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

When buying a home in Putnam County, Florida, the hurdle of putting down 20% or more on your mortgage might seem like an impossible feat. Fortunately, the Federal Housing Administration (FHA) offers attractive low-down-payment loan options to help first-time buyers get into their new homes.

You can use an FHA loan to purchase a home, refinance your current home, or renovate your primary residence. This type of loan offers buyers affordable monthly payments, little-to-no down payment options, and flexible guidelines, making it possible to buy a house with as little as 3.5% down.

FHA loans are specifically designed to help buyers who would not otherwise qualify for a home loan because of insufficient income or poor credit history. However, learning about this outstanding mortgage option is essential before starting your application process.

This article will walk you through the basic info on FHA loans, including the 3.5% down payment, loan limits, various down payment assistance programs, whether you can use cash under the mattress for FHA closing costs, and intriguing things about Putnam County, Florida. Keep reading to discover more.

Basic Info on FHA Loans

An FHA loan is insured by the Federal Housing Administration (FHA), making it popular especially among first-time home buyers due to its low down payments of 3.5% and reasonable requirements.

Credit requirements are more lenient than other loans, so borrowers with less than perfect credit histories may be eligible. Also, there's no strict requirement on your employment history or length of employment with your current employer.

However, you must pay mortgage insurance premiums (MIP), which protects FHA lenders against losses if you default on your mortgage repayment agreement.

If you default on your loan, the FHA will step in and cover the loss. Because of this, lenders are more willing to work with borrowers who might not otherwise qualify for a loan. Read on for more basic info on FHA loans.

The 3.5% Down Payment

The Federal Housing Administration (FHA) offers a mortgage option with a low down payment requirement of only 3.5%. This is an excellent option for first-time homebuyers in Putnam County, Florida, who may not have the savings for a larger down payment.

In addition, this loan option allows for gifts, grants, and other forms of assistance to be used as part of the down payment and closing costs. Talk to an FHA lender about how you can use these assistance funds to help you get into your dream home.

Typically, mortgage insurance premiums are required for loans acquired with less than 20% down and are added to your payments; they can range from 0.85% to 1.75%.

Small down payments will raise your MIP, while a sizeable down payment will lower it. So, for example, with 3.5% down, it will be 1.75%, and with 10% down, it will be 0.85%.

Your down payment depends on your down payment amount, how long you have left until the fixed rate mortgage expires, and other factors, such as interest rates and how the house is built.

FHA Down Payment Assistance Programs in Putnam County, Florida

Are you looking to buy a home in Putnam County, Florida but have trouble saving up the down payment? If so, then you're not alone. Many first-time home buyers in Putnam County, Florida, have had to delay buying their dream home because they can't afford it.

Fortunately, various down payment assistance programs are available to help you finally realize your dream of owning your own home and buying the home of your dreams in Putnam County, Florida.

While these programs are not intended to provide all the funds needed to purchase a home, they can make it possible to buy a home with little or no cash out of pocket up front. While some programs require a formal application, others might require you to complete a training course.

Eligibility is determined by income and credit history, although state-specific requirements may differ. Various lenders offer different levels of financial help. Some lenders give a percentage of the purchase price, while others offer a fixed amount.

One of the most popular FHA down payment assistance programs is the second mortgage program, or FL Assist program from Florida housing, which offers up to $10K for the down payment and other closing costs.

You must be a first-time home buyer in Putnam County, though. So if you own or plan to invest in a second home, you'll not be eligible for this assistance program. Some of the advantages of a second mortgage program include:

  • Meet eligibility requirements for FHA, USDA-RD, or Fannie Mae HFA Preferred. You'll automatically be eligible to receive this assistance because it's not a stand-alone second mortgage program.

  • As of June 1, 2021, you're eligible to receive the assistance of around $7,500 for conventional loans or up to $10,000 for FHA and USDA-RD loans.

  • 0%, non-amortizing, deferred second mortgage

FL Assist is not a forgivable loan. Repayment is deferred, except when you sell the home, refinance it, move out, or pay back the first mortgage. So, in this instance, the Florida Assist Loan will have to be paid in full.

Additionally, you cannot combine this second mortgage program with Florida Housing's other down payment assistance programs.

Additionally, various government, non-profit organizations, and private lenders have down payment assistance programs that provide grants and loans you'll never have to repay. On the other hand, some assistance programs are tailored for active duty military, veterans, surviving spouses, and low-income buyers in Putnam County.

The eligibility requirements for each aid program can be different, but most of them will focus on your income level, credit score, and debt-to-income ratio (DTI).

FHA Loan Limits in Putnam County, Florida

The allowable borrowing limits for FHA loans depend on where you live in the United States. The Federal Housing Administration (FHA) loan limit for a single-family home in Putnam County is $420,680. The limit for a four-plex is $809,150, $651,050 for tri-plex, and $538,650 for a duplex.

With these attractive loan limits, you'll manage to finance a more expensive home with an FHA loan in Putnam County than with conventional loans.

Can You Use Cash Under the Mattress for an FHA Loan?

If you want to buy a home with an FHA loan, you'll need to come up with some cash as part of your down payment and closing costs—usually 3.5% of the home's total purchase price. When coming up with this money, most borrowers turn to personal savings accounts or gifts from family members and friends.

But can you use cash under the mattress or cash stashed in hidden places in your home for an FHA loan? NO. You can't use the cash under the mattress to cover your loan closing costs. Read on to find out why FHA doesn't accept this type of cash and if there are any alternatives to using this cash for your down payment and closing costs.

FHA regulations and guidelines must be followed. Using the cash under the mattress will hit you with numerous problems, including decreasing your odds of getting approved for an FHA loan. Stashing money under your mattress or a safe in your home means there's no paper trail. That means your lender may be unable to determine when and where the money came from or whether it's part of your regular savings routine.

The Federal Housing Administration introduced this policy to prevent FHA loans from being used as an instrument to launder money. Therefore, the agency won't accept cash under the mattress as an eligible down payment source.

The most significant reason your loan application could be denied is the absence of sufficient proof you can pay the down payment, closing costs, or repay the mortgage with cash under the mattress.

For this reason, you must have an established source of income and be financially solvent before your lender agrees to issue you a loan. This could include providing proof of income, employment history, pay stubs, tax information, savings history, and bank statements.

To be on the safe side and avoid any possible delays in the loan process, you should place all funds for the purchase in a bank account with the lending institution beforehand. Deposit the cash at least 60 days before your transaction begins.

This way, your bank account will have seasoned funds, and the FHA won't notice any large deposits on your bank statement, which could raise suspicion with your lender. A good way to deposit cash under the mattress is by visiting your local bank branch, online banking, or using an ATM that accepts cash deposits.

Wooden blocks and book with words FHA mortgage

Family-Friendly Activities in Putnam County, Florida

Putnam County, Florida, has long been one of the state's most popular destinations due to its many family-friendly attractions and events. Whether you're looking for a spot to picnic, shop, dine, swim, play with your family, or spend an afternoon enjoying nature, Putnam County has plenty of options for people of all ages.

Here are some family-friendly activities in Putnam County that will bring your whole family together and help you remember why you love your hometown.

Go Biking or Hiking

Hiking and biking are great activities to do together as a family. Plus, it's a great way to bond with your kids. Not only will you get some exercise, but you'll also enjoy the beautiful scenery of Putnam County. There are several hiking trails and bike trails all over the county you can check out.

The Palatka Municipal Nature Park has about three miles of walkways for visitors to explore, which provides a nice escape from city life for an afternoon hike or bike ride. The St. Johns River Waterway Trail offers miles of easy walking or biking on scenic lakeshores and shorelines on the St. Johns River.

Other biking and hiking trails in Putnam County include:

  • Caravelle Ranch Wildlife Management Area
  • Dunns Creek Park to Dunns Creek Bridge
  • Rice Creek Conservation Area
  • Florida Trail at Buckman Lock
  • Ravine Gardens State Park
  • Dunn's Creek State Park
  • Brown's Landing to Palatka
  • Rat and Polly Islands
  • Lake Stella
  • Bear Creek

Visit Various Amusement Parks

There are many amusement parks around Putnam County your whole family can enjoy. These parks offer something unique for people of all ages and interests. From the beautiful waterfalls to the roller coasters, rides, attractions, festivals, tours, and exhibits, you'll have a blast at any Putnam park!

This is it if you're looking for an inexpensive way to spend the day with the kids. Stop by one of the following parks to have a fun-filled day with your family:

  • Riverfront Park
  • Ocklawaha River
  • Ravine Gardens State
  • Dunns Creek State Park
  • Etoniah Creek State Forest

Go to the Beach

Whether you're looking to relax on the sand or get active in the waves, going to the beach is a great way to spend time with your family. And luckily, Putnam County boasts plenty of beaches to choose from.

All beaches in and near Putnam are perfect for swimming, surfing, sunbathing, fishing, building sandcastles, hunting for shells, boating, picnicking, and playing. Here are a few of the local favorites:

  • Vilano Beach
  • Butler Beach
  • Drayton Island
  • Crescent Beach
  • Vilano Beach Pier
  • Saint Augustine Beach

Visit the City of Murals

The City of Murals is a great place to take the family for a day of exploring and learning. Over 30 murals depict different aspects of the city's history. You can also pick up a map at the visitor's center to ensure you don't miss any. And if you're feeling extra adventurous, you can try painting one yourself.

There are also events like open mic nights, screenings of indie films, and live music performances scheduled throughout the year. It's also an excellent spot for lunch with family or enjoying an evening meal with your significant other.

Visit the Rice Creek Conservation Area

Historically, Rice Creek Conservation Area was an indigo and rice plantation in the 18th century. Today you and your family can explore the area while enjoying hiking, bicycling, horseback riding, and primitive camping and enjoy a wide range of recreational activities.

The area is also a wildlife corridor where you'll find beavers, otters, deer, bald eagles, and more than 20 species of birds throughout the property. There's no admission or parking fee, but plenty of donation boxes are available if you want to show appreciation.

Visit a Restaurant for a Delicious Hispanic Cuisine

Are you looking for a delicious and unique dining experience with your family? Look no further than Hispanic restaurants in Putnam County. These family-owned restaurants serve authentic Hispanic cuisine that will tantalize your taste buds from tacos, pupusas, tamales, enchiladas, and other tasty Hispanic dishes.

Plus, the friendly staff will make you feel right at home. Visit one of the following restaurants in Putnam for Hispanic cuisine to see what you've been missing!

  • Colee's
  • Baja Taco
  • Mariachiles
  • Tacos mi casita
  • Salsas Cocina Palatka
  • The Taco Gringos Original
  • El Amigo Mexican Restaurant
  • La Hacienda III Mexican Restaurant

Visit the Shopping Areas

Shopping is an excellent activity for families because it can be done together and at a leisurely pace; plus, there are usually plenty of places to stop for food and restroom breaks. Putnam County has several great shopping options, including the Palatka Mall and the St. Johns River City Marketplace.

In addition to traditional shopping malls and retail centers, there are several other family-friendly shopping options with everything you need for your day-to-day life, including extensive selections of high-quality apparel at attractive discounts.

Below are more popular shopping areas in Putnam County, Florida:

  • Lady Bug's Gift Shoppe & Home Decor
  • Lemon Street Market & Mercantile
  • Interlachen Thrift & Gift Shoppe
  • Town&Country Shopping Center
  • Palatka Bussiness Center
  • Ol Panchos Used Trucks
  • Community Thrift Shop
  • Palatka Marketplace
  • Elsie Bell's South
  • Eastgate Square
  • Bealls Outlet
  • Charmed

Bottom Line

Regardless of your current financial situation or credit history, there's probably some low-down-payment loan you can take advantage of. While conventional loans typically require 20% down, the Federal Housing Administration (FHA) loans can be used with as little as a 3.5% down payment.

The FHA loan program was created to increase the availability of affordable home ownership for first-time home buyers or homeowners looking to refinance their mortgages. It's also an attractive option for those looking to buy homes in low-income or rural areas where conventional financing is typically unavailable.

Contact your local FHA lender in Putnam County, Florida, to confirm your eligibility and get counseling on how you can take advantage of this low-down payment option.

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