The Florida Association of Realtors says...
It's a Great Time to Buy in Florida!
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Stimulus package, low rates and mortgage options make homes affordable, attainable
The 2009 government stimulus package offered many incentives for buyers in today’s marketplace. For example, many homebuyers – especially those purchasing their first house or condominium – are eligible for local, state and federal incentive programs.
The American Recovery and Reinvestment Act of 2009 includes several home-buying incentives. Here are three examples:
- Homebuyer Tax Credit – The bill provides an $8,000 tax credit that is available to first-time homebuyers for the purchase of a principal residence from Jan. 1, 2009 through Nov. 30, 2009. The credit does not require repayment.
- FHA, Fannie Mae and Freddie Mac Loan Limits – The bill reinstates 2008 loan limits for FHA, Freddie Mac and Fannie Mae loans.
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The 90 Day Wait has been lifted on FHA flips. Read the full story here.
- Neighborhood Stabilization - The bill provides $2 billion in additional funding for the Neighborhood Stabilization Program (NSP). The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties.
Another home-buying incentive program is the Florida Housing’s First Time Homebuyer Program (FTHB). Qualified first-time buyers may receive a 30-year fixed interest rate mortgage loan through a network of participating lenders and lending institutions. Florida Housing also offers down-payment and closing-costs assistance to eligible borrowers, which can greatly reduce out-of-pocket expenses for the buyer. Even people who are not first-time buyers may be eligible for this program if they purchase a home in a specially designated target area. This program uses income and purchase price limits to determine eligibility.
More opportunities for first-time homebuyer grants
Local and regional incentive programs are available throughout the state. Some Florida counties and cities offer special financing assistance for low- or moderate-income buyers, especially those purchasing their first home. For information, talk with your local Board, a local lending specialist or go to your county government Web site.
Attractive mortgage rates
Attractive mortgage rates Mortgage interest rates in 2009 hover at historically low levels, providing a tremendous financial advantage for buyers with good credit. For example, the monthly principal and interest payment on a 30-year, fixed-rate mortgage of $100,000 at 5.5 percent would be about $570 – well below the cost of renting in most Florida markets.
“The Fed’s action to slash interest rates, coupled with the actions by the Federal Housing Finance Agency and the Department of the Treasury, has driven down interest rates to make the dream of homeownership once again attainable for thousands of Americans,” says Charles McMillan, president of the National Association of Realtors® (NAR).
In a boon for investors, Fannie Mae also changed its current limit of four financed properties per borrower to allow five to 10 financed properties per borrower, when eligibility requirements are met.
The Federal Housing Administration also has increased the maximum mortgage loan limit. As a result, FHA-backed loans are growing in popularity and now make up about 30 percent of new mortgage originations, according to NAR.
More on Fannie Mae’s Expanded Multiple Mortgages Policy
FHA mortgage limits in your area
Other Financing Options
Florida buyers have other options for financing a home, depending on their individual situation. One effective approach is seller financing: asking the current owner to hold a first or second mortgage in order to complete the sale. That means the seller would receive a steady stream of income (the mortgage payment plus interest) over the years, rather than an immediate lump-sum payment.
Some Florida employers offer housing assistance programs for relocating employees. This may be an option to explore in cases where the buyer is taking a new job with a large company, hospital or other organization.
A third approach is to see if the buyer has other assets, such as an income-producing property, a business, boat or recreational vehicle (RV) that could be used as security for a mortgage loan.
Smart home-financing resources
Why It's a Great Time To Buy Real Estate in Florida!
Pricing and Inventory: This is an ideal time for buyers to find a Florida dream home. Inventory is plentiful throughout the state and today’s lower prices offer true bargains for purchasers at all price levels.
Existing home/condo sales statistics
Favorable interest rates: Do the math. Lower rates multiply a buyer’s financial power, especially now when rates are near a 40-year low. Even one/half of one percentage point difference means a buyer could save more than $1,000 per year on a median-priced home. Buyers get more home for the money – a perfect scenario for families looking to upsize.
Check out the latest market rates
International pulling power
Florida homes offer financial value to foreign buyers: International buyers benefit from the weaker U.S. dollar, multiplying their purchasing power. Buyers also appreciate the relatively low costs of Florida property compared with similar homes in their countries. According the “2008 NAR Profile of International Home Buying Activity Study,” Florida accounted for 25.4 percent of all international purchases to lead the nation.
2008 NAR Profile of International Buyers in Florida (PDF)
NAR International Network
Location/lifestyle
With extensive inventories in Florida’s urban and suburban locales, buyers can live closer to work, schools and rapid transit lines. First-time homebuyers also have many affordable options in the townhome and condo markets. And let’s not forget Florida’s climate, world-class beaches, vibrant economy and diverse population.
Information provided courtesy of Florida Association of REALTORS