Known for its sandy beaches and warm tropical climate, the southern part of Florida is a vacation destination for many. It is home to counties like Broward County, Monroe County and Miami-Dade, where the famous city of Miami is located. But South Florida is not only a suitable tourist destination. There are many beautiful and lush residential neighborhoods where you could create wonderful memories for a lifetime.

Besides the many beaches and easy access to the ocean, South Florida offers a lot of recreational activities, with its thriving nightlife, art and culture in cities like Fort Lauderdale and Miami. Most neighborhoods in South Florida are cosmopolitan. The diversity in culture makes living there a wholesome experience with opportunities to try out a variety of cuisines. Whether you choose to live in Aventura, Hallandale, Miami Beach or Weston, there will be something exciting to do.

The prices of homes in South Florida have increased over time, however, with the rise in demand for homes. For instance, the median home price in Broward County for a single-family home in November 2021, according to Miami Realtors Association, was $485,000. This represents a 14.1% increase from 2020. Although this amount might seem a little high for most people, it is still possible to buy a home in South Florida for little to no money down through government loans.

These loans are guaranteed by the Federal Housing Administration (FHA), the U.S. Department of Agriculture (USDA), and the Department of Veterans Affairs (VA). That the government insures part of these loans protects lenders from financial loss if the borrower defaults on their loan payments. As a result, lenders are more lenient with their eligibility requirements and offer some great incentives.

FHA Home Loans

Loans guaranteed by the FHA have some of the most lenient eligibility requirements out of any government loans available. This makes them perfect for first-time homebuyers who do not have the best credit scores or the most disposable income. Qualifying for these loans is simple. All the applicant needs to do is:

  • Make a down payment of 3.5%.

  • Have a credit score of at least 580, although some lenders will accept credit scores as low as 500 with a higher down payment.

  • Have a steady employment history.

  • Have a valid social security number, and be a lawful resident of the United States.

  • Income should be so that mortgage payments are less than 31% of monthly income, and total debt is less than 43% of monthly income.

Upon meeting these eligibility requirements, the borrower can apply for a FHA home loan and enjoy significant benefits. These include lower closing costs, lower monthly mortgage costs, and the ability to finance repairs and upgrades to the property.

There are certain limitations that FHA loans have, and those are loan limits that vary depending on the county. For counties in South Florida, those loan limits are:

 

Single-familyDuplex. Triplex. Fourplex. Monroe

$608,350. $778,800. $941,400. $1,169,900

Miami-Dade

$402,500. $515,250. $590,800. $734,250

Broward

$402,500. $515,250. $622,850. $774,050

Palm Beach

$402,500. $515,250. $622,850. $774,050

 

USDA Home Loans      

Loans that are guaranteed by the USDA are meant for applicants who are low-income earners. This loan is intended for applicants who want to purchase a modest single-family home for little to no money down in a rural community.

Once property eligibility is determined, applicants will enjoy some benefits offered by USDA loans, which are:

§  $0 down payment requirement.

§  Competitive interest rates.

§  Lower closing costs.

§  Low mortgage insurance payments.

To be eligible for these loans, the applicant must be a U.S. Citizen, have a credit score of 640, and have a stable and dependable income. However, just like the FHA loans, USDA home loans are subject to loan limits. In South Florida, it’s $299,000 for Palm County and $441,600 for Monroe County.

VA Home Loans

VA home loans are exclusive to Veterans and Active Duty Service Members, although they can also be used by spouses of deceased Veterans as long as they meet the eligibility requirements. These loans are considered by many in real estate as the best government loans to use when purchasing a home.  

This is mostly due to their many benefits, which include:

  • $0 down payment options.

  • Lower monthly mortgage payments.

  • Low interest rates.

  • No mortgage insurance premiums.

  • No prepayment penalties.

  • Allows for the funding fee to be rolled up into the loan.

Effective January 1st, 2020, VA home loans are no longer subject to VA loan limits. This means that applicants can now purchase a home anywhere in the country as long as they can afford it.

However, the removal of loan limits is only for first-time borrowers. Those with over one active VA loan still need to adhere to county loan limits, which is $608,350 for Monroe County, and $548,250 for the other counties.

There You Have It   

Supposing you’ve wanted to live in places full of exciting events and unique recreational opportunities, it is entirely possible with the listed government-guaranteed home loans. They’re not only easier to access but also way more affordable compared to most conventional loans.

Phil Georgiades is the CLS for FedHomeloan.org, a government-sponsored lender specializing in first-time homebuyer home loans. He has been a practicing real estate professional for 22 years.   



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