If you are looking to take out an FHA loan to purchase a home in Florida, you need to know what FHA loan limits are in Florida before applying. The right FHA home loan can help you achieve your homeownership goals without breaking the bank, especially since many Americans qualify for FHA loans even if they have debt or lower-than-average credit scores.
Read on for more information about FHA loans and FHA loan limits in Florida.
What Is an FHA Loan?
FHA loans are mortgage loans insured by the U.S. Federal Housing Administration, meaning they are government-backed loans.
When a mortgage loan is government-backed, that means the lender is protected if the borrower defaults on their loan. This allows lenders to offer mortgages that are easier to qualify for and provide better rates and terms.
FHA loans are a great option for aspiring homeowners without much cash saved up for a down payment. Many FHA home loan borrowers can secure home loans with a down payment as little as 3.5%.
FHA loans are also good for borrowers with less than perfect credit history or previous delinquencies such as a prior bankruptcy. As far as the credit score required to qualify, it can vary by lender and the size of your downpayment.
In most cases a credit score of at least 580 is required to secure an FHA loan with 3.5% downpayment. Some lenders may allow for a lower credit score, but this may require a higher down payment.
One of the main downsides is that all FHA loans require mortgage insurance premium (MIP), regardless of down payment amount. Additionally, FHA loans can only be used to finance a primary home. In other words, if you’re in the market for a vacation home or investment property, an FHA loan would not be the right loan option for you.
Even so, FHA loans are an affordable and effective path to homeownership for millions of Americans and is a worthwhile option to explore with your lender to determine if it makes sense for your financial goals.
How Do FHA Loan Limits Work?
FHA loan limits are the maximum amounts of money that the FHA will insure for different properties, including single-family homes and multi-family properties. FHA loan limits usually align with the conventional loan limits set by the Federal Housing Finance Agency (FHFA), also known as the conforming loan limit, which is used by loans backed by Fannie Mae and Freddie Mac.
Both the conforming loan limits and FHA loan limits are adjusted annually to ensure that they reflect the current market and home prices.
FHA loan limits are primarily affected by the following:
- Property Location: For example, FHA loan limits will usually be higher in areas where market demand has resulted in higher home prices. A high-cost area is usually characterized as an area where 115% of the local median home value exceeds the baseline loan limits.
- Property Type: The type of property, such as a single-family home or a multifamily home (e.g. duplex or triplex). Generally, single-family homes are less expensive than duplexes or other multifamily homes, so the FHA loan limits are set lower.
Generally, though not always, FHA low-cost area limits are approximately 65% of the country’s conforming limit for single-family properties. In contrast, the FHA sets loan limits of up to 150% for high-cost areas.
What Are General FHA Loan Limits for 2023?
The general FHA home loan limits for 2023 are as follows:
- $472,030 for single-family homes in most areas, $1,089,300 for single-family homes in high-cost areas, and $1,633,950 for single-family homes in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
- $604,400 for duplexes in most areas, $1,394,775 for duplexes in high-cost areas, and $2,092,150 for duplexes in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
- $730,525 for triplexes in most areas, $1,685,850 for triplexes in high-cost areas, and $2,528,775 for triplexes in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
- $907,900 for four-unit homes in most areas, $2,095,200 for four-unit homes in high-cost areas, and $3,142,800 for four-unit homes in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
Many Florida counties follow the same pricing structure and trends described above, though some differences exist. Those differences are almost always based on the average prices for homes in the same geographic area, though the national economy also plays a role.
FHA Loan Limits in Florida
FHA loan limits in Florida vary heavily by county and by property type. Generally, FHA mortgage lending limits are based on housing type and local housing cost. Here's a breakdown of a few examples of FHA loan limits based on Florida counties:
- Alachua County – $472,030 for single-family homes, $604,400 for duplex homes, and $730,525 for triplex homes
- Broward County – $557,750 for single-family homes, $714,000 for duplex homes, and $863,100 for triplex homes
- Clay County – $526,700 for single-family homes, $674,250 for duplex homes, and $815,050 for triplex homes
- Collier County – $672,750 for single-family homes, $861,250 for duplex homes, and $1,041,050 for triplex homes.
- Gadsden County – $472,030 for single-family homes, $604,400 for duplex homes, and $730,525 for triplex homes
- Hillsborough County – $472,030 for single-family homes, $604,400 for duplex homes, and $730,525 for triplex homes
- Jefferson County – $472,030 for single-family homes, $604,400 for duplex homes, and $730,525 for triplex homes
- Lee County – $472,030 for single-family homes, $604,400 for duplex homes, and $730,525 for triplex homes
- Manatee County – $506,600 for single-family homes, $647,750 for duplex homes, and $783,000 for triplex homes
- Miami-Dade County – $557,750 for single-family homes, $714,000 for duplex homes, and $863,100 for triplex homes
- Monroe County – $874,000 for single family homes, $1,118,900 for duplex homes, and $1,352,450 for triplex homes
- Orange County – $472,030 for single-family homes, $604,400 for duplex homes, and $730,525 for triplex homes
- Palm Beach County – $557,750 for single-family homes, $714,000 for duplex homes, and $863,100 for triplex homes.
Note that this list is not exhaustive. To discover the FHA loan limits for your Florida county or the county of a property you wish to purchase, check out the U.S. Department of Housing and Urban Development’s FHA mortgage limits page.
Depending on your preferences, you can search through different FHA loan limits by county, state, and county code.
How Do You Know Which Loan Limits You Qualify For?
Keep in mind that the loan amount you will qualify for will still be dependent on your personal financial standing. For example, if you are buying a single-family home in Miami-Dade County, the max loan amount you can get with an FHA loan will be $557,750. Whether or not you qualify for the max loan amount, will be determined based your credit score, income, and current debt obligations.
This is why a pre-approval is a crucial first step for any prospective home buyer, as it will help you understand your budget and purchasing power right from the start.
Generally, to qualify for an FHA loan, you will need the following:
(Keep in mind that requirements vary by lender)
- A credit score of 580 or more. A credit score of 580 will qualify you for a 3.5% down payment minimum.
- History of income and employment. Most FHA-approved lenders want records of stable employment and income over two years.
- A low debt-to-income ratio or DTI ratio. Your debt-to-income ratio determines how much of your monthly income will go to paying monthly debt. Lenders want to see a lower DTI to ensure you can afford a new mortgage. The good news is that FHA loans allow for higher debt-to-income ratios than conventional loans. Most FHA lenders will want to see a DTI ratio of 43% or less.
- Occupancy plans. Any home financed by an FHA loan must be your intended primary residence, not a secondary property, vacation property, or future rental property.
- Appraisal concerns. FHA-approved appraisers must assess the home's value and determine that it meets safety and habitability standards before it qualifies for loan underwriting.
If you already meet these qualifications, congratulations. You’ll probably be able to get an FHA loan quickly. If not, you may need to work on your financial attributes before applying for a new FHA loan in any Florida city or county.
Is an FHA Loan Right for Me?
As you can see, FHA loan limits can vary wildly depending on your county and the type of property you wish to purchase. Additionally, the actual amount you qualify for will depend on your current financial standing.
Not sure if an FHA loan is right for you? The good news is that with lenders like Vaster, you can explore all your home loan options at once and pair that with expert guidance to determine the best fit for you. Connect with a home loan expert today to get started on your pre-approval.
Sources:
Loans | U.S. Department of Housing and Urban Development
FHA Mortgage Limits | U.S. Department of Housing and Urban Development
What is a debt-to-income ratio? | Consumer Financial Protection Bureau
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