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FHA Loan in Hardee County, Florida: Learn About the Low Down Payment Options

While homeownership has long been viewed as a part of the American dream, this dream has been getting relatively harder to achieve in recent years. With the rising cost of rent in most metropolitan areas, such as Hardee County, America's largest generation is currently facing unique barriers to homeownership that are pretty challenging to overcome.

Luckily, homebuyers in Hardee County, Florida have alternatives that make the dream of purchasing a home more practical. The US Federal Housing Administration (FHA) has mortgage loans that are much easier to qualify for, even with lower income or credit scores.

This guide will talk about what an FHA loan is and go beyond all it takes to qualify. We'll also give you everything you need to decide whether FHA loans are suitable lending alternatives for you.

What Is an FHA Loan?

FHA loans are government-backed mortgages safeguarded by the Federal Housing Administration. They require lower down payments and minimum credit scores than conventional loans, making them particularly attractive for first-time homebuyers.

In fact, according to FHA's Annual Report, more than 83% of all FHA loan originations in 2020 were for borrowers buying their first homes.

Although the government insures these loans, they're underwritten and offered by third-party mortgage lenders.

How FHA Loans Work

FHA loans come in 15 and 30-year terms with fixed rates. The agency's flexible standards are designed to help individuals who might not be eligible for private mortgages a chance to realize their homeownership dreams.

But there's a catch - you must pay FHA mortgage insurance. This cover protects lenders from a loss if you default on your loan.

Mortgage insurance is usually a requirement on most loans when a borrower puts down less than 20%. If you want to take an FHA loan, you'll have to pay two mortgage insurance premiums:

  • Annual mortgage insurance premiums 0.45% to 1.05%, depending on the loan term, the initial loan-to-value ratio (LTV), and the loan amount. This amount is divided by 12, and payments are made monthly.

  • Upfront mortgage insurance premiums usually amount to 1.75% of the base loan amount, paid when you get the loan.

So, if you borrow $150,000, your annual mortgage insurance premiums would range from $675 ($56.25 monthly) to $1,575 ($131.25 monthly), depending on the term.

After 11 years, your FHA insurance premiums will be canceled if you financed 90% or less of your property's value. In simple terms, this may only happen if you put at least 10% down and stay current with your monthly payments. Note that mortgages with an initial loan-to-value ratio greater than 90% will carry insurance until the loan is fully repaid.

FHA Loan Requirements

There are specific requirements you must meet to qualify for FHA loans. This include:

  • An FHA- approved appraiser must appraise your property

  • The home should be your primary residence, which means you can't use FHA loans to buy investment properties or second homes

  • You must occupy the house within 60 days of the closing

  • A professional home inspection must occur, and it must report whether your home meets minimum property standards

Aside from the conditions mentioned above, you must meet a few more requirements to qualify for a loan. They include a down payment amount, loan limits, credit score, and income requirements. Mostly, these requirements are the same for DACA recipients.

Let's take a look at these factors in great detail below.

3.5% Down Payment

A down payment is a percentage of a buying price of a house and is the upfront amount buyers put down for that house. The minimum amount you can make on FHA loans is directly linked to your FICO score. Also known as credit score, this is a numerical expression ranging from 300 to 850 that depicts your creditworthiness.

Generally, FHA mortgage loans require a minimum 3.5% down payment for FICO scores of 580 and higher. Remember that you can make cash-down payments with gift assistance for FHA loans. However, these gifts must be well-documented to ensure they're gifts, not loans in disguise.

FHA Loans and Credit Score

Many factors determine your FICO score, including:

  • Whether you clear your bills on time
  • The type of credit you have
  • Credit utilization
  • How much recent credit you've taken on
  • The amount of money you owe on your credit cards

If you have a higher credit score, you might be able to qualify for an FHA loan with a higher DTI (debt-to-income ratio). DTI generally refers to the amount of money to clear your debts. To calculate your DTI, divide your total monthly debt payments with your gross income.

The lower your debt-to-income ratio, the better off you'll be. For instance, if your debts (car loans, student loans, etc.) reach $2,000 monthly and your monthly income is $8,000, your DTI is 25%. You can still qualify for FHA loans if you have a higher DTI so long as you have a higher FICO score.

The Federal Housing Administration states that your monthly mortgage loan payment shouldn't exceed 31% of your monthly gross income. Also, your DTI should not be more than 43% of your monthly gross income in some instances if your mortgage is being manually underwritten.

FHA Loan Limits

Generally, there's a maximum limit to what borrowers can get for an FHA loan, and how much you get will depend on the county where your dream home is located. The Federal Housing Administration updates its loan limit based on house price movement each year.

The maximum FHA lending amount for single-family homes in most parts of the state is $420,680. These loan limits are even higher in expensive parts of the country, with single-family home loans maxing out at $970,800.

According to FHA's guidelines, low-cost areas are regions where you can multiply your median home price by 115% and get a product that's less than $420,680. Similarly, high-cost areas are regions where the product of the median home price and 115% is more significant than $420,680.

Ceiling and floor limits vary greatly depending on the cost of living in a specific area. Areas with a lower cost of living will have lower loan limits and vice versa.

Unique exceptions are made for housing in the Virgin Islands, Hawaii, Alaska, and Guam, where home construction is more expensive.

The FHA loan limit in Hardee County, Florida for a GSE 1-unit is $647,200 and $420,680 for an FHA 1-unit.

FHA Interest Rates

FHA rates can be competitive contrasted with conventional loans. This is because the government backing minimizes your risk and enables lenders to offer lower rates.

The interest rates vary depending on several factors, including your credit score, income, down payment amount, the prevailing interest rates, the amount you plan to borrow, your DTI ratio, and more.

FHA Income Requirements

While your eligibility for FHA loans doesn't hinge on a specific income amount, you must present documents that prove that you have a stable employment history.

Also, your income must be verifiable, so you'll need to share W-2s, bank statements, pay stubs, and federal tax returns with your lender.

FHA Loan word on calculator

How Do You Apply for an FHA Loan?

FHA loans are backed by the Federal Housing Administration. And thanks to their government insurance, these loans come with looser credit requirements, low rates, and low down payments to help low and moderate-income buyers in Hardee County achieve their homeownership goals.

Here's what you need to do to apply for an FHA loan in Hardee County, Florida.

Find a Lender

The first step toward getting an FHA loan is searching for an FHA-approved lender. Lucky for you, many mortgage companies and banks offer this type of loan, so finding a trusted lender shouldn't be too hard.

The right lender for your needs will depend on a few factors. For example, if your credit score is low, you want to ensure your lender accepts FHA's minimum score of 580. Your options include credit unions, online lenders, banks, and mortgage brokers.

Do you like person-to-person interaction? If so, look for local lenders that focus on over-the-phone and in-person lending. Also, it would help if you thought about the working relationship between you and your lender.

On the other hand, if you'd like to go alone, many lenders will allow you to complete most or all of the loan process online.

Apply for an FHA Loan in Hardee County, Florida

After finding an FHA-approved lender, the following procedure is to submit your loan application. Since loan rates and terms can vary from one lender to the other, consider contacting multiple lenders to compare offers. This will help you find the best deal.

Generally, lenders will need basic personal and property information to start your mortgage application.

When you apply for an FHA loan, be ready to provide:

  • Your Social Security Number
  • Your full name
  • Income information
  • The property address
  • Down payment amount
  • Employment history

Once you provide the information mentioned above, your lender will need supporting financial documents to help verify your savings, debts, and income.

Down Payment Assistance Programs from Florida Housing

Let's face it; not everyone has the financial resources to spend 20% on a home purchase. But the good news is that forking over 20% upfront isn't required to buy a home in Hardee County. And you can also benefit from down payment assistance programs from Florida Housing.

Down payment assistance programs can give you money to help you afford a down payment or handle the closing costs, which are the charges you pay when finalizing your mortgage. These total about 2% to 5% of the loan principal (and even more when considering the escrow for taxes and insurance).

For instance, on a $200,000 mortgage loan, the closing costs could be approximately $4,000. If all your finances have gone towards saving for a down payment, you may need help paying for the closing costs.

Florida Housing offers a second mortgage loan program that gives eligible borrowers funds that can be used for mortgage insurance premiums, closing costs, prepaid, or down payments. You can also use this fund as a principal reduction on your first mortgage.

This second mortgage loan program comes with the following benefits:

  • Borrowers qualifying for the Fannie Mae HFA Preferred, USDA-RD, and FHA in all counties, including Hardee County, automatically qualify

  • Up to $10,000 for FHA loans

  • Up to $7,500 in conventional loans

The Florida Assist Second Mortgage isn't forgivable. Repayment is held off, except in case of a transfer, sale, refinancing of the house, satisfaction of the first mortgage, or until you cease to occupy the house, at which time, the FL Assist will become payable in full.

Saving for Your Dream Home? Don't Stash Cash Under the Mattress

While some people hold the old-fashioned idea of stashing cash under the mattress, hiding money in your home isn't always the best solution. And this is not only due to the risk of theft or a house fire but also because you'll rob yourself of an excellent opportunity to earn interest.

Plenty of safe investment alternatives can help your money grow instead of losing value sitting under your bed. So if you want to save for your dream home in Hardee County, don't stash all your savings under the mattress. Instead, open a bank account, deposit your money, let it sit for about 60 days, then find a home.

Things to Do in Hardee County, Florida

Central Florida's Hardee County has you covered whether you're looking for an uplifting escape or exhilarating thrills. Here outdoor adventures, incredible tastes, and family fun are always on the horizon.

Situated at the heart of Florida, this epicenter of fun puts you close to top attractions in Central Florida, such as the Peace River and the Streamsong Golf Clubhouse. Here you can take your time savoring the natural beauty and sunny skies the Sunshine State is known for, all while setting out for an action-packed vacation that's sure to satisfy your entire family.

From outdoor spaces and culture to hospitality and history, you'll find it all here as you traverse captivating sights, diverse attractions, and exciting activities that help make Hardee County one of Central Florida's sweetest spots.

Find Adventure on the Peace River

With only a few minutes walk from the center of Wauchula, you can find yourself on the scenic banks of Peace River. You can partake in a local pastime - snorkeling and hunting for fossils, or spend your day wading near the shore.

Other fun activities on the river include picnicking near the shore and fishing. You can also explore the river through canoe, paddleboard, kayak, or excursions, which can run for multiple days. Certified instructors know the area and will help you learn more about the river and everything it offers.

Learn a Thing or Two at the Paynes Creek State Park

This state park is both an outdoor lover's paradise and a historic site. The park area boasts several nature trails, and visitors can participate in various outdoor activities like biking, hiking, canoeing, fishing, bird-watching, kayaking, and wildlife viewing.

The visitor center and the museum have interpretative exhibitions showcasing the lives of pioneers in the 1800s and Seminole Indians. On-site amenities include a boat launch, a picnic area, and a playground.

Visit the Hardee County Wildlife Refuge

The Hardee County Wildlife Refuge is home to a few exotic wildlife species and a variety of native Florida ones. Visitors to this area can explore and view these wildlife animals in a natural habitat.

While you're here, take the time to walk along the high boardwalk and observe these animals as you learn about their backgrounds and stories.

Enjoy Some Hispanic Cuisines at the El Rincon Del Mofongo

If you're yearning for some Hispanic cuisines under the direction of a talented chef, you can't miss heading to El Rincon Del Mofongo. Aside from Dominican and Spanish cuisines, this restaurant is well-known for its Cuban sandwiches, mofongo, and pork.

Many visitors have highlighted that the staff here is cheerful and welcoming. So, if you want to enjoy excellent service and try something new, all at an affordable price, you should head over to El Rincon Del Mofongo.

Are FHA Loans Right for You?

Generally, FHA loans make homeownership in Hardee County, Florida more widely available to borrowers because of their low credit scores and down payment requirements.

However, keep in mind that this flexibility comes at a price. You'll have to pay mortgage insurance over the life of your loan.

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

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