2) will be purchasing in a federally designated targeted area.

3) exempt through the Veteran’s Exception.

If borrower meets one of the 3 criteria, then borrower must provide documentation to validate eligibility.

Page 15: Florida Housing Finance Corporation

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.

Page 16: Florida Housing Finance Corporation

The Cost Benefits tothe 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.

Page 17: Florida Housing Finance Corporation

• 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.

Income Requirement

Page 18: Florida Housing Finance Corporation

Property Requirements

• Purchase price limits set by county.• 1 – 4 units eligible.• New & existing properties eligible.• Attached, detached, condos, townhomes &

manufactured homes eligible.

Page 19: Florida Housing Finance Corporation

Mortgage Credit Certificate Program

(April 2012)• A Mortgage Credit Certificate (MCC) is a

federal 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.

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Page 20: Florida Housing Finance Corporation

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.

Page 21: Florida Housing Finance Corporation

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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Page 22: Florida Housing Finance Corporation

Benefits of the MCC Programfor 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 theirW-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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Page 23: Florida Housing Finance Corporation

Florida Housing Website:www.floridahousing.org

Page 24: Florida Housing Finance Corporation

Florida Housing Website:www.floridahousing.org

Page 25: Florida Housing Finance Corporation

Florida Housing Website:www.floridahousing.org