City of Marathon
Down Payment Assistance
Secure up to $20,000 in 0% interest funding to purchase your home in the Florida Keys.
How the Program Works in 2026
The City of Marathon provides significant assistance to help workforce households overcome the barrier to entry in the Keys real estate market.
Up to $20,000 Assistance
Funds can be used for down payment and closing costs. The loan sits silently in the background with 0% interest.
Forgivable Over 30 Years
No monthly payments are required. The loan is structured to be forgiven over a 30-year period as long as you occupy the home.
Stackable with SHIP
Updated for 2026: The City will take a "tertiary" lien position, allowing you to combine this with Monroe County SHIP funds for maximum buying power.
2026 Income Limits & Financial Requirements
To qualify for the 2026 program, your household income must fall within the specific HUD-defined categories for Monroe County. While the program prioritizes Low and Moderate Income households, funding is often available for Middle Income applicants up to 160% AMI.
| Category | AMI % | 1-Person Household | 4-Person Household |
|---|---|---|---|
| Very Low | 50% | $45,650 | $65,150 |
| Low | 80% | $73,000 | $104,250 |
| Median | 100% | $91,250 | $130,313 |
| Moderate | 120% | $109,500 | $156,375 |
| Middle | 160% | $146,000 | $208,500 |
Financial Contribution Requirement
To ensure sustainable homeownership, applicants must contribute at least 3.5% of the purchase price (or the minimum required by their first mortgage lender, e.g., FHA requirements) from their own funds. This demonstrates financial readiness to the City of Marathon Planning Department.
HQS Inspection Required
Ensures safety & quality standards
Eligible Properties & Standards
To qualify for the $20,000 assistance, the property must be your primary residence and located strictly within the City of Marathon limits.
- Property Types: Existing single-family detached dwellings or single-family units within a multi-family dwelling (condos/townhomes).
- Purchase Price Cap: The maximum sales price is tied to HUD data. For 2025-2026, homes must typically be under $566,400 (subject to monthly HUD updates).
- Quality Standards: All homes must pass a HUD Housing Quality Standards (HQS) inspection to ensure the home is safe and sanitary before purchase.
Understanding the "Forgivable" Loan
The City of Marathon structure is designed to promote long-term homeownership. Here is the fine print on how the 0% interest terms work.
0% Interest & Payments
You make no monthly payments on this loan. It sits silently in a secondary (or tertiary) lien position, allowing you to focus your budget on your primary mortgage.
30-Year Forgiveness
The loan balance is prorated and forgiven over a 30-year period. As long as you continue to own and occupy the home as your principal residence, the debt is gradually erased.
Recapture Terms
If you sell, refinance (cash-out), or convert the home to a rental before the 30-year term ends, the remaining unforgiven balance becomes due. The City does not subordinate for cash-out refinances.
Who Qualifies?
The program targets "First Time Homebuyers" (no ownership in the last 3 years) who live or work in the area.
- Residency/Work: Must be a resident of Marathon OR work in Marathon (51% of income) while living in the Extended Qualification Area (Big Pine to Conch Key).
- Income Limits: Serves Very Low to Middle Income households (up to 160% AMI). See form for specific 2026 limits.
- Property Type: Existing single-family homes or condo/townhomes located within City of Marathon limits.
- Funds to Close: Must contribute at least 3.5% of purchase price (or FHA minimum) from own funds.
Note: Private mortgage financing is not eligible. You must qualify for an institutional first mortgage.
Your Path to Homeownership
Follow these steps to secure your down payment assistance.
Get Pre-Qualified
Secure a pre-qualification letter from an institutional lender (Bank or Mortgage Company). Hard money or private financing is not accepted.
Check Eligibility
Use the form below to verify if your income, residency, and employment status meet the City's specific 2026 guidelines.
Apply with City
Submit your full application to the City of Marathon Planning Department. Remember, you can now stack this with SHIP funds (tertiary lien).
Closing & Funding
Upon approval, the City wires the $20,000 directly to the closing agent. You move into your new home with 0% interest on the assistance.