Who this is for
FHA loans are insured by the Federal Housing Administration and built for buyers who don't quite fit conventional yet. The qualifying audience: credit scores in the 580-660 range, limited savings, or recent credit events (a late payment two years ago, a collection that's been resolved, a bankruptcy that's seasoned).
It's a primary-residence-only program — you have to occupy the home. No second homes, no investment property. The loan can be assumed by a future buyer, which becomes interesting when rates are high.
What you actually need to qualify
- Credit score: 580 minimum for the 3.5% down option. 500-579 still qualifies but requires 10% down. Most lenders overlay to 580 or even 620 in practice — we shop overlays carefully.
- Down payment: 3.5% of the purchase price. Can be 100% gift funds from family.
- Debt-to-income (DTI): Generally 43% back-end, but up to 50-57% with strong compensating factors (residual income, reserves, strong credit despite the score).
- Employment: Two years of work history, but doesn't have to be the same job. Job changes within the same field are fine.
- Property condition: The home itself has to meet HUD's minimum property standards. The appraiser flags safety and structural issues that have to be fixed before closing — this matters a lot in older Florida housing stock.
The cost: MIP isn't PMI
This is the part most articles gloss over. FHA charges mortgage insurance premium (MIP) two ways:
- Upfront MIP: 1.75% of the loan amount, financed into the loan at closing. On a $400,000 loan, that's $7,000 added to your balance.
- Annual MIP: 0.55% of the loan balance, paid monthly. On the same $400,000 loan, that's about $183/month.
And here's the kicker most people don't know: annual MIP stays for the life of the loan if you put less than 10% down. You can't just hit 80% LTV and request removal like with conventional PMI. The way out is refinancing into a conventional loan once you have the equity and credit to qualify — which is a real strategy, not a trap.
FHA loan limits in Florida
FHA limits are different from conventional limits and vary by county. For most of Florida in 2026, the FHA limit on a single-family home is around the standard floor (~$524,225). High-cost counties — Miami-Dade, Broward, Palm Beach, Monroe, Collier — have higher limits, sometimes substantially so, reflecting their median home prices.
If your purchase price exceeds the FHA limit in the county, you'll need to bring more cash to the table or look at conventional/jumbo. We pull the limit before you offer.
Florida-specific notes
- Insurance still applies the same way. Florida's high homeowners insurance premiums hit FHA buyers just as hard — sometimes harder, since lower down payments mean less cushion in your monthly budget. Get the insurance quote early.
- Condo approvals are stricter than conventional. The condo project has to be on FHA's approved list (or qualify for single-unit approval). Many older Florida condos aren't, especially post-Surfside, so check before you fall in love with a unit.
- Older homes get scrutinized. The FHA appraisal flags chipping paint (lead concern in pre-1978 homes), exposed wiring, roof life under 2-3 years, broken windows, missing handrails. Sellers sometimes won't fix these for an FHA buyer — which is something to factor into your offer.
- Hurricane shutters and roof age matter. Many Florida insurers won't write a policy on a roof over 15-20 years old. If the roof is questionable, the deal can hinge on a roof replacement before closing.
Common FHA scenarios
Limited savings, 620 credit
Classic FHA. 3.5% down, gift from parents covers most of it, and lender overlays don't bite at 620. The MIP cost is real but so is getting into a house.
Bankruptcy seasoned 2+ years
FHA allows Ch.7 BK with 2 years of clean rebuild credit (1 year for Ch.13 in repayment). Conventional requires 4 years. The flexibility is the whole point.
Strong income, low score
If income is solid but credit is mid-600s, FHA usually beats conventional pricing in that score band. We refinance to conventional later once the score recovers.
Already have FHA
Existing FHA loans can refinance via FHA Streamline — no appraisal, minimal docs, just a rate-and-term improvement. Worth checking when rates drop 0.5%+.
When FHA isn't the move
- Credit is 700+ with stable income — conventional pricing and removable PMI almost always wins.
- You're VA-eligible — 0% down, no PMI, often better rates. Always price VA first if you have the entitlement.
- You're buying a non-FHA-approved condo — pivoting to conventional or single-unit FHA approval is an option, but it adds complication.
- You're buying investment property — FHA is owner-occupied only. Look at conventional or DSCR.
- You're under area median income — HomeReady (Fannie) at 3% down often beats FHA on monthly cost. Worth a side-by-side.