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Florida FHA Loan Requirements for 2018 & FAQs

Video: Current FHA guidelines

If you're looking for a Florida FHA loan, our rates can't be beat. That said, as Florida's top-rated mortgage broker, we regularly field a number of great questions from first-time home buyers about everything from county borrowing limits to how student loans could impact your eligibility.

Below you'll find our straightforward answers to these seemingly not-so-straightforward Florida FHA loan questions.


Basic Florida FHA Loan Questions

What is the maximum Florida FHA loan amount in 2018?

Maximum loan amount vary by county for traditional forward FHA loans.  The current base FHA loan limit in most of Florida counties for a one-family home is set at $294,515.00.

What is the down payment for FHA loan?

The borrower’s minimum required investment is 3.5% of the purchase price/ adjusted value of the property.  The source must be from borrower’s own funds or from an acceptable gift/donor.

What is the minimum credit score required for a Florida FHA loan and first-time home buyers?

A tri-merged credit report is required with a middle credit score of at least 620.  Depending on overall credit, sometimes borrowers may qualify with middle scores as low as 580.  In some instances, where a co-borrower does not have any credit scores, FHA will consider approval so long as the primary borrower meets the minimum credit score requirements and has more than 50% of the qualifying income with a minimum of 3 tradelines active for last 24 months.  Regardless of credit scores, FHA still evaluates overall credit history to determine if borrower gets approved eligible findings that meet FHA approval guidelines.

What is the maximum seller contributions/concessions for Florida FHA loans?

Seller and other third party contributions are limited to 6% of the sales price.


Credit & Debt Questions

What is the FHA waiting period for borrowers with previous bankruptcy?

Bankruptcy does not automatically disqualify a borrower from obtaining an FHA loan.  Minimum 2 years since discharge of chapter 7 bankruptcy.  Borrower with less than 2 years’ discharge may qualify for financing so long as they meet the extenuating circumstances as defined by FHA/HUD.  Same rule applies for borrower with chapter 13 bankruptcy.  However, borrower with chapter 13 bankruptcy may still qualify if the bankruptcy has been discharged less than 2 years if the lender is willing to do a manual underwrite with satisfactory payment history under the chapter 13 plan.

How does FHA treat charge-offs for credit card and installment loan?

Charge-off accounts are not included in borrowers’ debt.

How does FHA treat collection accounts for credit card and installment loan?

Non-medical collection accounts when the cumulative outstanding balance is greater than $2,000 borrower may either pay-off the balance or for the purpose of DTI (Debt-to-Income), provide proof payment plan or lender must use 5% of the outstanding balance and include it in the borrower’s DTI calculation.

What about borrowers applying for FHA loans that are currently in consumer credit counseling?

If the file receives automated Approve/Eligible findings then no documentation is required from the borrower.

Can I still qualify for an FHA loans if I have delinquent child support?

Delinquent child support must be paid current or in a payment plan.

What are the FHA guidelines for delinquent federal tax debt?

Borrowers with delinquent tax debt are ineligible unless currently in payment plan.

What are the FHA guidelines for borrower with previous foreclosure and deed-in-lieu?

Foreclosure waiting period is measured from the date of title transfer.  3 years must have elapsed from the time title transferred. If the foreclosed loan was an FHA loan, the 3-year waiting period is based on the date the FHA claim was paid (e.g. foreclosure 11/12/12, FHA claim dates was 7/12/13, the 3-year waiting period ends 7/13/16).  Borrowers with foreclosure/DIL within 3 years of case number assignment that was due to documented extenuating circumstances may be eligible if the borrower has re-established good credit since the foreclosure. A downgrade to manual underwriting is required. If the foreclosure was included in the bankruptcy, the foreclosure waiting period still applies. HUD treats the foreclosure and BK independently, not as a single event.

What are the FHA guidelines for borrowers with previous short sale and/or pre-foreclosure?

The 3-year waiting period from date of title transfer still applies unless they were current at the time on short sale.

Can you get an FHA loan if you have a tax lien?

Borrowers with delinquent tax debt are ineligible unless currently in repayment plan. Repayment Plan Tax liens are not required to be paid in full if documentation is provided indicating the borrower is in a valid payment plan.

The following is required:

  • The borrower must have made a minimum of 3 months of scheduled payments and documentation of the payments is required.
  • The payment must be included in the DTI calculation.
  • The borrower cannot prepay the payments to meet the 3-month payment requirement NOTE: Borrowers with delinquent taxes may or may not have a tax lien. Borrowers currently in a repayment plan, and the IRS has not filed a tax lien, are not required to meet the minimum 3-month payment requirement. The payment to the IRS will be included in the DTI calculation.

What are the FHA guidelines for income and debt ratios (also called DTI or Debt-to-Income ratio)?

Maximum debt to income ratio varies based on overall credit history and assets.  Typically, the DTI cannot exceed 45% of the borrower’s gross income.  However, in some cases borrowers with as high as 54.9% DTI may be eligible and in other cases borrowers may be capped at 43% DTI.

What are FHA guidelines for Employment history and loan income requirements?

A 2-year employment and income history is required for both employees and self-employed borrowers by way of pay stubs, tax returns and w2s/1099s.  Borrowers with court ordered alimony and child support must document receipt of the income for a minimum of 3 months and proof that it will continue for at least 3 years.

How does FHA treat deferred Student loans?

Florida FHA loan borrowers with student loans that are in deferment or not fully amortized will be required to calculate 1% of the outstanding balance as minimum monthly payment to be included in their debt to income ratio (DTI) calculation.


Florida FHA Property Questions

What are Florida FHA Loan Eligible property types?

  • Single family residences
  • 2-4 unitsPUDs (attached/detached)
  • Condominiums (FHA approved projects. Approval must be valid at time of case number assignment)
  • Modular/prefabricated properties 1-unit only.
  • Factory built but not built on a permanent chassis; built on-site similar to stick-built homes; permanently affixed to the foundation; must conform to local building codes. Property is legally classified as real property and assumes characteristics of stick-built such as permanent connections to water, electrical and waste disposal systems.
  • Mixed use must conform to residential nature of the neighborhood, and commercial use cannot exceed 25% of the gross living area.

What are FHA ineligible properties in Florida?

  • Non FHA approved condominium projects and/or cooperative projects
  • Manufactured/mobile homes. Manufactured housing is defined as any dwelling built on a permanent chassis. Manufactured homes are ineligible even if the towing hitch, wheels and axles have been removed.
  • Condo Hotels (projects managed or operated as hotel/motel, hotel/motel conversions)
  • Unique properties
  • Farms, orchards, ranches
  • Rural property >10 acres.
  • Commercial property
  • Properties located in lava zones 1 and 2

Can you get a Florida FHA loan for a property acquired at auction?

If the subject property is purchased at auction, the buyer’s premium may be included in the calculation of the final sales price, as long as the amount of the buyer’s premium is reasonable and customary for the area

When it comes to getting a mortgage

you have more options than you think

First Time Home Buyer Florida Program Update

Florida first-time home buyers still have to meet the many criteria for a mortgage that will be securitized in the market and conform to the guidelines set forth by HUD and various regulatory agencies.  Typically, people associate first time home buyer loans with FHA loans. Thus, for the purpose of this first time home buyer update we will focus on providing potential Florida homeowners with qualification requirements pertaining to FHA loans.

Before we go into more detail, here is a simple way to look at how you qualify for a first time home buyer FHA loan:  You either make enough money to qualify for an FHA loan or you don’t.  You either have demonstrated credit worthiness or you haven’t.  It’s as simple as that!

First Time Home Buyer Florida Program FAQs

Here are some basic cost and qualification requirements for a first time home buyer in Florida:

What is the minimum credit score for FHA loans?

Although some Florida mortgage companies will go down to a 580 credit score, most lenders require a minimum of 620 credit score to approve an FHA loan.  Minimum FHA credit scores do not automatically qualify you for an FHA loan.  Most mortgage lenders also like to see 1-3 positive tradelines such as credit cards reported on your credit for a at least 12 months.  FHA does allow for nontraditional trade lines such as electric and cable but varies from lender to lender.

How about bankruptcy or foreclosure?

No bankruptcy in the last 2 years, no foreclosure, Deed in Lieu or Short Sale in the last 3 years from the date of your Florida mortgage loan application.  Simply put, if you have had a bankruptcy, it had to have been discharged over 2 years ago. A foreclosure had to be completed over 3 years ago from the time the deed transferred from your name to another.  Although there are talks about loosening up the foreclosure guidelines, for now you may want to use this timeline to be safe when evaluating your current circumstances.

How much can you afford?

Currently FHA in some cases allows all the way up to 55% debt-to-income ratio for loan income qualification purposes.  What this means is, your total monthly obligation cannot exceed 55% of your gross monthly income.  Preferably no one should want their monthly debt to be more than 41% but unfortunately certain homeowners try to push the envelope because they get emotionally attached to a home.

What’s the minimum down payment for FHA loans?

You need to put a minimum of 3.5% Down payment in excess of any closing costs or pre-paids.  This means, don’t assume that putting $7,000 down on a $200,000 home is all you need to become a first time home buyer.  You do have the option of asking the mortgage lender to give you credit from the rate towards closing costs in exchange for taking a higher rate if you have limited funds over the 3.5% down payment.  Some borrowers do qualify for Down Payment Assistance from government agencies which may also be an option.

Can you get help with closing costs on a FHA loan?

The seller can contribute up to 6% towards your closing costs but that cannot go toward the 3.5% down payment based on the purchase price of your desired home.  You may also search for a broker or a lender that will give you credit to cover all closing costs.  Here at Florida Home Funding, we always provide our first time home buyers with a no closing cost option.

What’s the Maximum FHA loan amount a Florida first time home buyer can get?

The maximum loan limits are set by your mortgage lender based on your income. In addition, the mortgage lender also has to take into account the Florida Maximum County loan limits set by HUD. For current FHA loan limits in Florida, visit  https://entp.hud.gov/idapp/html/hicostlook.cfm

Do you have to pay anything extra on an FHA loan?

All FHA loans have mortgage insurance added to your monthly mortgage payment.  FHA mortgage insurance currently is set to stay on your FHA loan for the life of the loan.  As an alternative, you may want to look at putting 3-5% down on a conventional mortgage, which does not result in lifetime mortgage insurance payments.  Lastly, FHA loans also come with a hefty upfront one-time mortgage insurance premium that is stacked on top of your principal loan amount.  The upfront mortgage insurance is 1.75% of your principal loan amount.

Contact a licensed Florida mortgage broker if you are looking for not only the best FHA loan rates in Florida but also if you would like a professional to sit with you, explain and lay out a successful long or short term strategy (based on HUD guidelines) to help you become a qualified first time home buyer in Florida.

When it comes to getting a mortgage

you have more options than you think

Lowest FHA Rates In Florida

Getting the lowest FHA rates is often a challenging task for first time home buyers.  The biggest mistake first time home buyers make is assuming that the big banks or lenders care about them and will offer them the best deal.  Everyone in the mortgage business is in the business of making money, and I guarantee that they are not trying to save the manatees. It is up to you, as the home buyer, to know some simple facts that can help you save THOUSANDS when shopping for the lowest FHA rates.

FHA Rates Fact #1

The bigger the bank or lender, the higher the cost of acquisition on a loan, and thus, result in higher interest rates to offset costs.

Solution:  Small/well reputable mortgage brokers are able to offer lower rates due to lower overhead and the fact that they are fixed compensated with access to wholesale rates that retail banks or lenders will not offer you.

FHA Rates Fact #2

There is not just one FHA mortgage rate option to choose from.  The rates are based on credit scores, and ultimately how much profit the bank or lender wants to yield from your loan.

Solution: The easiest way to explore your options is by contacting a local mortgage broker that will take the time to present you with the various FHA rates available that best fits your needs/goals.  For instance, you have the ability to choose the lowest FHA mortgage rate with closing costs, or slightly higher rate with no closing costs. Depending on your long term or short term goals, liquid assets and whether the home seller is providing you credit to cover closing costs, can play a big factor in which rate option you choose.

FHA Mortgages aren't "one size fits all". Everyone's situation is different.

Simply tell me your scenario, and I will analyze your situation and provide professional advice that could save you thousands.  No obligation free FHA mortgage analysis.

  • What's your scenario?

    When it comes to getting a mortgage, you've got more options than you think. Everyone's situation is different. Tell me your scenario below, and I'll present you with all your options.


When it comes to getting a mortgage

you have more options than you think

FHA Streamline Refinance Rates, Process and FAQs

Our FHA streamline refinance program is incredibly EASY and could allow you to lower your mortgage rate/payment with the entire process from start to finish taking as little as 14 days.

In addition to our incredibly low FHA rates and fast closings, you have the ability to skip 2 months of mortgage payments.  Doesn't matter how much money you make, not making a mortgage payment for 2 months is like a blessing.  You could use the savings and the option of not making a mortgage payment for 2 months to pay down credit cards debt, make home improvements or whatever you desire. Its your money - its your savings.

What is the FHA streamline process?

The FHA streamline loan is the easiest loan you will ever apply for.  There is NO income and NO appraisal required to refinance your current FHA loan. The only thing we care for is that you have made your mortgage payments on-time for the last 12 months.  It’s that easy!

What are the lowest FHA rates you can get?

It all depends on your short and long term goals.  For instance, you have the ability to lock the lowest FHA rates available with closing costs or with ZERO closing costs. The choice is yours to make once we present you with all the options that could save you thousands.

The #1 mistake homeowners make is not shopping around and thinking that their current mortgage company is the only one that can FHA streamline refinance their loan. This is far from the truth. The fact is any mortgage company can refinance your FHA loan.  The advantage of using a mortgage broker is not only getting wholesale FHA rates that are significantly lower that the banks or a direct lender but most importantly the ability to be presented with multiple FHA streamline scenarios based on your mortgage needs.

FHA Mortgages aren't "one size fits all". Everyone's situation is different.

Simply tell me your scenario, and I will analyze your situation and provide professional advice that could save you thousands.  No obligation free FHA mortgage analysis.

When it comes to getting a mortgage

you have more options than you think

FHA Back to Work Program Home Financing in Florida

HUD has made an effort to increase homeownership opportunities for borrowers that have experienced financial difficulties due to the recent economic downturn. They have expanded their underwriting guidelines to make qualifying for an FHA loan easier. As a result, it is easier for mortgage companies to meet the high demands of borrowers with damaged credit, such as from foreclosure or bankruptcy.

The FHA back to work program is simple: If you truly lost your home or filed for bankruptcy due to unexpected job related financial hardship, then HUD is willing to give you a second chance on home financing in Florida. In simple terms, this expanded guideline helps borrowers that have specifically had a short sale, foreclosure, deeds-in-lieu, or bankruptcy due to financial hardship that has now been overcome. In other words you could not have strategically defaulted on your mortgage due to real estate market meltdown and now expect the government housing authority to assist you in your new home financing needs.

Until recently, FHA financing in Florida typically required a 2 to 4 year waiting period when a borrower had experienced a major derogatory event such as a foreclosure or a bankruptcy.  However, this exception on the standard waiting period to qualify for an FHA loan under the FHA Back to Work Program has been waived only for a borrower that can truly meet the following 3 criteria:

  1. Document a financial hardship that led to their derogatory credit, such as loss in employment or significant drop in borrower/co-borrower income;
  2. Demonstrated re-credit worthiness in the past 12 months via new or reestablished trade lines;
  3. Completed housing counseling from a HUD approved agency.

Here are the two most important factors taken into account when an FHA approved underwriter examines a borrower’s eligibility to purchase a home via FHA financing after an unintended economic event:

  1. The number one most important documentation required is proof that your household income declined by more than 20% for a period of at least 6 months prior to default. HUD defines household income as income of the borrower and co-borrower on the previous mortgage that went into default. For instance, based on the recent HUD mortgagee letter, if the spouse was not on the mortgage then their income is not required to be documented.
  2. The second most important factor in determining eligibility is re-establishment of good on-time credit for at least 12 months after the economic event.  For instance, if you had a bankruptcy, you must have at least 3 new trade lines (i.e. credit cards or installment loans) established with satisfactory payment history.

When it comes to getting a mortgage

you have more options than you think

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    Content provided by The information provided on this site is for basic informational purposes only and IS NOT intended as a substitute for professional or legal advice. Notice: My Town Realty (License #: CQ1049127) and Florida Home Funding (NMLS ID: 870878) are both wholly-owned entities of Shahram Sondi (NMLS ID: 186790, License #: BK3225742). Due to this relationship, any referral between these two entities has the potential to financially benefit Shahram Sondi. Under no circumstance are you required to engage the services of one or both of these entities.