Comprehensive Guide to FHA Loan Requirements in Florida

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Date Posted:

April 3, 2025

What Is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration, a government agency established in 1934 to increase homeownership opportunities. By guaranteeing these loans, the FHA reduces the risk for lenders, allowing them to offer favorable terms to borrowers who might not qualify for conventional mortgages.

The Federal Housing Administration offers several types of FHA loans, each with its own set of requirements and benefits. Here are some of the most common types of FHA loans:

203(b) loan: This is the most common type of FHA loan, which allows for a down payment as low as 3.5%.
203(k) loan: This loan is designed for homebuyers who want to purchase a fixer-upper property. The loan combines the mortgage and renovation costs into one loan.
203(h) loan: This loan is for homebuyers who have experienced a natural disaster and need to rebuild or repair their home.
Streamline FHA loan: This loan is designed for existing FHA borrowers who want to refinance their loan to take advantage of lower interest rates.

FHA loans are a popular choice for homebuyers in Florida due to their lenient credit score requirements and lower down payment options. However, they have some costs that differ from traditional mortgage loans, which we’ll discuss.

FHA Loan Limits in Florida

Florida FHA loan limits vary by county and are based on the median home prices in the area. For 2025, the limits in Florida range from $420,680 in lower-cost areas to $970,800 in higher-cost regions. Your mortgage professional from Associates Home Loan can help you check the specific loan limit for the county where you intend to purchase a home during the application process.

Benefits of FHA Loans

An FHA loan is a beautiful mortgage product that can help you get into the house you always dreamed of calling home! FHA loans offer:

Lower Down Payments

Qualified borrowers can secure a home with as little as a 3.5% down payment.

Flexible Credit Requirements

FHA loans accommodate individuals with lower credit scores, starting at 500.

Competitive Interest Rates

Due to the government-backed nature of these loans, interest rates are often competitive.

Assumable Loans

FHA loans can be transferred to a new buyer, which can be advantageous if you decide to sell your home.

Florida FHA Loans

Offer additional benefits such as down payment assistance programs specific to the state.

Key FHA Loan Requirements in Florida

To take advantage of a Florida FHA loan, you’ll need to meet specific Florida FHA loan requirements.

1. Credit Score

While the FHA sets these credit score minimums, individual lenders may have higher requirements:

Minimum Credit Score of 580: Qualifies you for a 3.5% down payment.
Credit Scores Between 500-579: Require a 10% down payment.

2. Down Payment

Down payments can come from personal savings, gifts from family members, or approved down payment assistance programs.

3.5% Down Payment: Available for borrowers with a credit score of 580 or higher.
10% Down Payment: Necessary for those with credit scores between 500 and 579.

3. Debt-to-Income Ratio (DTI)

Generally, your monthly debt payments should not exceed 43% of your gross monthly income.

Some lenders may allow a higher DTI ratio, up to 50%, if you have compensating factors such as significant cash reserves or a substantial down payment.

4. Steady Employment and Income Verification

You’ll need proof of consistent employment for at least two years in the same field, verifiable with W-2 forms, pay stubs, and tax returns to verify income.

5. Property Requirements

Approved property types include single-family homes, approved condominiums, and manufactured homes meeting specific standards. The property must be your primary place of residence (in other words, where you live full-time).

The property must undergo an appraisal by an FHA-approved appraiser to ensure it meets minimum property standards and is worth the purchase price.

6. Mortgage Insurance Premium (MIP)

FHA loans come with competitive interest rates, which can help keep your monthly mortgage payments low. However, FHA loans also require mortgage insurance, which can increase your monthly payments. The mortgage insurance premium (MIP) is a fee paid to the Federal Housing Administration to insure the loan.

FHA loans require two types of mortgage insurance premiums (MIPs), which protect the mortgage lender in case of borrower default:

Upfront MIP: Typically 1.75% of the loan amount, payable at closing or rolled into the loan.
Annual MIP: Also known as the annual mortgage insurance premium, ranges from 0.45% to 1.05% of the loan amount, divided into monthly payments. This premium is calculated based on loan parameters and has specific duration requirements depending on the down payment made.

Understanding these costs can help you budget effectively and ensure that an FHA loan is the right choice for your financial situation.

Apply for an FHA Loan in Florida Today at Associates Home Loan!

At Associates Home Loan, we’re committed to helping Floridians achieve their homeownership dreams. Our team of experts will guide you through every step, ensuring you understand your various loan options and secure the best terms possible.

Ready to take the next step? We’d love to help you in your home-buying journey. Our team at Associates Home Loan has experience helping borrowers who may not always “fit inside the box” when it comes to financial situations–and we have a loan product for you! Find out what you qualify for—apply now!