Miami, Orlando, Tampa, and Palm Beach, FL might catch people’s attention but did you know that Jefferson County, FL is 100% rural as is Lafayette County? In these counties, you can get a USDA loan to buy a home with favorable terms and low-interest rates. More than 80% of the State of Florida qualifies as a rural area, which means you can buy a home in these locations with USDA funding, whether you are a first-time home buyer or not.
The USDA loan program offers many benefits for homebuyers in Florida With 100% financing, no monthly mortgage insurance, and relaxed credit requirements, it’s an excellent option for affordable homeownership. However, there are specific eligibility rules you must meet to qualify for a USDA loan in Florida This comprehensive guide covers everything you need to know about the requirements.
Overview of USDA Loans
The United States Department of Agriculture (USDA) guarantees mortgage loans in rural and suburban areas across the country. These government-backed loans have lenient standards, making them more accessible for low-to-moderate income homebuyers.
USDA loans offer
- 100% financing – no down payment required
- Below market interest rates
- No monthly mortgage insurance payments
- Flexible credit score requirements
You can use a USDA loan to purchase or construct a home in designated rural and suburban neighborhoods. The financing can also be used to improve or renovate an existing property.
Florida USDA Loan Limits
The maximum loan amount you can borrow depends on which county you buy in. USDA loan limits for Florida counties range between $289,159 and $435,000. High-cost areas like Miami-Dade have higher caps. Low-cost rural counties have lower limits.
You can look up the exact loan limits for any Florida county using this USDA tool Just enter the address or county name to see the limit
Florida USDA Income Limits
In addition to purchasing in an eligible area, you must meet USDA income thresholds. The program assists low-to-moderate income borrowers who may not qualify for conventional mortgages.
The table below shows the current income limits based on family size for Florida:
| Household Size | Maximum Income |
|---|---|
| 1 Person | $43,750 |
| 2 People | $50,000 |
| 3 People | $56,250 |
| 4 People | $62,500 |
| 5 People | $67,700 |
| 6 People | $72,900 |
| 7 People | $78,100 |
| 8 People | $83,300 |
USDA uses your adjusted gross income to determine eligibility. This includes wages, salaries, self-employment income, and other sources. You can qualify even if you have nontaxable income from Social Security, disability, or other programs.
Florida USDA Credit Requirements
To get approved, you’ll need a minimum credit score of 640. The USDA does not have a specific debt-to-income ratio (DTI) limit, but most lenders require 41% or less.
Here are some other key credit standards:
- Minimum 3 trade lines – You must have at least three established credit accounts like credit cards, auto loans, or mortgages.
- 2 years of credit history – Your credit reports should show activity for the last 24 months. Large gaps could make approval difficult.
- Limited derogatory marks – Minor issues like single late payments are acceptable. But bankruptcies within the last 36 months disqualify you.
While a score of 640 is the minimum, it’s recommended you have a 660 FICO or higher for the best USDA rates. The higher your score, the lower your interest rate.
Florida USDA Employment History
Lenders want to see stable income sources to make sure you can afford the mortgage long-term. At a minimum, you must show:
- 2 years of work history – The USDA requires two years of steady employment in the same line of work or field.
- 6 months on current job – You need to be employed at your current position for at least six months. Self-employment must be in business for two years.
Having gaps in employment or frequently changing jobs can jeopardize your approval chances. Provide an explanation for any employment gaps. Part-time, seasonal, commission-based, and self-employment income all may qualify.
How to Apply for a USDA Loan in Florida
Ready to move forward? Here are the steps to take when applying for a USDA mortgage in Florida:
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Check eligibility – Use the USDAIncome and Property Eligibility tool to confirm you meet the requirements.
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Get pre-qualified – Work with a USDA approved lender to get a pre-approval letter. This shows sellers you are a serious buyer.
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Find a home – Search for homes within your affordable price range in USDA eligible areas.
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Make an offer – Submit an offer and negotiate a purchase agreement with the seller.
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Complete loan application – Work with your lender to complete the full mortgage application and submit documentation.
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Home appraisal – The lender will order an appraisal to confirm the home’s value.
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Close on home – Finalize the legal paperwork, then get the keys to your new home!
The entire process usually takes 30-60 days from start to close. Rates are still near historic lows, so now is an excellent time to explore USDA financing. Reach out to a recommended lender to start the pre-approval process.
USDA Refinancing in Florida
The USDA also offers streamline refinancing options if you already have a USDA loan. You may be able to lower your interest rate or switch into a fixed-rate mortgage without a full application. Refinancing can only be done with an existing USDA-guaranteed mortgage. You cannot refinance a conventional loan into a USDA product.
Alternatives if You Don’t Qualify for USDA
The USDA has more flexible standards than conventional loans. But if you still don’t qualify, here are two alternatives to consider:
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FHA loans – Require just a 580 FICO and 3.5% down payment. More lenient with past credit issues.
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VA loans – No minimum score or down payment for qualified veterans and military members.
Both FHA and VA loans permit gifts or grants for your down payment. And you can still get a competitive interest rate with low mortgage insurance.
Work With a USDA Specialist
The USDA home loan program opens up affordable financing to millions of buyers in Florida. Be sure you understand all the latest requirements before applying. For personalized guidance and expert advice, contact a USDA loan officer today!
Closing costs are included in the mortgage
Often, closing costs can accumulate up to 6% of the home’s value. With USDA RD home loans, these can be rolled into the mortgage. Many borrowers struggle to save up enough money for the closing costs, so a USDA home loan gives them less financial stress.
Benefits of a USDA Housing Loan in Florida
Bearing in mind how expensive housing has become across the United States, USDA family housing programs are a gateway to more affordable monthly payments.
Farmers, in particular, can make the most of this rural housing service as they can buy homes near their field property and boost their living standards. Retirees and people working from home can also benefit from a USDA loan and enjoy living close to nature but only a short drive away to visit a larger city.
While bustling cities often catch people’s attention, many designated rural areas are located close to Florida cities. You can purchase a home in a semi-rural RD area and be within driving distance of restaurants and entertainment.
USDA loans are secured by the U.S. Government — specifically by the U.S. Department of Agriculture. As a result, they come with lower interest rates. As interest rates increase the overall amount of money you pay for your mortgage, lower rates mean more money left in your pocket.
Also, USDA interest rates are fixed. This helps homeowners budget their monthly expenses in a predictable way. There are no surprise rate increases.
5 Things You Need to Know About USDA loans
FAQ
Is FHA better than USDA?
What cities in Florida are USDA approved?
What are the DTI limits for USDA loans in 2024?
Do USDA loans have PMI?
What are USDA loan requirements?
USDA loan requirements mainly focus on the home loan applicant and the property. First off, the home must be located in an approved rural areas to be considered eligible for USDA financing. Second off, the home buyer must meet all income requirements set forth by USDA.
What is a USDA loan in Florida?
The USDA Loan in Florida is a popular program given many locations are eligible. The Rural Housing Loan can be challenging to qualify for, but offers more competitive interest rates, no money down and low mortgage insurance compared to Conventional Mortgages and FHA Loans in Florida.
How do I qualify for a USDA loan in Florida?
To qualify for a Florida USDA loan, you must have a FICO score of at least 640 and a debt-to-income ratio of 41% or less. You’ll also need to show two years of employment history and at least six months at your current job. Not sure if you’ll make the cut? Contact us today to be connected with an expert Mortgage Coach.
What is the maximum loan amount for USDA Rural Home Loans in FL?
Maximum Loan Amount: There’s no set maximum loan amount for USDA rural home loans in FL. Instead, your debt-to-income ratios dictate how much home your can afford (29/41 ratios). Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area.