Sample ImageFHA loans are among the more popular types of loans in the market, with close to 1 out of 5 homebuyers in America choosing the loan to finance their home. If you are thinking about applying for an FHA loan for your Florida home purchase, let’s look at how they work, the benefits of picking this type of loan, and how you can qualify for an FHA loan in Florida.

How Do FHA Loans Work?

An FHA loan is a government-backed loan guaranteed by the Federal Housing Administration. They are designed to help homebuyers with minimal downpayment and lower credit scores but have the income to keep up with the mortgage payments. 

While the FHA backs your loan, you don’t apply with them but through an FHA-approved mortgage lender.

Benefits of Choosing an FHA Loan in Florida Versus Other Loan Types

Easier loan requirements

Compared to other loans, FHA loans allow home buyers to own a home even if their finances aren’t perfect. They have more lax requirements regarding credit scores, DTI, and down payments.

No income limits

You can qualify for an FHA loan no matter your income level. Conventional mortgages from Freddie Mac and Fannie Mae, on the other hand, offer loans with as little as 3% down but have income requirements that disqualify some. 

No PMI

You don’t have to pay PMI with an FHA loan compared to the required PMI payments with conventional mortgages if you pay less than a 20% down payment.

If you want to know if an FHA loan is the best option for you, check out our FHA loan with Element Funding Treasure Coast.

How Can I Qualify For An FHA Loan in Florida?

To qualify for an FHA loan, you must meet the following criteria:

  • For credits scores of 580 and up, you’ll need a 3.5% down payment. If your score is between 500 to 579, expect to pay 10% down.

  • DTI should be 43% or lower.

  • FHA loans can be used for single-family homes or multi-family units that house up to 4 families. You can also purchase a condo with your loan.

  • Note that there are borrowing limits based on the location and type of property you plan to purchase.

  • Employment history for the last two years that can be verified.

  • You can buy a fixer-upper with your FHA loan but not one with major structural or safety issues. Your loan application may get denied if your prospective home has roof damage or is located near a hazardous waste area.

  • After bankruptcy, you need to wait from 1 to 2 years before applying. In the case of a foreclosure, a 3-year waiting period is required.

For the most accurate information based on your situation, please contact us at Element Funding Treasure Coast.

Ready to apply for an FHA loan?

Are you planning to buy a home, but you’re worried about your poor credit scores and don’t have enough money saved for a down payment? No need to worry, a Florida FHA home loan by Element Funding Treasure Coast is a great option.

Get in touch with one of our professional loan officers, and we’ll help you with your mortgage application.

Give us a call or send us a message on our website today!