What is the Down Payment Assistance Program?
The SHIP Program is a loan that provides down payment assistance for families/individuals that
meet the eligibility guidelines. The four main eligibility requirements are as follows:
- Applicants must meet income limits for family size without going over.
- Ability to qualify with a financial institution (obtain a pre-approval)
- Must participate in a First Time Home Buyers Education Class and receive a class
certificate upon completion. - Must not have owned a home anywhere within the three previous years (public record
searches are conducted for verification)
Eligibility is based upon household size and anticipated gross annual income. Gross annual
income is defined as any working member of the household over 181 years of age and any other
member of the household receiving other forms of income such as Social Security benefits,
pensions, retirement, etc. Anticipated is defined as gross income earned projected for a period of
12 months ahead from the date the Income Certification Form is completed.
How much money is available?
Eligible individuals and families can receive up to $10,000.00 to put towards their down
payment and closing costs for the purchase of a home. For a home being purchased which needs
renovations, an individual or family may receive up to an additional $20,000.00 for approved
renovation cost.
The SHIP Loan is Subordinate Financing; it is given as a Second Mortgage Agreement, but you
do not make payments on it. The loan is paid back when one of these situations occurs:
What are the loan terms?
- The home purchased is no longer your primary residence (i.e., you move out of the home;
therefore, it is no longer homesteaded, and/or you rent out the home) - The home is sold.
- If the buyer is deceased and wills the home to someone else (cannot be assumed)
- The homeowner wishes to refinance their first mortgage for cash out (this includes bill
consolidation and equity lines of credit) - The loan is forgiven at the end of the 30-year mortgage term if the property has remained
the homeowner's primary residence for the full 30 years. - Income from earnings more than $480 for each full-time student 18 years or older is excluded (not including the
head or co-head of the household and spouse);
What are the steps to apply for down payment assistance?
The following guideline is “recommended” for best results in applying for down payment
assistance:
1. Obtain Pre-Approval from reputable mortgage lender or bank (mandatory)
2. Schedule First Time Homebuyers Education Class
3. Make appointment to apply for SHIP funds.
4. Contact Realtor or Builder (wait to sign contracts)
One of the reasons for obtaining a pre-approval from a mortgage lender first is that it is a
mandatory requirement prior to scheduling an appointment to apply for the funding. If our
office does not have a pre-approval letter from the applicant’s financial institution, an
appointment will not be scheduled.
The First Time Homebuyers Education Class needs to be scheduled as soon as the applicant(s)
are pre-approved with a lender. This is because it is in the best interest of the applicant to learn
about mortgage loan processing and to learn tips on what to watch out for before signing real
estate contracts. The counselor and speakers at the class provide guidance and information to
watch out for so that the applicants do not get taken advantage of.
**Note: Obtaining a Class Certificate does not mean that applicant(s) are approved for SHIP
funds. Applicant(s) must apply for SHIP funds separately.
If for some reason you cannot keep the appointment, please call to cancel and/or re-schedule,
keeping in mind that not showing up for your appointment without calling our office can delay
processing not only for yourselves, but for others as well.
Keep in mind when calling to schedule an appointment that you may not be able to get in
immediately. This is also why it is important to follow these steps.
If there is more than one adult (i.e.; husband & wife, and/or significant other) in the household,
both parties must take the class. If the applicant does not register for the class as soon as
possible, it may hold up closing on the home because the class certificate must be in the
applicant’s file prior to requesting funds.
Applying for SHIP funds is listed third because the first two steps should be taken care of prior
to the appointment. Applicant(s) should secure all their financing prior to signing contracts to
protect themselves. Not securing SHIP funds first may also cause the applicant(s) to lose the
contract on the home because they could not get processed in time and the seller/builder may not
give an extension.
Many people make the mistake of signing a Real Estate Contract before applying for SHIP funds
when in all practicality it should be the very last step. Signing a Real Estate Contract or
Construction Contract prior to your SHIP appointment will not get an earlier appointment.
Expected time frame for processing an application:
From the date of the initial SHIP appointment, processing can take from two to six weeks or
more because of the verification process. There may also be other factors involved that may
require more time for processing. This is yet another reason not to sign contracts before the
appointment.
During the appointment, Third-Party Verification Forms must be signed by the client(s) and sent
out for verification. Determining eligibility is dependent on receiving these forms in a timely
manner. Once all Third-Party Verification Forms are received, the Income Certification Form
(ICF) can be completed.
The SHIP Loan Processor will contact the applicant(s) to come in and sign off on the Income
Certification Form once it is completed. The file then goes to the Executive Director for final
approval. Once the Executive Director gives final approval, the SHIP Loan Processor will
prepare and mail the Letter of Approval (LOA) to the applicant(s). If the applicant(s) do not
meet the eligibility requirements, an ineligible letter will be mailed.
Types of down payment assistance available:
There are three types of down payment assistance available as mentioned above. This outline
explains the documentation needed from your lender to process a Request for Payment. They are
as follows:
Existing. You may receive up to $10,000.00 towards down payment and closing costs for the
purchase of an existing home. The approval is valid for a period of ninety (90) days from the
date of the LOA.
The following DOCUMENTS ARE REQUIRED FROM THE LENDER SEVEN (7) TO
TEN (10) BUSINESS DAYS PRIOR to a Request for Payment to be processed for closing:
Final mortgage approval letter from financial institution stating:
- The legal name of the first mortgage holder (lender)
- The mortgage amount.
- The monthly payments (including PITI)
- The closing agent and address
- Signed Real Estate Contract
- Uniform Underwriting Transmittal Summary or MCAW (including amount of
Subordinate Financing (SHIP Funds) requested - All pages of the Uniform Residential Appraisal Report
- Copy of the Certificate from First Time Buyers Class
- Proof of Title Commitment
Existing with Construction Upgrades; You may receive up to $10,000.00 for down payment
assistance, closing costs and up to an additional $20,000.00 for necessary construction
improvements. The approval is valid for a period of ninety (90) days from the date of the LOA.
The following DOCUMENTS ARE REQUIRED FROM THE LENDER SEVEN (7) TO
TEN (10) BUSINESS DAYS PRIOR to a Request for Payment to be processed for closing:
Final mortgage approval letter from financial institution stating:
The legal name of the first mortgage holder (lender)
The mortgage amount.
The monthly payments (including PITI)
The closing agent and address
Signed Real Estate Contract
Uniform Underwriting Transmittal Summary or MCAW (including amount of
Subordinate Financing (SHIP Funds) requested
All pages of the Uniform Residential Appraisal Report
Copy of the Certificate from First Time Buyers Class
Proof of Title Commitment
Home Inspection Report by a licensed home inspector
Signed agreements/contracts (by both parties) for all
construction/improvements.
Copies of contractor’s license(s)
Schematic drawings for room additions
The contractors have six months from the date of closing to complete the work. It is up to the
recipient(s) to make sure that the work is completed within this time frame. It is the
responsibility of the SHIP recipient, to follow up on the progress.
Once the work is complete, the contractor(s) and the recipient(s) must notify the SHIP Loan
Processor that the work is completed. The contractor(s) must provide the SHIP Loan Processor
with either the permit number(s) and/or the final inspection number(s) from the Hernando
County Building Department for confirmation. The recipient must sign an Affidavit of
Completion also before funds can be released to the contractor(s).
Once the final inspection is confirmed with the building department and the recipient(s), the
SHIP Loan Processor will issue a Release of Funds Statement to the title company for them to
process payment directly to the contractor(s). If there are monies left over, they come back to
Hernando County and will be applied as a principal reduction to the recipient(s) Second
Mortgage Agreement and Promissory Note with the County.
The applicant(s) must only use the contractor(s) they submitted to SHIP. If they do not, they will
be responsible for payment. The recipient(s) are also responsible for any monies above and
beyond the bid submitted in their file as an out-of-pocket expense. Therefore, it is important to
get the contractor(s) to be as close as possible with their final figures before they are submitted to
the SHIP Loan Processor.
The following upgrades that could meet the requirements for Construction Funds as defined by
Florida Statue 420.9075 are as follows:
Increase actual living space (porches and/or lanais not included)
New Roof (must be at end-of-life expectancy)
Bringing entire house up to current building codes including electrical, plumbing, or
any structural deficiencies
Septic systems, water heaters, central H/A
Full window replacement for weatherization purposes
Anything cosmetic, such as replacing carpeting, floor tile, or painting do not fall within the
SHIP Statues.
New Construction; You may receive up to $10,000.00 towards down payment and closing costs
for the purchase of a newly built home. The definition of a new construction home is when any
new home’s Certificate of Occupancy is less than six months of age. The approval for New
Construction is valid for a period of twelve (12) months from the date of the LOA.
The following DOCUMENTS ARE REQUIRED FROM THE LENDER SEVEN (7) TO
TEN (10) BUSINESS DAYS PRIOR to a Request for Payment to be processed for closing:
Final mortgage approval letter from financial institution stating:
The legal name of the first mortgage holder (lender)
The mortgage amount.
The monthly payments (including PITI)
The closing agent and address
Signed Construction Contract
Uniform Underwriting Transmittal Summary or MCAW (including amount of
Subordinate Financing (SHIP Funds) requested
All pages of the Uniform Residential Appraisal Report
Copy of the Certificate from First Time Buyers Class
Proof of Title Commitment
Certificate of Occupancy
Miscellaneous
**Up to signifies how much Down Payment Assistance (DPA) and closing costs are needed to
close on the home from the Underwriters.
**Funds are limited, and all loans are made on a Funds Available Basis only.
**Interest Rates must be below eight percent (8%) for buyers.
**Lenders/Brokers must be licensed in the State of Florida.
**Unrepaired sinkhole properties are ineligible.
**Home buyer must be able to provide proof of catastrophic coverage on their homeowner's
insurance policy for a repaired sinkhole property to be eligible along with proof of repair.
********Manufactured/mobile homes are not eligible********
**Checks are cut on Fridays only and released AFTER 3:30 p.m.
At/After the Closing
Once the applicant(s) have closed on their home, the following documents are needed from the
title company:
1. Recorded Second Mortgage Document & Recorded Promissory Note (9 pages)
2. Copy of First Mortgage Agreement
3. Copy of closing Settlement Statement (HUD)
4. Copy of Certificate of Occupancy (New Construction)
Letter of Approval
The Letter of Approval (LOA) is valid for a total of 90 days for Existing home purchases and
Existing home purchases with Construction Upgrades. The Letter of Approval (LOA) is valid for
a total of for 365 days for New Construction purchases. If the applicant(s) do not close on a
home within the expiration date of the LOA, a thirty-day extension can be given if the
applicant(s) contact the SHIP Loan Processor prior to the expiration date of the LOA. If a
closing does not take place after the thirty-day extension, the applicant(s) will need to re-certify.
All income and asset information will then have to be re-verified to obtain a new Letter of
Approval. If there have been any significant increases since the initial verification process and it
puts the applicant(s) above the income limits, they will then receive an ineligible letter.
The Qualifying Income Limits are as followed:
Number of Persons in Household
**The amount listed is the maximum gross annual combined household income of all
household members.
**Contact our office to find out what income range funds are currently
available in.
Eligible Properties
The maximum allowable purchase prices for homes are as follows:
EXISTING HOMES ......................................................................................$349,525.80
NEW CONSTRUCTION HOMES…………………………………………$349,525.80
********Manufactured/mobile homes are not eligible********
Applicants cannot have received any previous loan through the County’s Down Payment
Assistance Program.
The total household income cannot exceed these amounts for family size at all. The State does
not allow any flexibility for these guidelines.
**Please Note: The Homebuyer’s Class Certificate is valid for one year only. Should the
certificate expire prior to SHIP funds being requested, the applicant(s) will need to re-take the
class or request an extension on their current certificate.
Attached is the list of documents needed from the applicant(s) for the SHIP appointment.
For appointments, contact:
Tania Franklin
SHIP Loan Coordinator
Hernando County Housing Authority
Ph. (352) 754-4087
Fax (352) 754-4168
tfranklin@hernandocounty.us
SHIP WORKSHEET
(State Housing Initiatives Partnership)
CHECKLIST OF ITEMS TO RETURN WITH YOUR APPLICATION PACKET
To take advantage of the Hernando County Down Payment Assistance Program, you must
submit the following documents with your application packet for any applicable household
member:
Four most recent consecutive pay stubs
Most recent tax return from all members of the household 18 years of age and older.
Proof of Social Security or SSI annual benefit statement(s)
If self-employed or an independent contractor; past two years tax returns [signed
1040’s] and YTD Profit and Loss Statement from a licensed public accountant
Most recent 2 months bank statements showing all accounts; checking, savings, CD’s,
money markets, 401K’s, stocks, bonds, IRA’s, retirement, pensions, etc.
Copy of most recent divorce order since last tax return was filed.
Copy of original Child Support/Alimony Statements (payment printouts are not
acceptable) if a Contempt of Court has been filed with the Department of Revenue for
nonpayment, we will need a copy of that order.
Property Appraiser’s assessed value if you own land.
Driver’s License(s)/Florida ID and Social Security Cards (all H/H members) birth
certificates for all children
Employer’s address(s), phone numbers, email address and fax numbers