The Sunshine State was one of the epicenters of the housing boom and bust. Prices soared during a frenzy of speculation, then crashed during a long and painful correction. While the hangover still lingers, Florida's property market is solidly on the mend. Prices have risen, and state programs offer generous subsidies to first-time buyers in some parts of Florida. This page will guide you through the housing and mortgage market in Florida. Read on for a step-by-step guide to getting a mortgage in Florida.
Check Mortgage Rates in Florida
Your credit score is the most important factor in determining your interest rate, but factors unique to Florida also affect the mortgage market and how much you'll pay. Florida remains a major housing market, with no shortage of lenders vying for your business. However, the state's recent foreclosure debacle has left lenders chastened.
Because Florida is a so-called judicial foreclosure state, lenders are forced to slog through a lengthy legal process to take back a home. What's more, Florida's foreclosure rate long has been one of the highest in the nation. For more about financial forces affecting loans, see MoneyGeek's guide to mortgage rates.
First-Timer? Get Homebuying Help in Florida
Florida has one of the nation's most generous down-payment assistance programs for first-time buyers. As part of the Hardest Hit Fund, a federal program originally designed to bail out homeowners facing foreclosure, Florida gives buyers up to $15,000 for down payments and closing costs for eligible properties in Brevard, Duval, Hillsborough, Orange and Volusia counties. It's not available in the three counties with the biggest populations (Miami-Dade, Broward and Palm Beach), or in the high-priced counties of Collier and Monroe.
Hardest Hit Fund grants are treated as five-year loans, and the balance is forgiven at the rate of 20 percent a year. Limits on incomes and purchase prices vary by county. In Duval County, home of Jacksonville, a borrower must earn no more than $90,860 and buy a house costing no more than $364,457, more than two times the median home price in Duval County. To be eligible, an applicant must be a first-time buyer, defined as someone who hasn't been a homeowner in the past three years.
For homebuyers in Florida's other 62 counties, down payment assistance is less generous, but it's still available. The state provides up to $7,500 that must be repaid, but without interest.
Financial Assistance in Florida for First-Time Buyers
Check here for more information about low-interest loan programs, down payment assistance and other types of help:
Find a Housing Counselor in Florida
Understanding Home Affordability in Florida
Florida is such a large and diverse state that it's hard to generalize about affordability. The state is home to some of the world's most expensive real estate. In a telling example, Donald Drumpf once sold an oceanfront mansion in Palm Beach for $95 million.
However, Florida wages are below the national average and muddies the affordability picture. In Miami-Dade County, just 43.1 percent of homes sold in the fourth quarter of 2015 were affordable to a median-income family, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. That's based on a median home price of $235,000 for all homes and condos and a median family income of $50,065. But in the Orlando metro area, 65.2 percent of homes were affordable, based on a median price of $186,000 and median family income of $58,300.
How Florida Mortgage Rates and Home Prices Affect Monthly Payments
|Metro Area||Estimated Monthly Mortgage Payment*||Q1 2016 (Change from Previous Year)||2015 Median Home Price||2014||2013|
|Cape Coral-Fort Myers||$1,034||$220,118 (+8.70%)||$210,000||$180,700||$164,000|
|Crestview-Fort Walton Beach-Destin||$1,138||$242,050 (+3.00%)||$237,000||$225,000||$230,000|
|Deltona-Daytona Beach-Ormond Beach||$752||$159,968 (+15.50%)||$150,000||$136,000||$128,500|
|Lakeland-Winter Haven||$724||$153,988 (+12.40%)||$145,000||$132,500||$122,000|
|Miami-Fort Lauderdale-West Palm Beach||$1,347||$286,730 (+8.20%)||$280,000||$260,000||$246,500|
|Naples-Immokalee-Marco Island||$2,044||$434,910 (+9.00%)||$405,000||$370,000||$310,000|
|North Port-Sarasota-Bradenton||$1,171||$249,200 (+9.80%)||$235,400||$210,000||$198,000|
|Palm Bay-Melbourne-Titusville||$794||$169,013 (+16.40%)||$162,000||$137,000||$125,000|
|Panama City||$822||$174,930 (-2.00%)||$177,000||$170,000||$170,000|
|Pensacola-Ferry Pass-Brent||$752||$159,936 (+8.80%)||$157,500||$149,900||$150,000|
|Port St. Lucie||$917||$195,030 (+18.20%)||$178,000||$150,000||$135,000|
|Punta Gorda||$846||$180,000 (+12.50%)||$168,000||$147,000||$139,900|
|Sebastian-Vero Beach||$871||$185,295 (+12.30%)||$181,000||$160,000||$155,000|
|Tampa-St. Petersburg-Clearwater||$846||$179,922 (+14.60%)||$173,000||$157,500||$150,000|
Source: National Association of Realtors Q1 2016 Metropolitan Median Area Prices and Affordability report.
*Estimated Monthly Mortgage Payment is based on median home prices for the metro area in Q1 2016 and a 30-year fixed mortgage with today's rates.
Determine How Much You Can Borrow in Florida
Florida is home to 67 counties, and only two have federal loan limits above $417,000 for 2016. The loan limit in Monroe County, home of Key West, is $529,000. In Collier County, where Naples is located, the loan limit is $448,500. That means borrowers in those two counties can get "conforming" loans up to those amounts. In the rest of Florida, if you hope to borrow more than $417,000, you'll need a jumbo loan. Conforming loans generally offer consumers more choices and more flexibility, so the higher the limit, the better for borrowers. The following table lets you search for conventional and FHA loan limits by county in Florida.
Tips for Florida Buyers: Experts Weigh In
Deb Holloway Loan officer, Shelter
Mortgage Deb Holloway is a veteran loan officer who works at Shelter Mortgage in Melbourne.
Jim Flood Regional manager, Supreme Lending Jim Flood is regional manager at Supreme Lending in Plantation. He has been in the mortgage business in South Florida for more than 25 years.
Jaimie Ross President, Florida Housing Coalition Jaimie Ross is president of the Florida Housing Coalition, a nonprofit organization based in Tallahassee that advocates for affordable housing.
Florida's housing market has seen boom and bust in the past decade. What's happening now?
It certainly has become a seller's market. For buyers, that means sellers are less willing to pay closings costs, which can be a challenge for first-time buyers. We see multiple offers on many properties. That underscores that you really do need to get pre-qualified and pre-approved for a mortgage.
We went all the way up and all the way down. Now, we've recovered. We are clearly making quality credit decisions now, really scrubbing people's finances and tax returns.
What advice would you give to first-time buyers?
So many times, folks may think they're very well qualified - they checked their score on a consumer site like CreditKarma. But the FICO score the industry uses shows something else, and that could really complicate the process. Everything is so Internet-based these days, and buyers try to pre-qualify themselves. My advice is to speak with somebody who does this for a living.
Save your money, maybe pay some things off before you enter into homeownership. Make sure you clean up your credit. Then, reach out to get pre-qualified. Make sure you're doing something that makes sense - don't stretch too far. You don't want to be worried you don't have enough money if the air conditioner breaks.
What's the biggest challenge buyers face?
We're getting away from the mortgage meltdown, and a lot of buyers who are coming back into the market have foreclosures or short sales. We're running into some troubles with timeframes. For an FHA loan, for instance, there's a three-year window. People think it's three years from the date of the closing, but it's really three years from the date the deed was recorded in the public record. It's very important that you work with a lender who is very aware of all those details.
The negotiations can be a challenge. Buyers might have to overbid, or they might make a bid and not hear back for a day. Maybe you're competing against an all-cash offer. Florida leads the nation in cash offers.
We have so many areas that are international destinations, and we have so much wealth driving home prices up. We're a peninsula, and it's beautiful, but for folks in low-income categories, there's not enough housing stock available in their price ranges.
What's unique about Florida's housing market?
We have a lot of buyers buying second homes in Florida that they'll eventually retire to. You also have a lot of folks transferring in for jobs. The economy is really coming back.
There is a huge demand for real estate in Florida. Everybody wants to come here. Aside from that, we don't have a state income tax, so it's a great place to retire.
We have the State Housing Initiatives Program, which is really unique in the country. We have a dedicated revenue source for affordable housing in Florida. It's a tremendous asset. Because of the recession, money was not being appropriated to housing, but over $200 million was appropriated for affordable housing in 2016-17.
Don't Forget Florida Closing Costs
Closing costs in Florida rank in the middle of the pack among states, according to Bankrate's survey of closing costs in 2015. A borrower taking a $200,000 mortgage will pay an average of $1,806 in origination fees and third-party fees. However, Bankrate's estimate doesn't include Florida's documentary stamp tax, which is collected on mortgages at a rate of 0.35 percent, or the intangibles tax of 0.2 percent. Together, they would add $1,100 to the total tab due at closing.
Also to make up for the lack of a state income tax, Florida collects higher taxes on mortgages than most states. See MoneyGeek's guide to closing costs for a full accounting of what to expect.
Average Closing Costs in the Sunshine State
Your closing costs will vary depending on the lender you choose and where you live, but here's an idea of what you might expect to pay.
Source: Bankrate's 2015 survey of closing costs.
Refinancing a Home Loan in Florida
Since Florida doesn't have a state income tax, which is good news every April 15, the state makes up for that fiscal gap with a documentary stamp tax on mortgages at a rate of 0.35 percent and an intangibles tax of 0.2 percent. Those two taxes can create sticker shock when you close on a mortgage so you might not refinance as freely here as in other states. However, the additional cost probably isn't enough of a hit to kill a refinancing. With rates near historic lows, it still can make sense to refinance a mortgage. Soaring home prices have positioned many owners for refinancing. The state's home values jumped 53.3 percent from early 2011 to early 2016, well above the national appreciation rate of 27.2 percent, according to the Federal Housing Finance Agency's home price index.
Still, Florida's gravity-defying boom and deep bust also mean some homeowners remain underwater. At the end of 2015, 13.7 percent of South Florida homeowners were upside down on their mortgages, compared to 13.1 percent of borrowers nationally, according to Zillow. Owing more than your house is worth can complicate refinancing.
A glut of condos and many apartment foreclosures during the real estate bust also forced Fannie Mae and Freddie Mac to tighten lending guidelines for condos, and the Federal Housing Administration now rarely makes condo loans. As a result, condo sales are mostly for cash. "FHA is virtually out of the condo market," says Bob Clinton, vice president of residential lending at Regent Bank in Boca Raton. For more information about refis, see MoneyGeek's guide to refinancing your mortgage.
Other Resources for Florida Borrowers
This state tool lets you search by Florida county and by the number of people in your household.
This federal program is the source of the generous down payment assistance offered in five Florida counties. First-time buyers can get up to $15,000 in down payment assistance.
Created by the state Legislature to focus on affordable housing, this organization administers Florida's down-payment assistance programs.
This nonprofit provides buyers in Miami-Dade County with down payment assistance worth up to $30,000.
This HUD-approved nonprofit hosts homebuyer education courses and helps homeowners facing foreclosure.
This Orlando nonprofit offers counseling and education.
This nonprofit offers down payment assistance that's worth as much as $35,000 for buyers in the city of Largo, up to $14,000 in Clearwater, and up to $10,000 in unincorporated Pinellas County.
The Jacksonville nonprofit provides buyers with up to $15,000 in down payment assistance on qualified properties.