Complete FHA Loan Guide
Written by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
An FHA loan is a government-backed mortgage that lets Florida buyers purchase a home with as little as 3.5% down and a credit score as low as 580. Because the Federal Housing Administration insures the loan, lenders take on less risk and can approve borrowers who would struggle to qualify for conventional financing.
This guide walks through every part of an FHA loan in Florida: who qualifies, what it costs, how mortgage insurance works, and how to move from pre-approval to closing. It is written by our licensed team at Mortgage Capital, NMLS# 1859012, and reflects how FHA loans actually close across all 67 Florida counties.
How FHA loans work in Florida
The FHA does not lend money directly. Instead, it insures loans made by approved lenders, reimbursing them if a borrower defaults. That insurance is what lets a lender accept a 3.5% down payment and a 580 score on a primary residence.
FHA loans are limited to owner-occupied homes, so you cannot use one for a pure investment property. You must move in within 60 days and live there as your main residence. The home also has to meet FHA's minimum property standards, which the appraisal checks.
Credit score and down payment requirements
With a 580 or higher FICO score, you can put down just 3.5%. Between 500 and 579, FHA technically allows financing with 10% down, though most lenders set their own floor higher. We help borrowers in the 580 to 620 range who are often turned away elsewhere.
The down payment can come from your own savings, a documented gift from family, or a Florida down payment assistance program such as Florida Hometown Heroes. Lenders verify the source, so deposits need a clear paper trail.
FHA mortgage insurance explained
FHA loans carry two mortgage insurance charges. The upfront premium is 1.75% of the loan amount, usually financed into the balance. The annual premium, paid monthly, runs around 0.55% for most 30-year loans with the minimum down payment.
On loans with less than 10% down, the annual premium lasts the life of the loan. Many Florida buyers use FHA to get in the door, then refinance into a conventional loan once they reach 20% equity to drop mortgage insurance entirely.
FHA loan limits and eligible properties
FHA loan limits vary by county. In most Florida counties the 2026 limit sits at the national floor, while higher-cost areas like Monroe County (the Keys) carry larger limits. We confirm the exact ceiling for your county before you shop.
Eligible properties include single-family homes, FHA-approved condos, townhomes, and two-to-four-unit buildings if you live in one unit. Condos must be on the FHA approved list or qualify through single-unit approval.
Costs beyond the down payment
Plan for closing costs of roughly 2% to 5% of the price, covering lender fees, title insurance, the appraisal, and Florida documentary stamp taxes. Sellers can contribute up to 6% of the price toward your closing costs on an FHA loan, which is a powerful negotiating tool.
You will also prepay items like the first year of homeowners insurance and several months of property taxes into an escrow account. In coastal Florida, budget carefully for insurance, which can be a large line item.
Complete FHA Loan Guide: step by step
Frequently asked questions
What credit score do I need for an FHA loan in Florida?
You need a 580 score for the 3.5% down payment option. Scores from 500 to 579 may qualify with 10% down, though lender overlays often set a higher floor.
How much is the down payment on an FHA loan?
The minimum is 3.5% of the purchase price for borrowers with a 580 or higher score. On a $300,000 home that is $10,500.
Can I use gift money for an FHA down payment?
Yes. The entire down payment can be a documented gift from a family member, with a signed gift letter and proof of the transfer.
Does FHA mortgage insurance ever go away?
On loans with less than 10% down it lasts the life of the loan. Most buyers refinance into a conventional loan once they have 20% equity to remove it.
Can I buy a condo with an FHA loan?
Yes, if the condo is FHA-approved or qualifies through single-unit approval. We check the project's status before you make an offer.
How long does an FHA loan take to close in Florida?
Most FHA purchases close in 30 to 45 days, depending on the appraisal, title work, and how quickly conditions are cleared.
Can the seller pay my closing costs on an FHA loan?
Yes. Sellers can contribute up to 6% of the purchase price toward your closing costs and prepaids, which can dramatically cut your cash to close.
Can I get an FHA loan after a bankruptcy or foreclosure?
Often yes. FHA generally requires two years after a Chapter 7 bankruptcy and three years after a foreclosure, with re-established credit.