FHA Home Mortgage LoanThe Federal Housing Administration loan program allows you to buy with as little as 3.5% down.
Buying With The Florida FHA Mortgage Program
The government started the Florida FHA mortgage program and the Federal Housing Administration with the intention of making home ownership a possibility for more Americans across the board. With FHA you get the opportunity to buy a home with a low 3.5% down payment without the need for a high credit score. However borrowers with great credit still utilize the program to for the low down payment and ability for the seller to contribute up to 6% of the sales price towards the borrowers closing costs. Generally there is a 3 year seasoning requirement for bankruptcies, foreclosures, and short sales. FHA financing also provides flexible terms, 15 and 30 year fixed rate mortgages are available as well as 7/1 and 5/1 arms or adjustable rate mortgages. You can also utilize FHA financing for the purchase of a manufactured home or what people still call mobile homes. Many find the guidelines and terms more favorable than conventional financing, depending on your specific circumstances. The program does however have loan limits. Find out more about the Florida FHA loan limits here.
FHA Credit Score Minimum
We go down to a 600 middle FICO score for FHA mortgage financing. This provides us the maximum flexibility to help borrowers across the credit spectrum. Keep in mind that the lower your credit score is the lower your debt to income ratios need to be. Also the higher your credit score is the better your chances are of procuring a lower interest rate.
There is mortgage insurance required by the government for a Florida FHA mortgage. They have an upfront funding fee of 1.75% which increases your loan amount by that much up front. The monthly mortgage insurance factor is .85%, recently lowered to make the program more attractive compared to conventional financing. The mortgage insurance is now for the life of the loan, another recent change made by HUD.
Closing Costs With FHA
Your closing costs are same as any other loan apart from the up front funding fee that’s financed into your loan. An advantage to FHA over conventional is that the seller can contribute up to 6% of the sales price towards your closing costs. With conventional at 3% down you can only get up to 3% from the seller towards your closing costs.
FHA Back To Work
The FHA has created a program that allows people who have experienced financial hardship to purchase a home in as little as 12 months after a bankruptcy, foreclosure, or short sale. It’s an excellent program but you must be able to show a 20% drop in household income preceding the negative economic event.
FHA Streamline 203k
You can finance repairs into an FHA loan with the streamlined FHA 203k program. The streamlined program has a maximum of $35,000 allowed for rehabilitation or improvements. The home must simply appraise high enough after the upgrades have been factored into the total value of the home.