FHA Loan Florida

FHA Low money down Home Loans in Florida

FHA Home Loan Florida

The Federal Housing Administration (FHA) was formed not only to protect lenders from borrowers who default on their mortgages but to improve the US housing market. By insuring FHA approved lenders, the FHA makes it possible for home buyers to purchase homes under an FHA home loan that provides  great rates with low down payment and more flexible credit score requirements. The FHA loan program for Florida and around the US has allowed the FHA to become the largest insurer of mortgages in the world, having insured over 35 million mortgages since they were first created in 1934.

 CambridgeHomeLoan.com can help you secure the best rates and terms for and FHA loan in Florida. There are many different FHA loan programs available to meet the wide range of borrower needs including a purchase of a new home, the refinancing of you current home loan, the financing of renovation and rehabilitation projects, and reverse mortgages. In addition there are First Time Home Buyer Programs, programs for seniors and to refinance your current loan to save on your monthly payment. 

FHA Loan in Florida

The FHA provides insurance to FHA approved lenders that allow them to provide much more leverage than would be otherwise possible. The FHA loan in Florida requires only a 3.5% down payment in 2020. The down payment is allowed to be a gift from an acceptable source as allowed by the FHA.

FHA Loans in Florida range from $331,760 for 1 living-unit homes to $638,100 for four living-units. Conventional Loan Limits in Florida are $510,400 for 1 living-unit homes to $981,700 for 4 living-units.  Jumbo loans over $1 million and Super Jumbo loans up to $3 million dollars have their own programs for Florida luxury buyers.  These loan limits can change for high cost areas so be sure to ask your CambridgeHomeLoan.com FHA loan specialist for current guidelines. 

FHA Loan Program

FHA guidelines for Employment history and loan income requirements?

A two-year employment and income history is required for both employees and self-employed borrowers by way of pay stubs, tax returns and W2s or 1099s.

Borrowers with court ordered alimony and child support must document receipt of the income for a minimum of three (3) months and proof that it will continue for at least three (3) years.

FHA Loan Income Requirement

FHA guidelines for Employment history and loan income requirements?

A two-year employment and income history is required for both employees and self-employed borrowers by way of pay stubs, tax returns and W2s or 1099s.

Borrowers with court ordered alimony and child support must document receipt of the income for a minimum of three (3) months and proof that it will continue for at least three (3) years. FHA Loans are one of the most popular loans in Orlando and around the country today due to the low credit requirement and downpayment necessary to purchase a home.

FHA Loan Credit Requirement

What is the minimum credit score required for FHA loans and first time home buyers?

A mortgage or Bank FICO with middle credit score of at least 620. Depending on overall credit, sometimes borrowers are able to qualify with middle scores or FICO 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 what your credit scores is, FHA still evaluates overall credit history to determine if borrower gets approved eligible findings that meet FHA approval guidelines.  It is also important to note that your consumer FICO is not the same as your mortgage FICO or Bank score. Banks use a different calculation and you should contact your loan officer to understand the difference between the consumer and bank scores.

FHA Loan Maximum Seller Credit Allowed

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

Seller Credit and other third party contributions are limited to a max of 6% of the sales price. For VA Loans the maximum seller contribution is 4%. It always pays to try to get the maximum seller contribution that you can .

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

A Bankruptcy does not automatically disqualify a borrower from receiving an FHA loan.  If your bankrupcy was discharged 2 years ago you may be eligible today for an FHA loan program. If you bankruptcy was discharged less than two years ago and you have extenuating circumstances you might still be eligible to qualify.  You can find out more by applying here!.   Same rule applies for borrower with chapter 13 bankruptcy.

A chapter 13 has some different requirements as a chapter 13 bankruptcy may still qualify if the  lender is willing to do a manual underwriting and the borrower has a satisfactory history of payments under their Ch 13 plan. 

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

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

How does FHA treat the collection accounts on my credit report?

For 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 debt-to-income ratio (DTI), provide proof of a payment plan. If neither are an option, the lender must use 5% of the outstanding balance and include it in the borrower’s DTI calculation.

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.

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:

  1. The borrower must have made a minimum of 3 months of scheduled payments and documentation of the payments is required.
  2. The payment must be included in the DTI / Debt to income calculation.
  3. 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 loan guidelines for borrower with previous foreclosure and deed-in-lieu?

Foreclosure waiting period is measured from the date of title transfer. Three (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 11/12/14, FHA claim dates was 7/12/15, the 3-year waiting period ends 7/13/18).

Borrowers with foreclosure/Deed in Lieu 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 Bankruptcy  independently, not as a single event.

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

The three-year waiting period from date of title transfer still applies unless they were current at the time on short sale. Speak to your loan officer for specifics. 

What are the FHA guidelines for DTI or Debt-to-Income ratio?

The Maximum debt-to-income (DTI) 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. Due to our volume size we can allow for higher DTI which enables you to receive a higher loan amount even if you have significant debt. 

How does FHA treat deferred student loans?

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 that will be added in their debt-to-income ratio (DTI) calculation.

 

FHA Property Requirements For Florida and Nationwide

 

What are FHA Loan property types?

  • Single-family Homes
  • Two to Four planned unit development (PUDs)
  • Condos
  • Modular or pre-fabricated properties (single-unit only)
  • Mixed use must conform to residential nature of the neighborhood, and commercial use cannot exceed 25% of the gross living area.

Florida HomeReady Mortgage
Low down payment HomeReady® Home Loan

HomeReady Mortgage confidently serves today’s low-income credit worthy home borrowers.

The HomeReady® loan is a low down payment home loan program that for offer 3% down. Credit scores however are higher than FHA loan with starting requirements for a FICO at 620  vs 580. This may be offset by the lower capital contribution required of 3% vs 3.5% .  Cash for a down payment can come from multiple sources including grants, gifts and community seconds with no minimum requirement to use your personal funds.  The program is great for developer built new home loans.

The HomeReady® home loan mortgage program requires you to take a quick course about home ownership. You can check  the education requirements for this program HERE

Florida Hard Money Loans

EXPERT FIRST TIME HOME BUYER GUIDE Florida