Fortunately, buying a home in Flagler County is now within financial reach, and the process is smoother. There are several federal, state, and community homebuyer programs for first-time buyers, including the Florida Housing Finance Corp. and the Federal Housing Administration (FHA).
The FHA offers resources ranging from affordable mortgage programs to financial advice and helps with closing costs and down payments.
Are you a Hometown Hero? Find out your eligibility for the Hometown Heroes Loan Program in Flagler County, Florida.
What is the FHA?
The Federal Housing Administration (FHA) is one of the largest federal agencies in the United States. They offer affordable mortgage programs to assist struggling borrowers with low and moderate incomes.
The Federal Housing Administration (FHA) offers a mortgage program to help first-time homebuyers, low-income buyers, and buyers with poor credit histories purchase a home. The program is insured by the FHA, which means that if the buyer defaults on the loan, the FHA will pay the lender.
Purchasing a home is a big decision, especially if you're a first-time homebuyer. If you're looking to purchase a home in Flagler County, you may be eligible for an FHA loan up to a maximum limit of $420,680. These government-backed loans allow buyers to purchase a home with a down payment as low as 3.5%.
Some benefits of the FHA loan include:
Lower credit score requirements
Closing costs will be rolled into the loan by the FHA
If you have historical financial issues such as bankruptcy, you can still qualify for an FHA grant
- Lower down payments are acceptable
FHA Loan Features
An FHA loan can be an excellent option for first-time homebuyers who do not have enough funds for a down payment on a conventional loan. An FHA loan allows borrowers to purchase a home with as little as 3.5% down. This is great for those who do not have sufficient cash to buy a house.
The FHA loan also allows you to include the closing costs in your loan. The closing costs are payable at the time of closing, and they can be paid through the mortgage fee or by using a credit line or cash out of your funds.
You must fill out a loan application to qualify for an FHA loan. After that, your financial information will be reviewed by the FHA. If the FHA approves you, they will take over your loan and manage it.
FHA Loan Requirements
To purchase a home with an FHA loan, the following requirements are needed:
A minimum down payment of 3.5% is needed to obtain an FHA loan and is linked to your credit score. The acceptable credit score range is between 500 and 579, meaning the minimum credit score needed to qualify for the FHA loan is 500. If your credit score is below 580, you will have to make a down payment of 10% on the home you wish to purchase.
A mortgage calculator can help you estimate your monthly mortgage payment after purchasing a home. The mortgage calculator helps you determine your mortgage payment based on various factors such as your down payment amount and the interest rate.
You can also look for a Flagler County, Florida mortgage broker for more information about interest rates, payments, and other details of an FHA loan.
FHA Mortgage Insurance
As a typical loan, you must pay mortgage insurance, which protects the lender if you default on your payment.
Secure a mortgage loan requires payment of mortgage insurance. It is a fee that is paid to the FHA and covers the insurance of your loan. This fee is usually prorated annually, and payments are due on the anniversary date of your loan.
You will need a good credit score and a low payment to qualify for an FHA loan. You need to pay monthly mortgage insurance on the loan you are applying for with your lender. The mortgage insurance premium is 1.75% of the base loan amount. It is payable upfront and is due at closing.
Credit Score Requirements
Your FHA loan application needs a minimum credit score of 580 to be eligible for an FHA loan. The down payment amount required varies depending on your FICO score. Still, in general, you need a minimum credit score of 500 to receive a low down payment ranging between 3.5%-10%, as well as an excellent underwriting history.
Here are some factors that determine your credit score:
- How you utilize your credit
- Type of credit (loans, credit cards, etc.)
- The amount you owe
- When you pay your bills
- The amount of recent credit you've taken
If your credit score is high, you will qualify for a higher debt-to-income ratio or a lower down payment. The maximum debt-to-income ratio is standardized at 43%, but a 50% debt-to-income ratio can sometimes be.
For FHA loans, there is no minimum or maximum income requirements. All applicants applying for an FHA loan must have a stable job and income and be able to repay the loan.
If your salary is below the median level, you may still be eligible for an FHA loan, but you will need to compensate for it with non-repayable funds and savings.
Additionally, you must have a verifiable income, as you may be required to share W-2s, pay stubs, bank statements, federal tax returns with your lender, and other verification.
Types of FHA Home Loans
Different types of FHA loans determine the kind of home you can purchase with an FHA loan. This also limits how you are going to spend the borrowed money.
You can choose from a wide range of FHA loan types, but one of the most popular types is the single-family home purchase loan. Here are the classifications of different FHA loans:
FHA 203(k) Loan
This type of loan is ideal for buyers looking to buy a fixer-upper. It allows you to purchase a home with cash and repair the property.
The FHA 203(k) loan is also known as the Renovation mortgage. The borrower can use the funds from their pocket or financial resources to fix up the home and make it livable again without the additional cost of paying for property appraisals, inspections, closing fees, or other fees that you usually have.
There are several other benefits offered with the 203(k) loan, such as:
The first use of funds is at closing
Lower interest rates compared to FHA loans that require a pre-qualification or private mortgage insurance
Low down payment options and cash available
Renovation funds from savings, bank accounts, and private borrowing
- Higher loan amounts compared to conventional loans available through a real estate agent or banker that require a minimum down payment
The FHA 203(k) loan is for people purchasing their first home or those who wish to purchase a fixer-upper. You must have good credit and a stable income to qualify for this loan.
A cash-out refinance involves using the equity in your home to pay off credit card debt, student loans, or other types of debts. If you consider refinancing your home, a cash-out will be perfect.
With a cash-out refinance, you can receive up to 100% of the appraised value of your home minus the cost of repairs and improvements. This is known as the equity that is available in your home.
Cash-out refinance loans let you pay off your debts by using the equity in your home. This is because the loan is secured by your property and your home as collateral.
The FHA Streamline loan allows you to use the Home Equity Line of Credit (HELOC) in addition to other sources of funds to cover the closing costs of your FHA refinance or purchase.
With a Streamline loan, you can take out a line of credit to pay for big-ticket items such as a new car, home renovation, vacation, or furniture. Your real estate secures the Home Equity Line of Credit (HELOC).
FHA cash-out refinance your home. This loan allows you to pay off your credit card debts, student loans, or other types of debts. If you refinance your home, this is the best type of loan for you.
FHA Term Refinances
If you are planning to refinance your FHA loan, then a term refinance is the best option for you. This type of loan involves increasing your original FHA mortgage amount by a fixed percentage to pay off your credit card debt, student loans, and other types of debts.
The term refinance an interest rate that will last for a fixed period. The index plus margin determines the interest rate and is not adjustable.
FHA Vs. Conventional Loans
Using an FHA loan to purchase a home or refinance your current mortgage has many benefits. The FHA loan is an excellent solution for first-time homebuyers who can't afford a substantial down payment or those who are self-employed and have less than stellar credit.
The FHA loan may allow you to purchase a higher-priced home than you would otherwise. As long as the money comes from an approved source, your credit score can be much lower than the required minimum of 580.
With a conventional loan, you will have to pay for a pre-determined mortgage insurance premium of 0.58% to 1.86% of the loan amount per year. Your credit score and income are used to determine the amount that you will have to pay. The premium can increase with each additional mortgage insurance if your FICO score falls below 660.
How an FHA Loan can Help you Benefit from the Perks of Living in Flagler County, Florida
Flagler County is one of the best places in Florida to call home. Aside from the lush vegetation, the county is home to some of the most beautiful beaches in Florida. In addition, the county offers a wide variety of activities and attractions for residents and visitors alike.
The oceanfront lifestyle, abundant outdoor activities, and relaxed atmosphere make this much sought-after destination a favorite for families and retirees looking to escape the hustle and bustle of city living.
Here are some of the things you can enjoy while living in Flagler County:
Marine Land Dolphin Adventure
The Marine Land Dolphin Adventure is located in East St. Augustine Beach and offers guests a unique opportunity to swim with dolphins. This park is home to dolphins, whales, and other marine wildlife that are typically hard to find in Florida.
This park also hosts dolphin swims, sea turtle conservation programs, nighttime stargazing expeditions, family-friendly events for kids of all ages, and much more!
Bulow Plantation Ruins Historic State Park
This historic plantation is just a short drive outside St. Augustine's city. The Bulow Plantation Ruins Historic State Park offers a casual and relaxed environment for families and history lovers, as well as tours through the ruins of the plantation's church and houses.
The park also features walking trails, picnic tables, camping sites, a picnic pavilion with restrooms, and plenty of opportunities for relaxation and family fun!
Flagler Beachfront Winery
A wine enthusiast's dream come true, Flagler Beachfront Winery offers visitors the chance to enjoy some of the finest wines in Florida.
Located in Flagler Beach, this Winery offers an outdoor patio, a large lawn for alfresco dining, and a scenic view of the ocean. The Winery has several local wines, including sparkling wines, reds, and whites.
The outside patio is designed to be covered with awnings during bad weather so you can enjoy your wine and the view. The Flagler Beachfront Winery offers unique tours, tastings, and workshops on winemaking.
Hammock Dunes Club and Links Golf Course
Families will enjoy the Hammock Dunes Club and Links Golf Course outside Palatka. The Hammock Dunes Club and Links Golf Course offer a beautiful setting for families who love golf and casual visitors looking for a day of fun in the sun!
This park features a 23-hole championship course, a putting green, greens fees, tennis courts, a picnic pavilion, a pro shop, and much more.
Florida Agricultural Museum
The Florida Agricultural Museum offers you a chance to travel back in time to experience the sights and smells of Florida's past.
This museum features a pioneer homestead, springhouse, smokehouse, corn crib, chicken coop, blacksmith shop, wagon shed, 19th-century barns, a replica schoolhouse from around 1925-1945, and other early Florida living buildings. This museum also features an assortment of antique tractors and farm equipment!
Gamble Rogers Memorial State Recreation Area
This beautiful Memorial State Recreation occupies a 144-acre park between Intra-Coastal Waterway and the Atlantic Ocean. It offers visitors and locals a chance to relax in the sun and enjoy spectacular ocean views while strolling along the beaches and enjoying other outdoor activities such as fishing, hiking, and swimming.
The park offers 9 different nature trails ranging from easy to challenging, including a 1.2-mile interpretive trail where you can learn about Florida's wildlife and plants! The park also features a small lake for fishing, picnic tables, grills, restrooms, and a playground for the kids!
Get Your FHA Loan Today and Experience Great Living in Flagler County, Florida!
As affordable as Flagler County is, real estate prices have increased considerably in recent years. This means that even if you're earning enough to qualify for a mortgage loan, you may be paying more than you expected. Fortunately, the FHA Loan Program can help you enjoy all the benefits of living in Flagler County while keeping cash on hand to weather even the most severe financial crisis.
If you want to live in Flagler County, get your FHA loan. The FHA Loan Program offers a simple and affordable way to enjoy the same excellent living conditions as the rest of Florida's residents.
Find an FHA-approved lender today who can help you process an FHA Loan. They have dedicated in-house portfolio managers who are well versed in the ins and outs of FHA home loans. You will be guided through every step of finding your dream home.