Who this is for
FHA loans are insured by the Federal Housing Administration and built for buyers who don't quite fit conventional yet: lower credit scores, limited savings, or past credit events that have had time to season (a late payment a couple of years back, a resolved collection, a discharged bankruptcy).
It's a primary-residence-only program - you have to move in within 60 days of closing and live there for at least a year. No second homes, no investment property. A qualified future buyer can assume the loan with the servicer's approval.
What you actually need to qualify
- Citizenship or residency: U.S. citizens and lawful permanent residents (green card holders) are eligible. Since May 25, 2025, non-permanent residents are not eligible for new FHA loans, including Streamline refinances (HUD Mortgagee Letter 2025-09). Non-permanent residents can look at conventional or non-QM options instead.
- Credit score: HUD allows 580 and up for FHA's maximum financing, and 500-579 with a larger down payment. Many lenders set a higher minimum of their own (an "overlay"), so the lender choice matters.
- Down payment: Low minimum, and it can come entirely from an acceptable gift (for example, from family).
- Debt-to-income (DTI): Manually underwritten loans start at 31% housing / 43% total debt and can go higher with documented compensating factors such as reserves or residual income. Loans approved through FHA's automated TOTAL Scorecard can go higher than that.
- Employment: Two years of work history, explained gaps, and it doesn't have to be the same job.
- Property condition: The home has to meet HUD's minimum property requirements. The appraiser flags safety, security and soundness issues that must 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: a one-time premium based on the loan amount, usually financed into the loan at closing.
- Annual MIP: a yearly premium based on the loan balance, paid monthly with your mortgage.
And here's the part most people don't know: with FHA's minimum down payment, annual MIP stays for the life of the loan. Only loans that start with a larger down payment (one that meets HUD's loan-to-value threshold) see annual MIP end, and then only after 11 years. You can't hit 80% LTV and request removal the way you can with conventional PMI. The usual way out is refinancing into a conventional loan once you have the equity and credit to qualify.
FHA loan limits in Florida
FHA limits are different from conventional limits and are set by county. For 2026, HUD's single-family floor is $541,287 and the high-cost ceiling is $1,249,125 (HUD Mortgagee Letter 2025-23). Most Florida counties sit at the floor. A few higher-cost counties have higher limits. Look up your county on HUD's FHA limit lookup. Limits are reset each calendar year.
If your loan amount would exceed the county limit, you'll need a larger down payment or a conventional or jumbo loan instead. Check the limit before you make an 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 approval is its own hurdle. The condo project has to be on FHA's approved list, or the unit has to qualify for FHA single-unit approval. Many older Florida condos are not approved. Florida's milestone inspection and structural integrity reserve study (SIRS) rules for buildings three stories and up (F.S. 553.899, 718.112) can also bring special assessments, so check the HUD condo list and the association's reports before you fall in love with a unit.
- Older homes get scrutinized. The FHA appraisal flags defective paint (a lead concern in pre-1978 homes), exposed wiring, a roof near the end of its life, broken windows and similar safety issues. Sellers sometimes won't fix these for an FHA buyer - factor that into your offer.
- Roof age and insurability matter. Many Florida insurers won't write a policy on an older roof. If the roof is questionable, the deal can hinge on a roof replacement before closing.
Common FHA scenarios
Limited savings, fair credit
Classic FHA. A small down payment, mostly covered by a gift from family. The MIP cost is real, but so is getting into a house.
Bankruptcy seasoned 2+ years
FHA allows a Chapter 7 bankruptcy 2 years after discharge with re-established credit. A Chapter 13 can qualify after 12 months of on-time plan payments with the trustee's permission. Conventional generally waits 4 years after a Chapter 7 discharge.
Strong income, lower score
If income is solid but credit is still recovering, FHA's credit flexibility can be the better fit today. Refinancing to conventional later, once the score and equity are there, can remove mortgage insurance.
Already have FHA
Existing FHA loans can use an FHA Streamline refinance - usually no appraisal and reduced documentation. The current loan needs at least 210 days and 6 payments of seasoning, and the refinance has to give you a net tangible benefit under HUD's rules.
When FHA isn't the move
- Strong credit and stable income - conventional's removable PMI usually makes it worth comparing first.
- You're VA-eligible - VA has no monthly mortgage insurance. Look at VA first if you have the entitlement.
- You're not a U.S. citizen or permanent resident - non-permanent residents are no longer FHA-eligible. Look at conventional or non-QM.
- 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) can cost less per month than FHA for some borrowers. Worth a side-by-side.