The FHA loan program was designed to help first-time homebuyers with little to no money for a down payment achieve the American dream of homeownership, and it's been doing so for decades now.
You may have heard of FHA loans in Manatee County, Florida, and their benefits, but you may not know everything that goes into this famous loan program. From how much money you can borrow to what type of property you can buy, there are many details you should consider before committing to an FHA mortgage.
This article will walk you through everything you need to know about FHA loans, including 3.5% down payment, loan limits in Manatee, down payment assistance programs from Florida Housing, if cash under a mattress is allowed, and other exciting things to do in Manatee County, Florida. Keep reading to learn more!
Are you a Hometown Hero? Find out your eligibility for the Hometown Heroes Loan Program in Manatee County, Florida.
What is an FHA Loan?
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), a U.S. government agency that provides mortgage insurance on loans made by FHA-approved lenders. This mortgage insurance protects lenders against losses from borrowers who default on their loans. This helps individuals who might not be able to get approved for a traditional mortgage due to bad credit qualify for financing. FHA loans are popular, especially among first-time home buyers, as they allow down payments of 3.5% for credit scores of 580+.
The interest rates on FHA loans are typically lower than those of conventional mortgages. However, you must pay mortgage insurance premiums (MIPs), which protect lenders if you fail to repay the loan. With that in mind, below are more basics of FHA loans you need to comprehend before starting the application process.
The 3.5% Down Payment
You may want to consider an FHA loan if you're looking for a low-down payment option when buying a home. You can put as little as 3.5% down on your new home with an FHA loan. This down payment is often attractive to first-time homebuyers because it saves you thousands more than other home loans.
However, that doesn't mean you don't have to pay mortgage insurance premiums (MIP). MIP is required with any loan with less than 20% down. MIP is calculated and paid monthly alongside your principal and interest payments. Generally, the rate of your MIP will be based on how much you're putting down; the lower your down payment, the higher your MIP costs. For example, if you put 3.5% down, your MIP will be 1.75% of the loan amount or around 0.85% if you put 10% or more down.
FHA Loan Limits in Manatee County, Florida
The first eligibility requirement for an FHA loan is that you must live in a state that participates in the FHA program and buy your home in the county in that specific state. Even within the same state, different rules vary depending on your county, including loan limits and income requirements. This is primarily due to the varying costs of living throughout the Sunshine State and different median income levels among its various regions.
FHA loan limits in Manatee County, Florida range from $420,680 for a one-living unit to $809,150 for a four-living home. The maximum FHA loan amount in high-cost areas (such as large metropolitan areas) is $970,800 for 2022, according to the Department of Housing and Urban Development. In Manatee County, the limit for Home Equity Conversion Mortgage (HECMs) in 2022 is also $970,800 and does not depend on the size of your home.
Down Payment Assistance Programs
If you're looking to buy a home in Florida and you don't have enough money saved up to make the 3.5% down payment, you may be able to apply for an FHA down payment assistance program from the Florida Housing. Florida Housing offers a second mortgage program called Florida (FL) Assist that eligible homebuyers can use for down payments, closing costs, prepaid, mortgage insurance premiums, or principal reductions on their first mortgage.
This program can lower the cost of buying your first home by granting you up to a $10K down payment and closing costs assistance. However, the program is mainly available to first-time homebuyers trying to purchase their primary residence, so if you already own a home or plan on buying a second property, you might not be eligible for the assistance program. If you're qualified, this second mortgage program will offer the following benefits:
You will automatically qualify if you're eligible for the FL First Mortgage Loan Program (FHA, USDA-RD, or Fannie Mae HFA Preferred) in any county. This is not a stand-alone second mortgage program.
You can get up to $7,500 for conventional loans and up to $10,000 for FHA and USDA-RD loans (Effective with NEW loan reservations on June 1, 2021).
- 0%, non-amortizing, deferred second mortgage.
Typically, eligibility is determined by your household income and credit history, but eligibility can vary by state and program. An application is usually required, and sometimes you're also required to attend training on how to get a mortgage and maintain your finances. Amounts awarded vary based on the program. Some offer a percentage of the sale price, while others cap assistance at a fixed dollar amount.
Additionally, the FHA Loan Program also offers a variety of down payment assistance programs to help you with your down payment. Some programs offer grants or loans that don't have to be repaid, while others provide interest-free loans that may be forgiven if you live in the home for a certain number of years. The programs are available through state, local governments, non-profit organizations, and private lenders.
Each assistance source has its unique eligibility requirements and application process. In most cases, you must have a credit score of 620 or higher and have income that meets the program requirements. Some programs will also take your debt-to-income ratio into account.
Look at your city and county's websites for details on how to apply for any loans or grants they offer. For specific questions you can't find online, contact the company by phone or email. Check with your mortgage lender to make sure it works with the program.
Cash Under the Mattress? Here's What You Need to Know
Cash under the mattress seems like an excellent place to get your extra money for the FHA down payment and closing costs, right? Unfortunately, there are some serious problems with this approach. Not only does it count as secret money, which counts against you in an FHA loan, but it also represents one of the worst places to store your money because of several critical issues associated with this storage method.
The Federal Housing Administration no longer allows borrowers to use the cash value as a qualifying payment source when applying for FHA-insured loans. This is an effort to fight fraud and ensure you're not using these loans as money laundering investments instead of mortgages to purchase homes.
One of the most problematic issues with mattress money or money stashed in hidden places in your home is that it doesn't have a paper trail. Your lender can't verify where the fund came from, when you saved it, or even if it's one of your long-term financial habits. Mattress money can't provide solid proof that you're capable of paying back a loan, which is one of the leading causes of loan delays or denials. Before approving your loan, lenders must see evidence of your regular income and savings.
Before applying for a mortgage, the lender will ask questions about any large deposits from your mattress or personal savings sources. In most cases, you may need to provide a letter of explanation or other documents to explain the origin of the deposit. Even if the funds are legitimate, such as the savings from your job, answering the lender's questions may be time-consuming, potentially delaying the mortgage process.
If you have cash under your mattress or in a safe and plan to use it for the down payment, you should deposit it in your bank account three months in advance. By doing so, the funds will be seasoned in your bank account, and there will be no significant deposits into your account when the lender is reviewing your bank statements. You have several options for depositing cash into your bank account, including visiting your local bank, an ATM that accepts cash deposits, or online banking.
Family-friendly Activities in Manatee County, Florida
Manatee County, Florida, is one of the most family-friendly places in the United States, with year-round activities and attractions designed to suit every member of your family.
Whether you want to spend the day at the beach, in your hotel room, in a shopping mall, or explore the various manufactured and natural attractions, there are plenty of fun things to give your family an unforgettable experience.
Check out the following family-friendly things in Manatee County, Florida!
Explore Sarasota Bay
Sarasota Bay is a sheltered lagoon and a popular destination for boating and fishing. It's also home to a well-known colony of bottlenose dolphins. More than 20,000 dolphin fans each year flock to Sarasota Bay for organized encounters with these friendly mammals. Those who don't want to join organized dolphin encounters can still see these animals from land at various points around Tampa Bay.
And if you're lucky, you might even see a manatee. While here, don't forget to check out some local shops where you can find everything from authentic Cuban cuisine to locally-made gifts.
You can also go kayaking, fishing, swimming, and plenty of places to picnic and relax on the beach. If you want to get out on the water without getting wet, take a boat tour with a private boat tour, which will take you around the bay.
You'll be able to see some mangroves, other wildlife, and historic buildings in the area. You can also walk or bike along the trails and watch for birds such as pelicans, herons, and cormorants. Bring your camera so you can capture some great shots.
Go to the Beach
The best part about living in Florida is that the beach is never more than a short drive away. Manatee County is home to some of the best beaches in The Sunshine State. And who doesn't love a day at the beach? The sun, sand, and waves are the perfect way to relax, have fun, and enjoy quality time with your family. And best of all, it's free.
So pack up your sunscreen and beach towels and head to one of Manatee County's many beautiful beaches. The following are some of the best beaches in Manatee:
- Manatee County Beach
- North Longboat Key Beach
- Beer Can Island Beach
- Bradenton Beach
- Coquina Beach
- Anna Maria Beach
- Cortez Beach
- Coquina Bayside Park
- Holmes Beach
Camping is a great way to bond with your family and enjoy nature. Manatee County has plenty of camping options, whether you want to rough it in the woods or camp in style at an RV park. You can also book some cabins or cottages if tents or RVs aren't your things.
Some activities you can enjoy while camping include fishing, hiking, swimming, and picnicking. Get away from TV screens and enjoy some family time together this weekend in one of the following campgrounds in Manatee County:
- Lake Manatee State Park
- Winter Quarters Manatee RV
- Bradenton / Hunsader Farms KOA Holiday
- Horseshoe Cove RV Resort
- Pleasant Lake RV Resort
- Terra Ceia RV Resort
- Frog Creek Campground
- Timberlane RV Park & Resort
- Jiggs Landing
Visit the Parks
From dog parks to amusement parks and playgrounds, Manatee County has a variety of parks for families to explore. A great way to spend time together as a family is by visiting one of the many parks in Manatee. From swimming and sunbathing to picnicking and playing games, there are plenty of ways to enjoy a day in one of these parks.
You can pack a picnic lunch and enjoy the beautiful scenery or take advantage of playgrounds and hiking trails if you want to be more active. And the best part is that most of these activities are entirely free. The following are some of the famous parks in Manatee County:
- Lincoln Splash Pad
- Riverwalk Splash Park
- Palma Sola Causeway Park
- Chummy Charters
- Creekwood Park
- Tom Bennett Park
- Lake Manatee State Park
- John H. Marble Park
- Portosueno Park
- Manatee Mineral Springs Park
- Manatee County Parks and Natural Resources
There are plenty of great places to go shopping in Manatee County, whether you're looking for clothes, souvenirs, or just about anything else. There are great options for those who want to do some serious shopping, and plenty of smaller shops and boutiques are scattered throughout the county.
For a unique shopping experience, check out the local farmer's markets, where you can find fresh produce and other goods. Below are the best places to go shopping with your family:
- Bayshore Gardens Shopping Center
- Shoppes at University Center
- Fountain Court Shopping Center
- Manatee West Shopping Center
- Creekwood Crossing
- Main Street At Lakewood Ranch
- Lakewood Ranch Plaza
- Desoto Junction Shopping Center
- Red Barn Flea Market
Visit a Restaurant or Cafe and Enjoy a Hispanic Cuisine
When it comes to family-friendly activities, one of the best things you can do is visit a restaurant or cafe specializing in Hispanic cuisine and enjoy a meal together.
Whether you want Mexican, Cuban, Puerto Rican, or something else, you'll be able to find it here. Not only will the kids enjoy the food, but they'll also experience a different culture. Plus, it's a great way to support local businesses.
Here are some of the best places to get Hispanic cuisine in Manatee County:
- Sabor Latino Restaurant
- Habanero's Mexican Grill and Bar
- Mr. Fajitas Mexican Grill
- Los Laureles Supermarket
- El Primo Taqueria
- Casa Maya Mexican Restaurant
The FHA loan is one of the most popular ways to buy a home in Manatee County, Florida. It's backed by the government and provides plenty of benefits to buyers at all income levels and credit types. One of the best features of an FHA loan is that several low-down payment options are available, making it easy to buy a home with little money out of pocket up front.
Contact a mortgage counselor or your local FHA offices to help you understand these low-down payment options and, if you meet the eligibility criteria, to make an informed decision when buying your next home.