FHA home loans have continued to gain popularity for new home buyers across Florida. Many homebuyers around Titusville, New Smyrna Beach and Cocoa Beach want financing options that offer min down payment like the FHA program.
In addition to the low 3.5% down payment requirement, FHA recently announced the monthly mortgage insurance is going down. It’s not often we hear about a cost going down….this will now allow home buyers to qualify for more.
Add to this only a 3.5% down payment, easy credit qualifying requirements and backing by the federal government – FHA mortgages are an attractive option to many borrowers in Volusia and Brevard County.
Jack Chambers, an FHA loan specialist, says that FHA loans will always fill a need in the Florida housing market, whether their costs rise or fall. Most buyers, especially first-time buyers, can qualify for a conventional loan. How many first-time buyers have 10% or 20% for a down payment?
Here are the advantages of the FHA mortgage for home buyers in Titusville:
Lower credit score and down payment requirements
The FHA requirements for credit scores and down payments are far lower than for conventional loans. Borrowers can technically qualify for an FHA loan with credit scores of at least 580 credit score and a down payment of just 3.5 percent. However, while an FHA-backed mortgage with FICO 580 is “available” to borrowers, many lenders add ‘overlays’ on these minimum requirements.
Loans with the lowest credit scores tend to default at a much higher rate, and lenders are afraid that if they issue too many loans that later fail, HUD will no longer allow them to write FHA-backed mortgages. Therefore, many borrowers must have credit scores of at least 620 to qualify for the maximum 96.5% financing.
FHA home mortgage rates
FHA loan rates are typically the lowest 30-year fixed rates available and lower than conforming loans. FHA Borrowers with credit scores of 680+ will often qualify for the same interest rate as would conventional borrowers with a score of 740 + would.
FHA Loan Limits
The 2025 loan limit is $524,225 for a 1-unit property in most locations in Fla. Buyers can read all the current FHA loan amount limits for Florida here.
FHA Closing costs
FHA loans allow sellers to pay up to 6% of the loan amount to cover buyers’ closing costs. In conventional loans, sellers can only pay up to 3 percent in most cases. So this allows the FHA home buyer to put less money into the transaction. In some cases, a borrower can just pay the down payment, and have the seller pay all closing costs. Most first-time buyers around Titusville can save enough money for a down payment, but then they have nothing else. So allowing the home seller to pay the tab on closing costs is a big help for many.
FHA mortgage insurance premiums
The biggest downside of FHA loans has long been the costs associated with the upfront and annual mortgage insurance premiums. The upfront mortgage insurance premium is 1.75 percent of the loan amount. That’s $1,750 on a $100,000 mortgage. That government cost is added to the principal balance of your loan. So your loan amount is actually $101,750.
FHA reduced the annual mortgage insurance premium on 30-year fixed-rate FHA loans from 0.85% to 0.55% of the loan balance. Read more on the FHA mortgage insurance reduction here. Just so folks aren’t confused, the annual mortgage insurance is actually the monthly insurance (PMI) that is added to each payment. This is different from the one-time 1.75% funding fee or MIP. The new mortgage insurance reduction is a really big saving.
FHA monthly mortgage insurance for the life of the loan
With conventional mortgage loans, borrowers don’t have to pay for private mortgage insurance (PMI) if they come up with a 20% down payment. Conventional loan borrowers can even request that private mortgage insurance be dropped/canceled once their mortgage balance falls below 80% loan to value of their home. However, with FHA loans, borrowers who closed their loans after June 3, 2013 must make mortgage insurance payments every year for the life of the loan, no matter how much equity they accrue over time.
This is the only real negative of the FHA program. However, if a great credit score and a large down payment aren’t possible, an FHA loan might be your only option. We find many borrowers just refinance into a conventional loan later down the road ( assuming they plan to stay in the house for the years to come)
FHA Mortgage Source is Florida’s local FHA leader. Serving all of Volusia and Brevard County 7 days a week – contact us today with any questions or to get pre-qualified. Please contact us by calling 800-743-7556, or just submit the quick Info Request Form on this page.
Applicants in more rural locations of Volusia and Brevard please also check into the 100% USDA Rural Housing loan here.
Serving – Cape Canaveral, Cocoa Beach, Grant, Indialantic, Indian Harbor Beach, Malabar, Merritt Island, Palm Bay, Rockledge, Satellite Beach, Titusville, Daytona Beach, DeBary, DeLand, Deltona, Edgewater, Holly Hill, Lake Helen, New Smyrna Beach, Oak Hill, Orange City, Ormond Beach, Pierson, Ponce Inlet, Port Orange. Titusville FHA Loan Lender