Down Payment Assistance (DPA) Second Mortgage Loan Terms:
- DPA is a lien secured by a second mortgage
- Up to 5% of the total loan amount with a maximum of $25,000
- May be applied to closing costs, down payment, prepaids, upfront funding fee, or other related program and mortgage loan fees and expenses
- 30-year second mortgage at 0%, non-amortizing, and deferred with zero monthly payment
- Lien is NOT forgivable
- Repayment is deferred until the event of the sale, transfer of deed, refinancing, satisfaction of the first mortgage, or when the mortgagor ceases to occupy the property
Product Highlights:
- 30-year fixed rate first mortgage loan
- FHA, VA, Conventional, and USDA
- Primary residence only
- Property must be in Florida
- Must be able to permanently reside in the US
- Must occupy the home within 60 days
- Property types:
- 1-unit Single Family/PUDs (includes townhomes)
- 2–4-unit properties are restricted to 95% LTV
- Repair Escrows are not permitted
- Condominium and manufactured home properties are not eligible
- Purchase transactions only
- One borrower must be one of the following at application
- Licensed or certified front-line worker
- Will need a copy of the state license or certification
- Must be actively employed full-time in Florida in a position in which their license or certification is held
- A verification of employment must show full time as defined by the employer
- Active military, veterans with any discharge other than dishonorable
- A surviving spouse of a veteran, but is only eligible to use a VA loan
- Fully executed heroes loan program attestation form signed by borrower
- Minimum 640 credit score
- Borrowers must generate at least 2 credit scores
- Maximum debt-to-income (DTI) ratio varies by loan product as follows:
- Conventional, FHA, and VA – maximum DTI varies by credit score as follows:
- credit scores 640-679 – maximum 45% DTI
- credit scores 680 or greater – maximum 50% DTI
- USDA Loans- maximum DTI 45%
- All borrowers must be a first-time homebuyer unless they have an exemption status
- Have not owned nor occupied a primary residence within the last 3 years
- Do not claim their mobile home as real property (it is located on a rental lot / land)
- Veterans, active duty, and their spouses are exempt from the first-time homebuyer requirement
- Surviving spouses must be a first-time homebuyer and is not exempt
- There are no purchase price limits
- Loan amount restrictions vary by county. Duval, Clay, and St Johns County are:
- FHA is $432,400
- VA and Conventional is $647,200
- Income limits vary by county and is 150% of the area median income
- Duval, Clay, and St Johns County are $118,950
- Income eligibility is determined by the income used in underwriting
- Only income reflected on the loan application is considered
- Household income is NOT used
- Non-occupying co-signor income is included
- Minimum borrower contribution varies as follows:
- FHA/VA/USDA- no minimum borrower contribution
- Conventional, varies by number of units, as follows:
- 1-unit property- no minimum borrower contribution
- 2-4-unit property- 3% minimum borrower contribution
- Cash back from DPA Funds is not allowed
- Any potential cash back should be applied as principal reduction to the 1st mortgage
- The maximum principal amount allowed is $1,000, if exceeded the loan amount must be reduced
- Cannot be used for an appraisal gap, but the borrower can use their own funds
- Cannot be used to pay off borrower debt, but the borrower may use their own funds
- Homebuyer education is required by the borrower and spouse
