If you’re looking to buy a home or refinance but struggling to secure financing, an FHA loan in Florida may be the solution you’ve been searching for.
Backed by the Federal Housing Administration (FHA), these loans offer flexible eligibility requirements, lower down payments, and competitive interest rates. An FHA loan in Florida comes with a set of perks, such as a low credit score requirements and flexible qualification criteria.
FHA loans allow credit scores down to 500. If you’re purchasing a home in Florida with a credit score of 500-579, 10% down payment is required. If the credit score is 580 or higher, only 3.5% down payment is required.
If you’re looking to refinance your home and pull some cash out, the minimum credit score required is 500.
How Does It Work?
An FHA loan in Florida allows potential homeowners to purchase a home with a credit score as low as 500. With credit scores 579 and below, 10% down payment will be required. 3.5% down payment is required if the credit scores are above 580.
Gift funds are acceptable to be used towards the down payment and the closing costs. Down payment assistance is also available for credit score 620 or higher.
FHA allows current homeowners to refinance their current mortgage and access the equity in the home. To qualify for a cash out refinance, the credit score must be above 500, the mortgage must be paid on time for the past 12 months and there must be at least 20% equity in the home after the cash out.
FHA Loan in Florida Requirements
- Minimum Credit Score: FHA loans often accept lower credit scores than conventional loans. However, a higher credit score may result in better terms.
- Down Payment: FHA loans typically require a lower down payment, 3.5% of the home’s purchase price.
- Debt-to-Income Ratio: Income documents will be required to determine if your income qualifies for the loan. Paystubs, W2s and/or tax returns will be needed.
Eligible Properties:
- 1-4 Units
- Manufactured and Mobile Homes
- Condos
- PUDs
- Townhouses
Benefits of an FHA Loan in Florida
- Interest Rates: FHA loans have lower interest rates than conventional loans resulting in a lower monthly payment.
- Closing: Closing on an FHA loan can occur in less than 3 weeks.
- Credit: FHA is more lenient when it comes to the credit profile. Late payments on revolving and installment account are acceptable.
If you have less than perfect credit, you may be able to qualify for an FHA purchase or cash out refinance in Florida. Most lenders require a 620 or 640 to qualify for an FHA loan. At Mortgage-World.com, we’re able to help borrowers with credit scores as low as 500.
