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I Love Palm Beach
I Love Palm Beach
Florida's Best First Time Home Buying Program: Your Path to Homeownership with Interest-Free Support
Ready to embark on the exciting journey of homeownership, but need a little extra support with down payment and closing costs? Dive into this episode, where we unveil the Florida Hometown Heroes program, designed specifically to assist Florida residents like you. You might be surprised to learn that you qualify for this fantastic opportunity! Discover how this program offers no payment, interest-free money that you only need to repay when selling or refinancing your home, allowing you to be more competitive in the real estate market.
Not only do we break down the eligibility requirements and uses for the Hometown Heroes program, but we also discuss the incredible benefits that come with it, such as competitive rates, no points or fees, and exemptions from intangible taxes and doc stamps. We also highlight the recent increase in the income cap, making it more accessible to a wider range of Florida residents. Learn the importance of partnering with a lender trained and authorized in this program, and how it can bring you one step closer to owning your dream home. Don't miss out on this valuable information – tune in now!
Hi, this is Rebecca Giacoba, with Stephanie Co, and we have another episode of I Love Palm Beach, the podcast, and it's another real estate edition. So one of the top things people have been asking is I'm a first time buyer, i need something special. what can you do for me? Well, we got some things for you to do, and it's not just for the heroes anymore. But first of all, stephanie, let's talk about who's considered a hero, and then let's talk about the topic first of all, Okay. Give a little background, all right.
Speaker 2:I love that you're wanting to dive in right away, but for those of you that don't know what we're talking about, we're talking about down payment assistance and closing costs assistance Perfect, okay.
Speaker 2:So there's obviously it's a very hot topic in real estate always is people want to buy a home, but they might not have been able to save up enough money to do so. Obviously, there's been some restrictions since the 2008 housing bubble and crash where we want to make sure that loans you know you're putting a certain amount down, there's no predatory lending tactics and that you know you're not just gonna walk away because you don't have any money in the deal, right. But that also can make it very difficult for people to be able to afford homes. So if you don't have the 20, 30 grand to just buy a normal property, what are your options? Well, typically you have these government programs that tend to be very bulky, cumbersome, a long process You might have. To some of them you have to enter like a lottery type system where you put your name in and you go to the first time home buyer course and then you wait and see, maybe if the county has a grant for you the next year or whenever the time is.
Speaker 1:And I'm gonna interrupt on that note. A lot of the problems with those programs is they're very lengthy. They might take 60 days. there's a lot of unknowns and sellers are not willing to put up with that. It is still a seller's market, so it's wonderful that people can get these awards, but none of the sellers want to use them.
Speaker 2:They can't compete.
Speaker 1:They're very risky.
Speaker 2:They can't get your offer accepted. What's the point of having the extra money? And that brings up another excellent point of why there's typically frustrations with them, because they have to go past sorry to say, but government workers a lot of time that are in-sundervise by your need to get housing right away. So hometown heroes was something gosh. I should have looked up the exact date. What has it been around for almost a year now And Rhonda Santa signed off on it, or Florida signed off on it to really boost the Florida economy and the housing market in particular? It has to be written by a Florida lender, which is nice that they're doing it on both the production side and also to help Floridians buy homes as well too. Absolutely.
Speaker 1:I love that part about it.
Speaker 2:Isn't it cool. A lot of misconceptions on what it is, so we're not gonna get into all that. Let's just tell you what it is. Okay, let's dig in. People ask all the time is it 25,000?, Is it 35,000? How much access and how much money am I given? What can I use it for? So it goes to the lesser of the two either the $35,000 gap or 5% of your loan amount. So it used to be 25,000, they raised up to 35,000 not too long ago on it, which means that even people that have $700,000 loan amounts are able to take the down payment assistance out.
Speaker 2:This isn't something that people are having to do on 100 or $200,000 properties. Oh wow, You can really use it on some higher priced homes. So that's a wonderful thing about it. Like I said, it gives you the 5%, so you can use that towards your down payment and towards your closing costs. And because it's not coming from the seller, you can actually get seller concessions or seller aid in closing costs on top of it too. There's no limit to doing all of that together. Or if you're maybe a veteran and you're doing a VA loan and the 0% down, you can use that 5% to your closing costs, probably have some money left over and use that to make your interest rate cheaper on your purchase, because you are now financing less money, because now that money has earned that, that sliver has shifted over to interest free money. So okay, so they give you the 35,000, the 5%, however much that ends up being for you. What does that mean? Is it free money? Is it money you have to pay back? How does it all work?
Speaker 1:Okay, good question.
Speaker 2:So it is free money as far as it's interest free, zero payment money, but you do pay it back. You pay it back when you sell off the home, So it's not going to expire at any other time. If you end up living in the home for 40 years, you're still going to pay it back when you sell the home. And another thing people like to know is can I refinance and still not have to pay that back? That's correct as well, So you can refinance. we call it resubordinate that.
Speaker 1:secondly, you want it.
Speaker 2:So it is a second lien that exists behind. However, i talk to people all the time. they say, oh, i don't want to take out a second mortgage on my house. Well, i just kind of turn it back around on them. I said, okay, well, let's play the normal scenario. Let's say you're not taking out the hometown heroes money, you're taking out a loan for $400,000. What's the difference between taking out a loan for $400,000 and taking out one loan for $380, and another loan for $20? Absolutely. If you can move that piece, that sliver, to a 0% interest rate, it's now lowering your payment and you're still paying back the exact same amount of money as you would have otherwise.
Speaker 1:Okay, one question I have. Is there a certain length of time when they must stay in the home?
Speaker 2:No, there's no restrictions on that. You have to be a first time home buyer. As far as the general definition of first time home buyer is more along the lines of that, you haven't owned a primary residence in the last three years. There's a lot of asterisks of what you need to do here in order to qualify. That are very easy. They're very easy qualifications. Most people meet them, but always consult a lender and they'll go over your specifics on it all. But it's a wonderful, wonderful program.
Speaker 1:Okay, one thing I wanna say let's define who heroes are. I wanna go over that. Who qualifies for it? Who qualifies?
Speaker 2:Ooh, this is juicy news right here because we're recording this first week of June right now. Next week there is a big announcement coming from eHousing and Florida Housing. Ehousing is who you make the reservations for the loans through. They're the top tier. Even they don't know all of the details. Florida Housing is the top top tier and they won't tell anyone the details yet. So rumor has it they're gonna be extending it to a lot of other people as well and releasing some of the criteria on it, so more and more people are gonna be able to access this program. It's a continually funded program, which means money goes into this program annually. They've been keeping it around $100 million a year right now. Wow, in the past six months so maybe it is only six months old of a program In the past six months they've done 50 million so far, so they've been pacing that $100 million reservation for it all, but it's not something that we think is gonna disappear anytime soon.
Speaker 2:When we, as the lenders, had to go through the training, they said that this is a program that they anticipate to go on for decades. They anticipate that this is gonna be a long standing part of Florida real estate now, which is really cool. But I have heard some lenders say get in right now, which is true. you also never know how long it's gonna last for sure. So definitely take advantage of it while you can, but it should be something that's going on for a while. Right now there's about 100 different careers that qualify. So if you're anything in a medical professional that has a certificate and that you're utilizing that certificate for your full-time job, you can't be working front desk in a nursing, in some doctor's office and using a hometown heroes because if you're in a county or whatever it is, even if you have that medical license.
Speaker 2:you're not using it in your day to day, so I wanna clarify that. but teachers, anyone in education fields, therapy That includes college professors, I believe. There's so many on the list, You can do it anything. that's more first response. so firefighters, police officers, obviously veterans as well too. There's a lot of things called the veterans exception, where there's extra incentives for the veterans that are using the hometown heroes program as well. There's a huge list massage therapists, chiropractors, I mean, you name it there's a lot of people on it.
Speaker 1:Can you get us a copy of that list?
Speaker 2:in case anybody reaches out.
Speaker 1:I'm gonna have that, and how would you feel about doing a seminar for these first-time buyers?
Speaker 2:I actually do it already. So I do wanna wait for the new announcements And we're definitely gonna do a lot of updates and we'll roll out a whole new seminar package once, or webinar or workshop, whenever that comes out. But it's a fantastic product. Now the other couple things that you should know about it all. One how are the rates? How does all that work? All right, well, hometown heroes.
Speaker 2:There's been some back and forth on. Some lenders say you know, or some realtors or real estate professionals will give a little bit of pushback. They say, oh, the rates aren't that good. I've found most of the time that the rates are actually better, the reason being, in hometown heroes they give you one rate, so no matter who the lenders that's writing it, it's one rate published daily And that rate is the same rate for anyone who qualifies, which means if you have a 640 credit score, you're getting the same interest rate as someone with an 800 credit score, and they make the rates really competitive for the 700 plus credit score people. So if you're buying a home with a lower credit score, going through hometown heroes is giving you automatic credits towards your interest rate.
Speaker 2:Number two there's never any points or never any fees on a buy down for the interest rate. On top of that, the program is ineligible, or I should say, exempt from intangible taxes and dock stamps, transfer taxes and dock stamps. So that means that in most of the time, that's about 55% of every dollar mortgage, as basically, like a sales tax, that's inside of your closing costs, it's one of the largest portions of your closing costs. So not only are they giving you money for your closing costs, they're generally genuinely wiping away some of your closing costs by taking off those dock stamps and they take away a lot of the lender fees. We're not allowed to charge a bunch of fees on there, or we are supposed to charge a whole lot less on the lender fees than other loans out there. So for most people they wipe away, you know, $5,000, $6,000 of closing costs, on top of giving you the money as well And on top of giving you a better interest rate than most other loan products out there.
Speaker 1:It's really fabulous, that is amazing. And there's no cap on the purchase price.
Speaker 2:There are caps on the purchase price. They vary by county. There's also a cap on your income on it, but again, it's very generous and they did just up it again. Okay, It went from in most counties or in Palm Beach County It was in the low six figures. Now it's kind of up to like the mid-100-ish range. Okay, It depends on your loan type that you're doing conventional VA, FHA and also veterans have certain exceptions on that as well.
Speaker 1:Oh well, that is wonderful news. I can't wait to see what that announcement's going to be.
Speaker 2:Yeah we're all excited to be And find out who else is eligible.
Speaker 1:Now I'm trying to think of all my people. Excuse me, I'm sorry. A little bit of a cold Would qualify for this program. It really is a game changer.
Speaker 2:It's really an awesome way to get into real estate because, at the end of the day too, there are certain things that are grandfathered in by you owning real estate. Sooner You grandfather in your property taxes, you grandfather some of these future costs, maybe even your home insurance. You get better rates on it by being a longer customer versus. You know, if you buy in a few years out, those property tax bills get higher because you don't have the ability to homestead it sooner.
Speaker 1:Yeah, you don't think about that. And rents are just so expensive. I have people telling me I want to wait, I just want to rent. I'm not sure what the market's going to do. Please don't wait. The rents are just going up and you have no control what your landlord's going to do. They can sell that property. The apartment complex can convert it to a luxury complex and raise the rates. There's no cap on what can happen. So if you want security and to be able to stay in your home, it's a better thing to do is to buy Absolutely.
Speaker 2:And one thing I would also caution you if you're looking into the hometown heroes program. unfortunately I've heard this quite a bit of people coming to me where they said my lender that I've been pre-approved with has told me that this is an awful program. They haven't really given me a lot of information about it, but they don't think this is a good program And I'll go and I'll look up and see if that lender is authorized or trained on the program and they're not, which means that they're steering you away from a program because they don't want to lose you as a customer Absolutely, which is very unfortunate.
Speaker 2:So find a lender. You can find me on flmortgagegalcom. You can call her to MortgageGal. You can talk to her back at you. You can find me as well through her. But speak to a lender that understands the ins and outs of it, not just someone who's licensed for it and approved for it, but someone that's done them.
Speaker 1:And I always say when in Florida use a Florida lender, there are too many things that we have in Florida that are particular for the state. going along with HOAs and flood insurance and insurance in general that out of state lenders don't know it can mess up your debt to income and you can lose the house that you deposited on Absolutely. And it's just so scary the things that I see people do. Yeah.
Speaker 2:So and the other wonderful part, kind of bringing it full circle to what we spoke about at the beginning this is something that you can be very competitive with in your offers because we underwrite it in-house. So our underwriters went through a course to be able to write the Sloan for you guys And we take care of you know everything post-closing on how it gets assigned through the county program. So you can still do those couple of weeks to a month closings if you're with a lender that typically does that type of turn time because they're the ones underwriting it, Instead of having to pass it to that government employee, like we spoke about before. So super competitive with the market, cheaper on your closing costs. It's really a win-win all across the board.
Speaker 2:There are a couple overlays on it. Overlays are extra restrictions as far as qualifications. Right now It's the, the employment type. Like we said, There is a little bit of an income cap and there can be a purchase price cap. It's way up there but there can be those. So always check with the lender on those and then it is something that You do have a little bit of a tighter debt to income ratio on it. Then you would only on FHA, because FHA you can typically push a little nerdy for yeah.
Speaker 2:Some of you that know know I. You can get a little bit of a higher payment on FHA Any other loan type. You can go to 56.99% on your debt to income ratio versus hometown hero says, okay, we got to stop you at 50, just like conventional stops you at 50, right, thanks to know. And you should also have a 640 credit score In order to qualify for hometown heroes. But if you speak to a good lender that knows how to lead you through the credit repair journey as well, you know even better.
Speaker 1:Okay, great Well, as we're finishing up, anything else you want to add about loans? you were saying something about Jumbo loans.
Speaker 2:Oh, I mean just updates in general about it all.
Speaker 1:I mean, just give us a couple pointers couple pointers for it all.
Speaker 2:I mean, there's When you're looking at the loan market. There's two main types of loans out there. There's what we call conforming and non-conforming loans. Conforming loans are going to be the ones that are subsidized and doors Insured by the US government, fannie Mae and Freddie Mac. So you've got VA, usda, conventional and FHA. Those are the loans that most Americans go into because they're the cheapest and they let you put the least amount of money down Right make sense, right reiner but they are the ones that require the most documents.
Speaker 2:So you know there are. Everything exists for a price. If you need to do a loan with no credit score and no Documents and not prove your income and everything else, there's loans out there for that, but they're going to be at a higher interest rate because they're higher risk to the lender. We're not underwriting you as much for the property and there's a lot of things in between where it's a little bit more documentation But still a better interest rate than the worst case scenario.
Speaker 2:So, all of that being said, portfolio loans go into that not or, i'm sorry, jumbo loans go into that non-conform Where there's extra restrictions sometimes on the documents for jumbo loans than there is on most other conventional loans. Well, every year those loan limits for conventional and FHA rise higher and higher and right now We're in a very competitive time in the market where, across the nation, you can pretty much get close to a hundred thousand dollar. It almost works exactly to where, if you do I'm sorry now hundred in eight hundred thousand dollar property at ten percent down, you're still in the conventional loan sphere.
Speaker 1:Oh, that is one easy here, yeah, so if you know.
Speaker 2:You know price points and everything. That's very generous. Once you go into jumbo, most of the time you're gonna have to do 20 percent down. So 800 is a great number to stay at if you have the 10 percent and you don't want to go over that out of pocket.
Speaker 1:Okay, well, thank you. That was great information. So if you guys have any questions I know we put a lot of information out there please reach out to me or Stephanie. We're here local in Palm Beach County. We also work the surrounding counties and Thanks for having another episode of I love Palm Beach.
Speaker 2:Bye guys.
Speaker 1:Thanks for tuning in.