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

Buying a house using a mortgage loan can be daunting for first-time home buyers, especially those who don't have the money saved up for a down payment. Fortunately, if you live in Marion County, Florida, and want to achieve your homeownership dream, several FHA programs can offer low-down-payment options.

Under the U.S. Department of Housing and Urban Development (HUD), Congress created FHA loans to assist first-time home buyers who might not otherwise qualify for a conventional mortgage because they don't have enough money saved up for a larger down payment.

FHA loans are an excellent option if you're looking to buy your next home with a low down payment, and Marion County FHA loan borrowers have even more options than most other places in the country. However, you must understand the basics of these loans to make the application process easier and quicker.

This article will explore essential things you need to understand about FHA loans, including the famous 3.5% down payment, loan limits, the available down payment assistance programs, whether you can use cash under the mattress, and other intriguing things about Marion County, Florida. Read on to learn more.

Understand the FHA Loans

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). It is popular especially among first-time home buyers because they allow down payments of 3.5% for credit scores of 580+.

That's a considerable difference from conventional loans, which require a minimum credit score of 620. You can also apply for an FHA 203(k) mortgage if you plan to buy a home that needs extensive repairs or renovations to make it livable or habitable.

Applying for an FHA loan is much easier than a conventional loan because they have less strict requirements. As part of your application process, you'll need to provide documentation such as pay stubs or bank statements to show income and assets.

Other requirements include meeting the standards on debt ratios and credit history. Additionally, some people may be disqualified if they have been foreclosed on in the past two years.

The critical difference between an FHA loan and other loans is that most other loans require a 20% down payment, which means more cash upfront to buy a house.

The lower initial cost of getting into a home makes it easier for first-time homeowners who don't have enough savings built up to purchase a home. Below are more basic details you need to understand about FHA loans.

The 3.5% Down Payment

The minimum down payment for an FHA loan is just 3.5% of the home's purchase price. That means if you're buying a $200,000 home, you'll only need to come up with $7,000 for your down payment.

And if you're having trouble coming up with that much cash, there are plenty of down payment assistance options available to help you out. Plus, your down payment can come from a family member or friend as a gift with an FHA loan.

However, you must pay mortgage insurance premiums (MIP), which protects the lender if you default on your loan repayment.

Mortgage insurance premiums are typically a must for loans secured with less than 20% down and will be added to your monthly payment (they can range from 0.85% to 1.75%).

If you make a small down payment, your MIP will be higher, while if you make a large down payment, your MIP will be lower.

For example, with 3.5% down, your MIP will be 1.75%, but with 10% down, it will be 0.85%. The amount depends on the size of your down payment, the length of time you have until the expiration date of your FHA-insured fixed rate mortgage, and other factors like interest rates and the type of construction used in building the house.

FHA Loan Limits in Marion County, Florida

The Federal Housing Administration (FHA) loan limit is the maximum dollar amount a borrower can qualify for from this government program.

The loan limit is based on the county median home price and can vary from one county to the next. The 2022 FHA loan limit in Marion County, FL, is $420,680 for a single-family home, $538,650 for a duplex, $809,150 for a fourplex, and $651,050 for a triplex.

FHA Down Payment Assistance Programs in Marion County, Florida

Are you looking to buy a home in Marion County, Florida but don't have the means to make a down payment? There's good news for you, the Federal Housing Administration (FHA) offers several down payment assistance programs designed to help qualified first-time homebuyers overcome this common hurdle to homeownership. These programs can help qualified buyers earn up to $10,000 in down payment assistance. So read below to find out which program could be right for you.

A popular FHA down payment assistance program is the second mortgage program or FL Assist Program from Florida housing, which offers up to $10K for a down payment, closing costs, and other home transaction costs. The program is only available to first-time home buyers, so if you own or plan to buy a second property, you might not be eligible for this assistance program. If you're eligible for the second mortgage program, you'll enjoy a variety of benefits, including:

  • As of June 1, 2021, you can get conventional loans up to $7,500 or FHA and USDA-RD loans up to $10,000.

  • Zero percent, non-amortizing, deferred second mortgage.

  • Automatic qualification for this assistance program if you're a qualified FHA, USDA-RD, or Fannie Mae HFA Preferred borrower since it's not a stand-alone second mortgage loan program.

Note that the FL Assist isn't forgivable. Repayment is deferred, except if you sell the property, refinance the property, transfer or satisfy the first mortgage, or until you cease to occupy the property. At this juncture, the Florida Assist loan must become payable in full. The FL Assist can't be merged with other FL Housing's down payment programs.

Other Down Payment Assistance Programs

Additionally, state and local governments, private lenders, and non-profit organizations offer down payment assistance programs that provide grants and loans you'll never have to repay. There are also loans available to members of the military, veterans, surviving spouses, and low-income buyers. Each aid program has its unique requirements, including a minimum credit score, a specific income level, and a debt-to-income ratio (DTI) that's just right.

The eligibility of most programs is determined by income and credit history, although state-specific requirements may differ. Most programs require applicants to send in a formal application, and you may need to complete a training course in some cases. Plans provide varying levels of financial assistance. Some lenders assist with a percentage of the purchase price, while others use a fixed amount.

House Symbol with Silver Key on Wooden Table

Is Cash Under the Mattress Allowed for FHA Loans?

To apply for an FHA loan, you need to have enough cash in your bank account to cover the down payment and closing costs. With that in mind, you might wonder if you can use the cash under your mattress to help fund your down payment and other transaction costs on an FHA home loan. The answer is no; you can't use the cash under your mattress to meet your loan closing costs obligation. So read on to find out why this type of cash is a NO for FHA loans and if there are other ways to make the cash usable for your down payment and costs.

The Federal Housing Administration (FHA) has regulations and rules to comply with if you want to finance your home purchase with an FHA loan. The agency does this to prevent FHA loans from being used as a front for money laundering. For example, you will run into many problems if you intend to use the cash under your mattress, including decreasing your chances of getting approved for an FHA loan. The FHA won't accept such money as an eligible payment source.

The trouble with mattress money or keeping cash in a secret place in your home is that it's untraceable. Lenders can't confirm that it came from you, how long you've been saving it, or if it's even included in your ongoing savings plan. One of the main reasons your loan might be delayed or rejected is the inability to provide enough evidence that you'll manage to pay the FHA loan down payment, closing costs, or repay the loan using the cash under your mattress. Therefore, you must present proof of income and financial stability to lenders before a loan is approved. This could include payment stubs, assets, and cash savings from traceable sources.

If you have money under your mattress or stashed in secret places in your house and you plan on using it for your FHA loan down payment and closing costs, deposit it into a bank account as far in advance as possible. Thus, your bank account will have mature funds, and your statements won't show any hefty deposits when the lender reviews them. Some of the best ways to bank the cash under the mattress include using an ATM that accepts cash deposits, visiting your local bank, or online banking.

Fun Things to Do With Your Family in Marion County, Florida

Marion County, Florida, may not be one of the well-known vacation destinations in the world, but it has some tremendous activities that make it a family-friendly place.

Whether you want to go hiking, swim in nature's pools, learn about regional history, visit the county attractions, or go shopping, Marion County has something to offer everyone in the family.

Here are the top family-friendly activities you can do in Marion County, Florida and make lasting memories.

Zip Line at the Canyons Zip Line and Adventure Park

Canyons Zip Line Park is the perfect place for an adrenaline-pumping day with the family. The park offers an exciting way to explore the natural beauty of Florida. The park has multiple zip lines, ranging from beginner to expert, and a kid's zone featuring a junior zip line and other fun activities, so there's something for everyone.

Plus, there's a ropes course and rock climbing wall for those who want to challenge themselves even further. And if you're looking for a truly unique experience, you can even go on a night zip line tour.

Go to the Beach

The beaches in Marion County are some of the best in Florida, and there's nothing quite like a day spent at one of them with your family. The sun, the sand, and the waves are sure to please your family. The weather in Marion County is beautiful year-round, and plenty of beach activities will keep everyone entertained. From building sandcastles to swimming and boogie boarding, there's something for everyone at the beach.

When you're done playing in the water, you can relax on the beach, tan, enjoy a picnic lunch, or stop by one of the beach eateries and grab a bite. Below are some of the best beaches in and near Marion County:

  • Eatons Beach
  • Lady Lake
  • Lake Weir
  • Hampton Beach

Visit Historic Downtown Ocala

Take a step back and explore all that Historic Downtown Ocala offers. If you're interested in farm-to-table dining, artisan beers, some live music, and cultural/shopping opportunities, downtown Ocala will satisfy all your needs. Its brick-lined streets and quaint stores make it the perfect place to spend an afternoon with the family.

You can find unique shops, restaurants, and cafes, as well as a variety of historical buildings. Plus, there are plenty of activities for kids of all ages.

Visit the County's Amusement Parks

Regarding family-friendly attractions, Marion County has a variety of large and smaller parks and playgrounds scattered throughout the county. So whether you're looking for a big day out or a quick afternoon activity, you'll be sure to find it here.

Your little ones can explore various themed lands with some of their favorite characters from Toy Story, Cars, Ratatouille, and more. In addition, there are roller coasters, water rides, and plenty of educational exhibits that will make the day worthwhile for kids and adults alike. Below are some of the famous amusement parks in Marion County:

  • Calesa Township
  • Sholom Park
  • Lake Lillian
  • Scott Springs Park
  • Brick City Adventure Park
  • Easy Street by Funworks
  • Silver Springs State Park
  • Sky Zone Trampoline Park
  • City of Ocala Water Reclamation Facility 3
  • Fort McCoy / Lake Oklawaha KOA Holiday

Visit a Restaurant and Enjoy a Hispanic Cuisine

Regarding food, Marion County knows how to do it right. One of the best things to do here is to visit one of the many restaurants and enjoy delicious Hispanic cuisine. From traditional dishes like paella and empanadas to more modern food like ceviche and tacos, there's something for everyone to enjoy.

And don't forget to save room for dessert. Mexican pastries are plentiful and range from decadent cakes and tres leches to flan, bun~uelos, churros, and dulce de leche ice cream. Stop by one of the following restaurants in Marion County to enjoy a tasty Hispanic cuisine with your family:

  • Mi Tierra Latina Mexican & Peruvian
  • Mi Guanajato Mexican Restaurant
  • La Ceiba Latin Food Restaurant
  • Los Magueyes Mex Belleview
  • Chicken Time Cuban Cuisine
  • Latin Stop Cafe & Bakery
  • Latinos y Mas Restaurant
  • Latin Family Restaurant
  • Bob Evans

Go Shopping

It may not seem like the most exciting activity, but shopping is a great way to spend time with the family. You can bond while you search for the perfect items, and you can also teach your children about budgeting and responsible spending. Plus, it's a great way to get out of the house and explore your local community.

There are plenty of places to go shopping in Marion County, Florida. You can find clothes, toys, and anything else you might need for your family. Plus, there are plenty of sales and discounts to be found. Check out the following shopping areas in Marion County.

  • Marion Oaks Shopping Center
  • Shady Oaks Shopping Center
  • Paddock Mall
  • Market of Marion
  • Mossy Oaks Antique Mall 6260
  • Pine Plaza Shopping Center

Bottom Line

An FHA loan or Federal Housing Administration loan can be an excellent option for those who want to buy real estate but don't have enough money saved up to pay the total cash price of their home.

That's where the FHA loan shines, as they allow borrowers to borrow up to 95% of the total home value with just 3.5% down from their funds. This makes it possible to purchase a home without putting all your savings into the initial down payment.

If you want to achieve your homeownership dream in Marion County, Florida, don't hesitate to contact an FHA lender or your local Federal Housing Administration office to get the expert help you need to start your mortgage application.

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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