Conventional Loan Down Payment Assistance in Florida — How HFA Preferred Works for Tampa Bay Buyers in 2026

When Tampa Bay buyers hear "down payment assistance," most assume it only applies to FHA loans. That assumption leaves real money on the table. Florida's HFA Preferred program pairs a conventional Fannie Mae mortgage with 3% to 5% forgivable down payment assistance — and for many buyers, it beats the FHA route outright on monthly cost, mortgage insurance, and long-term equity.

If you have a 660 or higher credit score and meet Florida Housing's income limits, a conventional loan with DPA may be the most cost-effective path to homeownership in Tampa Bay right now.

What Is HFA Preferred and How Does the Down Payment Assistance Work?

HFA Preferred is a conventional loan product administered by the Florida Housing Finance Corporation (FHFC) and originated through approved participating lenders. The underlying mortgage is a Fannie Mae 30-year fixed-rate loan — the same type a buyer would get going directly to a conventional lender, but with Florida Housing's down payment assistance layered on top.

The down payment assistance comes as a forgivable second mortgage equal to 3%, 4%, or 5% of your first mortgage amount. The second mortgage is forgiven at 20% per year over a 5-year term. That means if you stay in the home for five years, you owe nothing on the assistance. If you sell or refinance before the five years are up, you repay a prorated portion of whatever has not yet been forgiven.

For example, on a $350,000 purchase with a $340,000 first mortgage, a 5% HFA Preferred grant equals $17,000. If you have $3,000 in savings, that combination can cover a 3% conventional down payment ($10,200) plus a chunk of closing costs — closing a deal that would otherwise require $13,000 to $18,000 out of pocket. See our full guide on what buyers actually pay in closing costs in Tampa Bay to understand the full cash picture.

How Is HFA Preferred Different from an FHA Loan with DPA?

Both paths get buyers into homes with minimal cash out of pocket, but they work differently over time. Here is what actually changes:

Mortgage Insurance: FHA loans carry a mandatory 1.75% upfront mortgage insurance premium (MIP) rolled into the loan, plus an annual MIP that ranges from 0.15% to 0.75% of the loan balance and — for most buyers putting less than 10% down — lasts the full life of the 30-year loan. Conventional loans require private mortgage insurance (PMI) only until you reach 20% equity, then it cancels automatically. On a $330,000 loan, the difference in monthly MI can be $80 to $150 per month, adding up to $5,000 or more over five years.

Purchase Price Limits: HFA Preferred uses the conforming loan limit, which in Hillsborough County is $832,750 for 2026. FHA limits in Hillsborough County sit at $541,287. For buyers targeting homes in the $550,000 to $750,000 range, HFA Preferred is the only state-assisted path available.

Credit Score Floor: FHA loans can be originated with scores as low as 580 (with 3.5% down) or even 500 (with 10% down). HFA Preferred requires a minimum 660 FICO score. If your credit score is between 640 and 659, the FHA + DPA path may still be available to you.

Loan Assumption: FHA loans are assumable; conventional loans generally are not. In a rising-rate environment, FHA assumability has real value. In a stable or declining rate environment, it is less relevant.

Who Qualifies for HFA Preferred Down Payment Assistance in Florida?

Florida Housing sets program-level eligibility requirements that all participating lenders must follow. To qualify for HFA Preferred DPA in Florida, you generally need to meet the following criteria:

First-time homebuyer status: In most counties, HFA Preferred is limited to buyers who have not owned a principal residence in the past three years. There are exceptions — some target areas within counties may allow repeat buyers, and certain military buyers may receive waivers. If you are not a first-time buyer, read our guide on whether repeat buyers can get DPA in Florida.

Minimum credit score of 660: This is the floor for conventional HFA Preferred loans with down payment assistance. Some lenders may require 680 or higher for best pricing.

Maximum debt-to-income ratio of 50%: Florida Housing caps DTI at 50% for HFA Preferred loans. Most lenders will try to keep you under 45% for stronger approval odds.

Primary residence only: The purchased home must be your primary residence. Investment properties and second homes do not qualify.

Homebuyer education course: All borrowers must complete an approved homebuyer education course before closing. Online courses typically cost $25 to $50 and take four to six hours. Read more about what happens at a homebuyer education course.

Work with an approved lender: HFA Preferred DPA is only available through Florida Housing-approved participating lenders. You cannot apply directly through Florida Housing, and not every lender in the state participates.

What Are the Income Limits and Purchase Price Caps for HFA Preferred?

Income limits vary by county and household size. For 2026, Hillsborough County income limits for HFA Preferred are approximately $96,800 for a 1-2 person household and $112,280 for a household of three or more, though these numbers are adjusted annually and can change mid-year. Pinellas and Pasco County limits differ slightly. Always verify current limits with a participating lender or directly through Florida Housing's website, since the figures from the prior year may no longer apply by the time you apply.

The purchase price limit for HFA Preferred aligns with the conventional conforming loan limit — $832,750 in Hillsborough, Pinellas, and Pasco counties for 2026. In practice, the income limits are more likely to constrain eligibility than the purchase price caps, since a household earning under the income threshold will rarely qualify to carry a $800,000 mortgage under standard DTI guidelines.

For a detailed breakdown of income limits across Florida's DPA programs, see our complete guide to 2026 income limits.

Can You Stack HFA Preferred DPA with a County or City Program?

Yes — and this is one of the most powerful strategies available to Tampa Bay buyers. HFA Preferred's forgivable second mortgage can, in some cases, be combined with local county or city programs that sit as a third lien behind it.

In Hillsborough County, the county-level DPA program offers up to $10,000 to first-time buyers in unincorporated areas. The City of Tampa's Dare to Own the Dream program offers up to $50,000 for buyers within city limits who meet income and eligibility requirements. Pinellas County and Pasco County each have their own SHIP-funded programs with varying availability. Stacking a county grant on top of HFA Preferred DPA can eliminate virtually all out-of-pocket costs at closing for qualified buyers.

Not every combination is permitted — program rules govern which second and third liens are allowed. An HFA-approved lender experienced with DPA stacking can tell you exactly what layering is possible for your situation. For a deeper dive on this strategy, see our guide on how to stack multiple DPA programs in Florida.

Should Tampa Bay Buyers Choose HFA Preferred Conventional or FHA When Using DPA?

The right answer depends on your credit score, the purchase price you are targeting, and how long you plan to stay in the home.

Choose HFA Preferred conventional if: Your credit score is 660 or above; you are buying above the FHA loan limit ($541,287 in Hillsborough County); you plan to stay at least five years so the forgivable DPA fully vests; or you want to eliminate mortgage insurance as soon as you reach 20% equity.

Choose FHA + DPA if: Your credit score is between 640 and 659; you want the lowest possible down payment (3.5%); your purchase price is under the FHA limit; or you want the option of loan assumption down the road.

For buyers who qualify for both, running side-by-side monthly payment comparisons — accounting for MI differences — almost always reveals a clear winner for their specific purchase price and credit profile. A lender experienced with both programs can run those numbers for you before you go under contract.

Barrett Henry, REALTOR® with REMAX Collective, has helped buyers navigate both conventional and FHA DPA paths in Tampa Bay for over 23 years. Barrett can connect you with HFA-approved lenders who will run both scenarios side-by-side so you choose the program that puts the most money in your pocket, not just the one that gets you to closing. Call or text (813) 733-7907 to talk through your options.

If you are just beginning to explore the home-buying process and want a comprehensive roadmap alongside your DPA research, firsttimehomebuyertb.com has step-by-step guides for every stage — from understanding your financing options to making offers in Tampa Bay's competitive market. For the latest homes available in your price range right now, nowtb.com has the full Tampa Bay MLS search updated daily.