Florida FHA Loan

What is an FHA Loan?

An FHA loan is a Government Backed Mortgage insured by the Federal Housing Administration (FHA). FHA loans require lower down payments, lower minimum credit score, and income requirements to qualify. Very popular with first-time homebuyers for many reasons.

 

 

What are the Advantages of FHA loans

Unlike other conventional loans, if you have a lower credit score, this type of loan could be ideal for you. With an FHA loan, you can purchase a home with as little as 3.5% down. Also, the down payment can be gifted from an acceptable gift/donor.

 

You can qualify for an FHA loan with a credit score as low as 500 with a 10% down payment. To be eligible for the maximum financing of 96.5%, you need a credit score of 580 or higher and a 3.5% down payment. (Private Mortgage Insurance is required).

 

What are the FHA loan requirements?

To be eligible for an FHA loan, borrowers must meet the following lending guidelines and requirements:

• The mortgage loan can apply only for your primary residence.
• Your front-end debt ratio (monthly debt payments, excluding a mortgage) should not exceed 31% of your gross monthly income. Lenders may allow a ratio of up to 40% in some cases.
• Your back-end debt ratio (mortgage, plus all monthly debt payments) cannot exceed 43% of your gross monthly income. Lenders may allow a ratio of up to 50% in some cases.
• You must make a down payment of at least 3.5% of the purchase price.
• Down payment can come from an acceptable verified gift from a relative or government program.
• A minimum FICO score of 500 to 579 with a 10% down payment or 580+ score with a 3.5% down payment.
• Steady employment history, or you have worked for the same employer for at least two years.
• Your income must be verified through pay stubs, bank statements, and federal tax returns.
• An FHA-approved appraiser must appraise the property and meet HUD property guidelines.
• You must wait at least two years after the discharge date of a Chapter 7 Bankruptcy. The discharge date should not be confused with the date bankruptcy was filed.
• A lender can consider approving an FHA loan application from a borrower who is still paying on a Chapter 13 Bankruptcy. The payments must have been made and verified for a period of at least one year.
• Any foreclosure within the previous three years typically will not qualify. (Lenders may make exceptions with extenuating circumstances.)
• Delinquent tax debt is ineligible unless you are currently in a repayment plan. Repayment Plan Tax liens are not required to be paid in full if documentation is provided, indicating you are in a valid payment plan.

 

What are the FHA loan limits for 2024?

For 2024, the maximum loan limit for FHA loans in high-cost areas is $929,200, and the minimum limit in low-cost areas is $498,257. FHA updates limit amounts each year in response to changing home prices.

 

Loan limits vary from one county to the next.

( Click Here for Florida FHA Loan Limits by County )

 

Want more information on qualifying for an FHA loan?

Contact one of our loan professionals for personal assistance.