How FHA Loans Work in Florida

FHA loans are an excellent program for Florida home buyers. The program provides several major advantages.

• A down payment of just 3.5% of the home value
• Competitive interest rates
• A minimum credit score of just 580
• No income limits
• Access to hardship programs in the event that you’re having trouble making your house payments

The home that you are buying must serve as your primary residence.

Note: specific requirements will vary from lender to lender.

Why are the terms of an FHA loan so good?

The Federal Housing Administration guarantees all FHA loans. FHA mortgage insurance protects lenders against losses. If a property owner defaults on their mortgage, the Department of Housing and Urban Development (HUD) will pay a claim to the lender for the unpaid principal balance. Because lenders take on less risk, they are able to offer more affordable mortgage loans to homebuyers.

You must still meet other basic requirements. For example, you will still need to show that you have a steady income source and that the mortgage payment will not exceed 47% of your gross income.

What do “competitive” interest rates mean?

FHA loan interest rates might be lower than would be expected for your credit score. For example, if you have a score of 680, you may still be eligible for the same kind of interest rates that someone with a 740 credit score would be able to receive.

Federal Reserve policies have a major impact on interest rates, but they don’t set them. Instead, they set policies that impact lenders and their profits.

Lenders are still free to set their own rates. When news sources report current mortgage rates, they’re offering a natural average rather than an exact, guaranteed rate.

Do I have to be a first-time home buyer to benefit from an FHA loan in Florida?

No. First-time home buyers often benefit from the program because of its relaxed credit and down payment requirements, and they’re often marketed as first-time homebuyer loans. However, all borrowers may apply for an FHA loan.

Why would anyone apply for any other type of loan? In some ways, FHA loans may be more expensive in the long term. You have to pay two types of mortgage insurance premiums, which are rolled into the loan. These are your upfront mortgage insurance premiums (UFMIP) and your monthly mortgage insurance premiums (MIPs). Both will drive up your monthly mortgage payment without helping you pay off the loan principal any faster.

Second, the FHA sets loan limits determined by the local housing market. If you want to buy more expensive homes than the median home prices in your county will allow, you may need a different type of loan. For example, here in Fort Lauderdale, you may take out a loan for up to $621,000 for a single-family home and $1,194,250 for a 4-family home (as of this writing).

Finally, these loans aren’t always a valid choice for people who are looking for rental, vacation, or investment properties. While you may purchase a 2, 3 or 4-family home with an FHA loan, you must intend to live in the property.

Is an FHA loan right for you?

Find out with a complimentary consultation! We offer a diverse range of mortgage loan options, including DSCR loans, tailored to fit your needs. By thoroughly assessing your credit, income, and objectives, we aim to connect you with the ideal loan program for you.

Call (305) 900-2012 to get started today.

FHA Loans Frequently Asks Questions

What is the minimum credit score for an FHA loan?

The minimum credit score is 500. If your score is 580 or higher, you can qualify with a 3.5% down payment. If your score is between 500 and 579, you will need at least 10% down.

Are all FHA loans assumable?

Yes, all FHA loans are assumable. This means that when you sell your home, a qualified buyer can take over your FHA loan instead of getting a new mortgage. The buyer must meet the lender’s credit and income requirements, and the lender has to approve the assumption.

How much FHA loan can I afford?

How much you can afford depends on your income, debts, credit score, and the FHA loan limits in your county. Most lenders want your total monthly debt (including the mortgage) to be around 43% or less of your income.

Can I buy a house with a 500 credit score?

Yes, it’s possible. With a 500-579 credit score, you may still qualify for an FHA loan, but you’ll need a 10% down payment and must show steady income and employment. The Doce Mortgage Group also offers other services like down payment assistance programs, jumbo loans, VA loans, conventional loans, and condo financing. They help with both first-time buyer programs and special loan types for people with different credit or income situations.

How many times can you get an FHA loan?

You can get an FHA loan more than once, but you can usually only have one active FHA loan at a time. If you sell or pay off your first FHA home, you can apply for another in the future.

Who can qualify for an FHA loan?

Anyone who meets the requirements can qualify. You need a credit score of at least 500, a steady income, a manageable amount of debt, and a down payment. You also must plan to live in the home as your primary residence.