Hometown Heroes Program: What It Is And How Does It Work?

If you’re a first time homebuyer in Florida, then you might be eligible for the Hometown Heroes Program. This program could provide financial assistance which could help you purchase a home. In this blog post, we will discuss the program’s details, including its benefits, qualifications, and how to apply.

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What is the Hometown Heroes program?

The Hometown Heroes program offers financial assistance to cover the down payment and closing costs when buying a home. Eligible borrowers could receive up to 5% of their total loan amount, which can be as much as $35,000. This program is only available to first time homebuyers looking to purchase a home in the Florida community where they are employed. The assistance could be used to cover expenses related to the down payment, closing costs, prepaid taxes, insurance escrows, and upfront mortgage insurance premiums.

How does the Hometown Heroes program work?

The Hometown Heroes program is designed to provide support to first time homebuyers who want to buy a home in the community where they are employed. This program helps with the down payment and closing costs by offering a 30-year deferred second mortgage with 0% interest.

This means that borrowers receive upfront assistance without accruing interest. However, it is important to note that the loan must be repaid if you are selling the property, then refinancing, transferring ownership, or no longer using the property as the primary residence. While it is not a grant, this program could offer a substantial amount of assistance to those who want to own a home in Florida.

Benefits Of the Hometown Heroes Program

The Hometown Heroes Program offers a range of benefits to qualified first time homebuyers. One of the most significant advantages is that the program can assist with down payments and closing costs up to 5% of the total loan amount. It provides flexibility in terms of income eligibility and considers factors beyond just household income.

Plus, this assistance comes with zero interest, leading to long-term savings. Moreover, the program functions as a deferred second mortgage, meaning homeowners won’t have to make monthly payments for 30 years, which could provide more financial freedom over the years.

Hometown Heroes Program Florida Qualifications

The Florida Hometown Heroes Program has specific requirements that one must meet to be eligible.

• Employment: Work at least 35 hours per week in a full-time job with an employer based in Florida. Self-employed individuals must fulfill additional requirements.
• First Time Homebuyer: You cannot have owned a primary residence in the past three years to be eligible.
• Primary Residence: You must use the purchased property as your primary residence within 60 days of closing.
• Property Type: Eligible properties include single-family homes, townhouses, condos, villas, and structures with 2-4 units. There are adjusted qualifications for manufactured homes.
• Homebuyer Education: You must attend an approved Homebuyer Education course.
• Credit Score: You need a minimum credit score of 640.
• Debt-To-Income Ratio: Your debt-to-income ratio must be below 50%.
• Income Limit: Your income should be below 150% of the area median income.
• Mortgage Lender: You must work with one of Florida Housing’s participating loan officers. Speak with one of our Loan Officers today to get started!

Hometown Heroes Income Limits

To qualify for the Hometown Heroes program, borrowers must ensure their income falls below the maximum income and loan limit requirements for their county and household size. The borrower’s earnings should not exceed 150% of the area median income (AMI). Income caps vary by county, ranging from $128,250 to $162,750. Learn more about the specific county income limits here.

Mortgage Loans You Can Use With Hometown Heroes Mortgage Program

The Hometown Heroes mortgage program allows you to use various types of mortgage loans, including FHA, VA, USDA, or conventional mortgages. Explore the following loan programs to see which option could be right for you.

FHA Loan

These loans are governed by the Housing of Urban Development (HUD) and offer flexible guidelines for borrowers with limited down payment funds and an imperfect credit score.

USDA Loan

These loans are government-insured and are meant to facilitate home purchases within a designated rural area. USDA loans help low- and moderate-income borrowers in rural areas buy a home.

VA Loan

This loan option requires $0 down payment and is designed for military personnel, veterans, and surviving spouses and is partially backed by the Department of Veterans Affairs.

Conventional Loan

This is a type of conforming loan that meets Fannie Mae or Freddie Mac requirements but is not backed by the government. Available in a range of down payments, these loans come in all shapes and sizes.

How To Apply for Hometown Heroes Program

To apply for the Hometown Heroes Program, you must first locate an approved lender. Direct Mortgage Loans is an approved lender and can help you verify your eligibility and assist you with the pre-approval application.

Once you get pre-approved, you must complete an approved Homebuyer Education Course. After completing the course, work with your Real Estate Agent to find a home and make an offer. The final step is to attend closing and complete the process.

Other Down Payment Assistance Florida Programs

In addition to the Hometown Heroes program, there are several Florida first time home buyer down payment assistance programs borrowers could take advantage of. Below are some other programs to consider.

Florida Assist Second Mortgage Program (FL Assist)

This program provides down payment assistance (DPA) to qualified home buyers who are purchasing in select counties in Florida. Borrowers may receive up to $10,000 on FHA, VA, USDA, and Conventional loans. The program offers a deferred second mortgage at a 0% interest rate, allowing borrowers to make no monthly payments.

Florida Homeownership Loan Program (FL HLP) Second Mortgage

This loan program is designed to help borrowers who are buying a property in a selected county qualify for down payment assistance (DPA). The program offers a fully-amortizing second mortgage with a 15-year term and up to $10,000 or 3% of the purchase price. The monthly payment for this second mortgage is fixed at $69.06.

3%, 4% and 5% HFA Preferred and HFA Advantage PLUS Second Mortgage

Florida borrowers who utilize the HFA Preferred and HFA Advantage PLUS Second Mortgage programs could receive a forgivable second mortgage of either 3%, 4%, or 5% of the overall loan amount. The second mortgage has a 0% interest rate and requires no payments. It’s forgiven at a rate of 20% per year over a 5-year term.

FHA 100% Financing

Direct Mortgage Loans offers FHA 100% Financing to eligible homebuyers in Florida. This program enables homebuyers to obtain 100% financing without having to make a down payment. This is achieved by combining a 1st and 2nd mortgage and is compatible with FHA loans. The 2nd mortgage can be up to 3.5%, based on the lesser of the sales price or appraised value, and has a 10-year term.

FAQ’s About The Hometown Heroes Program

Is Hometown Heroes program only in Florida?

The Hometown Heroes program is currently only available in Florida. It is specifically designed to assist residents of Florida with purchasing their first home. While other states might offer similar programs, the “Hometown Heroes” title and its specific structure are unique to Florida.

Can I combine the benefits of the Hometown Heroes Housing Program with other homebuyer assistance programs?

Yes, it is possible to combine the Hometown Heroes Housing Program with other eligible programs that offer down payment and closing cost assistance. However, it is important to keep in mind that each program will have its own set of requirements that you must meet. Therefore, before applying for any program, make sure you fully understand its requirements.

How can I find a Hometown Heroes program lender?

Direct Mortgage Loans is a participating lender of the Florida’s Housing Agency. Speak with one of our expert Loan Officers to learn more about this program and if you are eligible.

Who qualifies for Hometown Heroes program Florida?

To qualify for the Hometown Heroes program in Florida, you must be a first time homebuyer, which means that you have not owned any real estate or had any ownership in the past three years. Moreover, you must be employed by a company based in Florida and work a minimum of 35 hours per week. Other factors, such as your credit score, debt-to-income ratio, and income limits, will also be considered. Nevertheless, if you are a veteran, then you could automatically qualify for the program.

What is the Hometown Heroes credit score requirements?

The minimum credit score requirement to qualify for the Hometown Heroes Program is 640 for all loan types, and 660 if you are purchasing a manufactured house.