Can Florida SHIP Funds be combined with a USDA loan?
Today’s video will show you how the Florida SHIP funds program can be combined with a USDA loan to help maximize affordability for first-time homebuyers.
Also, for those who are not familiar with Florida SHIP funds, I will cover the
basics so that you will be in the know on how it can assist first-time homebuyers.
Don’t forget, if you have not yet done so, please download our USDA Blueprint for Success with the link below.
This educational resource helps break down the USDA process step by step and is great for both Realtors and homebuyers alike!
As a starting point, the State Housing Initiatives Partnership program (SHIP) is administered by the Florida Housing Finance Corporation and is distributed to all 67 counties on an entitlement basis with the goal to provide affordable homeownership to very low, low, and moderate income families.
While SHIP funds can be used for a variety of purposes, we are going to focus on the “down payment and closing costs assistance” portion of the program today.
So, how do Florida SHIP funds work?
First, a buyer must qualify with their local housing office or government entity responsible for handling the program.
While individual local county SHIP guidelines can vary, common requirements can be:
1. Applicants must be first-time homebuyers;
2. Funding is on a first-come, first-serve basis;
3. Maximum purchase prices can vary;
4. Completion of a First Time Homebuyer Education course; and
5. SHIP income limits will apply
SHIP funds are considered a second mortgage, which means the final amount awarded to a SHIP funds applicant would be combined with your USDA first mortgage to make up the total financing for the property.
With that being said, since SHIP Funds is a secondary lien, it is critical to get your USDA loan qualifying secured in order to have a first mortgage for your SHIP funds to be combined with.
Additionally, even though USDA Loans allow for“No Down Payment”, SHIP Funds can be combined with a USDA loan to help with closing cost assistance and because it is treated as a second mortgage (subordinate lien), it allows for a portion of your overall financing to be at terms which offer increased affordability that may permit deferred payments or even allow for loan forgiveness after a period of time, depending on your local SHIP program guidelines.
Key Reminders
In summary, here are key points to remember:
- SHIP Funds qualifying requirements and eligibility amounts are handled at the local government level
- Does your area have funding?
- If not, when is funding expected to be replenished?
- Have you been qualified for your first mortgage USDA loan yet?
Thankfully, that is where we step in to help! Because of the experience we have working with SHIP funds, Metroplex Mortgage Services is able to coordinate both your USDA approval and SHIP financing at the same time, while we prepare for closing.
I realize that we covered a lot today and even though not all lenders work with SHIP Funds, because of the experience my office holds with processing this program side-by-side with a USDA loan, homebuyers are able to make the most of their qualifying ability.
As a top-ranked USDA Approved Lender, we are here to help so just call or email to discuss your scenario and let us show you the “Metroplex” difference!
SeanS@MPLX.org
(800) 806-9836 Ext. 280
I want everyone to make it a great day and I look forward to seeing your right here for the next tip of the week!
P.S. – You can download our “USDA Blueprint for Success” by CLICKING HERE
