FHA down payment assistance in Maine and Florida

Think of it as two pieces. The FHA loan is your main mortgage. The assistance comes in as a separate, smaller loan behind it, called a second lien. That second loan helps cover part or all of the cash you need for the down payment.

FHA itself doesn't hand out the money. The assistance comes from the program, and the FHA loan, the lender, and the program all have to allow the setup. That's why it's worth bringing up on day one, not the week before closing.

Most lender programs I look at come in two shapes.

Forgivable second. You don't make monthly payments on it. If you keep the home as your primary residence and meet the program's terms for the required time, it's forgiven. Sell or refinance too early, and some or all of it may come due.

Repayable second. It works like a small loan with its own monthly payment. That payment counts in your debt to income ratio, so it affects how much house you qualify for.

Neither one is automatically better. A repayable second may make sense if it gets you in the door sooner. A forgivable second may make sense if you plan to stay put. I'll lay out both for your file.

The FHA minimum is 3.5 percent of the price. General education, not a loan offer.

That 3.5 percent can come from your own savings, a gift from family, down payment assistance, or a mix. Closing costs are separate from the down payment, and seller credits can help with those. General education, not a loan offer.

Each lender program sets its own rules. Here's what they usually look at:

• The home has to be your primary residence. FHA isn't for investment property.
• The property has to meet FHA standards, and condos have to meet FHA project approval.
• Your debt to income ratio has to work with both loans included.

Yes. FHA allows gift funds from family toward the down payment. The gift has to be documented, so expect a gift letter and a paper trail showing where the money came from. Whether a gift can be combined with assistance depends on the program. I'll check before you count on it.

Yes, up to HUD's limit. Seller credits go toward closing costs. In a slower market, it's worth asking for. Your agent and I can talk through how to write it into the offer.

FHA works across Maine, from Portland and Lewiston to Bangor and Aroostook County. Loan limits are set by county, so where you buy affects how big the FHA loan can be.

If you're buying a condo in Portland or Biddeford, check early whether the building is FHA approved. Some Maine buildings are, some aren't, and FHA can sometimes approve a single unit.

For the rest of the Maine FHA picture, see my Maine FHA loan page and my Maine first time home buyer guide.

The same FHA rules apply in Florida. What's different is the monthly payment. Insurance, flood coverage where it applies, and association dues can push your debt to income ratio higher, and that matters even more if you take a repayable second.

Florida condos need FHA project approval too. If the building isn't on the list, see my non warrantable condo guide for other options.

For more, see my Florida FHA loan page and my Florida first time home buyer guide.

• Read the repayment terms. Know exactly when a forgivable second becomes due if you sell or refinance early.
• Count the second payment. A repayable second adds a monthly bill.
• Compare the whole loan. Look at the full terms with and without the assistance before you decide.
• Line it up early. Assistance needs to be approved and documented before closing.

Want to know if assistance makes sense for you? Call or text me at (207) 615-7770, or email travis@travis.mortgage. Tell me where you're buying, roughly what you have saved, and whether family is helping, and I'll walk you through your options. I started in 2004 and I'm still here.