An HFA preferred 3 plus conventional loan is a home loan for first-time buyers with a minimum 620 credit score. It offers a competitive interest rate and down payment assistance.
Being a first-time homebuyer, the process of buying a home can be daunting and expensive as well. As such, it includes many financial situations that you may not have experienced earlier. However, the Florida state and the federal government have created special programs intended for people buying homes for the first time.
Knowing the available resources helps you to understand the challenging market by knowing how it works. That makes the overall process easy and helps you buy your dream house with the least effort. The mortgage and loan programs are worth looking into, especially the Florida HFA preferred 3 plus loan. Read on to find out more about it.
FLORIDA HOUSING ASSISTANCE FOR FIRST-TIME HOMEBUYERS:
When you are applying for a first-time homebuyer loan, Florida Housing is the place to get started. Created during the 1980s, it ensures that the residents can have affordable options at hand when it comes to buying homes in this challenging market.
As such, Florida Housing collaborates with the federal government, non-profits, and others to implement programs that might help people find the right home in this region. Florida Housing has different types of programs intended for developers, renters, and buyers.
However, potential buyers should meet certain income criteria and credit standards. This is the only way to qualify themselves for the Florida HFA preferred mortgage program.
Of all the programs, most of them consist of a 30-year mortgage loan with fixed interest rates for first-time homebuyers through lending institutions and participating lenders throughout the state. Of all the programs, the 30-year mortgage and the 3% plus 30-year mortgage is popular.
WHAT IS FLORIDA HFA PREFERRED 3 PLUS CONVENTIONAL LOAN?
The Florida Housing preferred conventional loan features a 30-year mortgage that helps first-time borrowers with an opportunity to set themselves free from private mortgage insurance. It is the most popular loan that Florida Housing offers. This is because the mortgage program reduces costs and allows people to qualify.
This program offers reduced mortgage costs to eligible buyers, purchase price limits, and higher program income compared to a traditional loan. Moreover, the process involves less paperwork for the participating lenders as well.
The qualified borrowers need to fulfill mortgage insurance that only covers about 18% of the entire value compared to 35% when they borrow 97% of the purchase cost of the home. Also, the monthly repayments are a bit low because of the cheap insurance premium that the loan offers.
When it comes to the Florida HFA preferred 3 plus mortgage, it is similar to that of the HFA conventional loans that you find around. But the preferred 3% plus conventional is slightly different from its counterpart.
The mortgage option comes with direct down payment assistance and a reduced mortgage insurance premium. However, this comes as HFA preferred grant. It means you don’t have to pay it back, and it’s a 30-year loan with a fixed rate. Also, the HFA 3% Plus Preferred conventional Loan needs to be your first mortgage.
FLORIDA PREFERRED LOAN AND CONVENTIONAL LOAN: THE DIFFERENCES
The Florida Housing preferred loan offer buyers to obtain a 30-year mortgage at a fixed and competitive interest rate. Besides, the loan allows buyers to lock in their monthly housing payments for a specific term.
Also, it provides a scope for long-term stability regarding their mortgage payments. Here is a comparison between Florida’s preferred and conventional loans.
- The preferred loan program comes with an affordable interest rate.
- It offers a fixed-rate 30-year mortgage.
- The preferred loan program has the lowest closing costs
- The program offers minimum income limits
- Florida Housing preferred conventional loans tend to follow a stringent underwriting process regarding credit requirements compared to conventional loans.
- Apart from that, the program requires homebuyers to take an education class.
HOW TO QUALIFY FOR THIS TYPE OF LOAN?
If you look forward to grabbing the opportunity for a homebuyer program for the first time, you should align with some qualifications. In short, if you want to be on the list of qualified buyers’ you have to meet certain requirements.
To get selected for the Florida HFA 3% plus conventional loan program, homebuyers shouldn’t exceed a specific income level. However, that will vary depending on factors such as how big the house should be and what region they are from. Moreover, there are limitations on the cost of the house. However, that too varies by the county one life in.
Apart from that, here are some important things that are considered standard regardless of the 67 counties that fall under Florida.
- The applicant should have a FICO score of 620 or even higher.
- The property should be the buyer’s main residence.
- The property should be in Florida.
- The buyer has to undertake 6 to 8 hours of education course.
While some of the qualifications are obvious, the most important of all is the credit score which holds a special place. In other words, your FICO score becomes an important factor when it comes to applying for these types of conventional loans. On the other hand, loan defaults, maxed-out credit, and late payments can hurt your credit score significantly.
Therefore, it is necessary to have a credit report from any major credit bureaus and find out where you stand. If you have a low score, make sure to improve them within the upcoming months. That way, you can make an attractive candidate for the first-time homebuyer mortgage program.
Your finances might be strong, your income might be below, or you are concerned about your credit history. Whatever the case, visit the Florida Housing official website and know the qualifications for the program. That way, you can avail of the loan without worries.
WHAT ARE THE BENEFITS OF THE HFA PREFERRED 3 PLUS CONVENTIONAL LOAN?
- Monthly mortgage insurance rates are low.
- Cancellable mortgage insurance.
- Down payment as low as 3%.
- The HFA preferred grant helps diminish your down payment burden to a great extent.
- Perfect for people looking for extra help in terms of down payment.
