How Can You Combine Florida SHIP Funds with a USDA loan?
The goal of Florida SHIP funds is to provide affordable homeownership for first-time homebuyers. They can be used for a variety of purposes, including being combined with a USDA loan. In turn, SHIP funds can help maximize affordability!
Today, we’ll review the basics of Florida SHIP funds and how to combine them with a USDA loan. This helps with closing cost assistance.
Don’t forget, we have a ton of FREE USDA resources here! This includes our USDA Blueprint for Success and our Mortgage Comparison Chart. These amazing educational resources help break down the USDA process and guidelines.
State Housing Initiatives Partnership Program (SHIP)
Florida Housing Finance Corporation administers the State Housing Initiatives Partnership program (SHIP) to 67 counties in Florida. A homebuyer must qualify with the local government entity or housing office that is responsible for handling the program.
These 67 counties disperse funding on a first-come-first-serve basis. You must first determine if your county currently has funding. If your county does not have current SHIP funds, the next question to ask is, “When is the funding expected to be replenished?”
Homebuyer requirements for SHIP funds are handled at the local government level and can vary. Here are some common requirements:
- Applicants must be first-time homebuyers;
- Funding is on a first-come, first-serve basis;
- Maximum purchase prices can vary;
- Completion of a First Time Homebuyer Education course;
- SHIP income limits will apply.
Combining SHIP Funds with a USDA Loan
For homebuyers, SHIP funds are treated as a second mortgage (subordinate lien), so they must be combined with another mortgage type. When they are combined with a USDA loan it offers tremendous flexibility such as being utilized to pay for closing costs as well as reducing how much your borrower on the first mortgage.
SHIP funds are combined with your USDA mortgage to make up the total financing for the property. This may allow for:
- A portion of your overall financing to be at reduced terms;
- Increased affordability;
- Permit deferred payments;
- Loan forgiveness after a period of time.*
*Depending on your local program guidelines.
It’s vital for you to qualify for a USDA loan in order to be able to combine it with SHIP funds, but not all lenders work with SHIP Funds… but we do!
Due to our extensive experience and as a top-ranked USDA Approved Lender, we are able to coordinate both your USDA approval and SHIP fund financing at the same time as we prepare for closing.
Call (800) 806-9836 Ext. 280 or email SeanS@MPLX.org to discuss your scenario.
See you next week!