FHA’s mission-driven organization encourages home ownership and provides affordable Florida home loan options with low down payments and flexible credit requirements down to 550 FICO scores.

Since 1934, FHA has insured millions of home mortgages in Florida and throughout the US and is a great tool for first-time home buyers to get into a home with little out of pocket with low down payment options and flexible guidelines that allow a seller to contribute up to 6% of the purchase price towards a buyers closing cost practically eliminating any closing cost to the buyer. In 2009, FHA programs insured nearly 2 million loans, which included 750,000 first-time home buyers.

The Federal Housing Administration (FHA) was created in 1934 out of the National Housing Act and was established to increase homeownership by ensuring available loan programs with government-backed loan programs. Additionally, it’s purpose was to increase housing construction and reduce unemployment rates at the time.

FHA loans have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. The program originated during the Great Depression of the 1930s when the rates of foreclosures and defaults rose sharply, and the program was intended to provide lenders with sufficient insurance.

Some FHA programs were subsidized by the government, but the goal was to make it self-supporting, based on insurance premiums paid by borrowers.

While most people believe that the FHA lends money directly to consumers, the government entity actually only offers the insurance for their offered loans that are financed by traditional banks and mortgage lenders.

Four of the most visible single family housing programs that FHA offers are, Section 203(b), Section 234(c), Section 203(k), Home Equity Conversion Mortgages (HECM) – Reverse Mortgages, and the latest Section 203(h) program that offers assistance to consumers affected by FEMA declared disaster areas.

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FHA Loan Type Highlights:

Section 203(b)

  • largest of FHA’s single family programs
  • 1-4 unit properties are eligible
  • flexible credit requirements – FICO Scores as low as 550 accepted
  • 3.5% down payment allowed
  • down payment may be a gift from specific sources

Section 234(c)

  • provides mortgage insurance for individual condominium units
  • credit, down payment and limits of 203(b) apply
  • in 2010, condominium complexes must be approved through HRAP/DELRAP to be eligible for FHA insurance

Section 203(k)

  • primary program for property rehabilitation
  • encourages community and neighborhood revitalization
  • only 1 mortgage loan is used for both the acquisition and the renovation
  • 1-4 unit properties including condominiums are eligible; check with your lender for manufactured housing eligibility
  • required improvements include cost-effective energy conservation standards and smoke detectors
  • available in both a full 203(k) and streamline 203(k) – Streamline offers a quicker and easier process but only up to $35,000 in renovations

Florida FHA programs go beyond the scope of the previously listed programs. They offer a Streamline Refinance as well as additional options when buyer HUD-owned properties. Also, recent legislation has helped FHA offer special programs with incentives to lenders for modifying and refinancing existing mortgages like with the “Making Home Affordable Program.”

When looking for a loan program in Florida to fit your specific needs, take a close look at FHA as their programs have become more attractive to both lenders and consumers.

With favorable loan terms, higher loan limits, 30-year fixed repayment terms, and flexible down payment options, FHA will continue to encourage home ownership in Florida and in the US, provide liquidity and stability to the mortgage market.

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Frequently Asked FHA Questions:

Q. What are the credit requirements for most FHA lenders?

As of 2010, the majority of lenders are leaning toward a mid credit score of 640.

Q. How much can I afford?

By providing your mortgage professional the required documentation, a detailed analysis will be provided that includes your maximum loan amount

Q. How will I know if the condo/townhome I wan to buy is eligible for FHA financing?

The following link will allow you to enter your zip code for a list of eligible properties:  CLICK HERE