The 'Florida Housing Opportunity Program' allows qualifying buyers the opportunity to use the 'First Time Home Buyer Tax Credit Program' as down payment monies. Under provisions of the Fedral Tax Credit program, FHA-approved lenders and non-profits were granted the ability to provide loans for access to the credit for down payment assistance. Instead of creating new offices, Florida chose to utilize it's existing home buyer assistance offices known as SHIP. Sounds great and easy, but buyers need to be fully aware of the program before trying to take advantage of it's benefits.
1. The program is administered by local Florida SHIP offices and guidelines for eligibility apply in terms of income level, what is considered 'eligible housing', and purchase price levels. (Click here for the SHIP website)
2. The monies provided for down payment are a loan that the qualifying recipient agrees to repay the loan within 18 months and namely from a qualifying recipient's 2009 income tax refund. Remember, the Tax Credit is not a guaranteed refund check. The Tax Credit applies to one's tax liability for the year. Therefore if the recipient is liable for $1,000 in income tax to be paid and qualifies for the maximum $8,000 tax credit, the tax refund to the recipient is $7,000 ($8,000 - $1,000) and are still obligated to repay the $8,000 on the loan for the down payment. As you can see, the recipient would still need to come up with and additional $1,000 to repay the loan for the down payment.
3. The program is planned to begin August 1, 2009 although it effectively kicked off July 1, 2009 for qualifying Florida Home Buyers. Because monies to fund the program are built up from existing home sales doc stamps income; this may not be the same for all localities due to filing timelines from the local governments. Check with your local Realtor or SHIP office to find out if the program is available.
The biggest difference between the programs is that tax credit does not have to be repaid. The credit reduces an eligile person's tax liability by up to $8,000. In additional, because the tax credit program is Federal and the down payment assistance program is State; buyers may qualify for the Federal and not the down payment program. Again, the down payment assistance program will be determined by the local Florida SHIP office.
This is obviously a great option for qualifying home buyers. Consult with your Realtor or the local SHIP office for more information or direction.