Down Payment and Limits

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FLORIDA REAL ESTATE SALES ASSOCIATE COURSE

Types of mortgages

Section 28 of 72

One of the most attractive features of an FHA loan is the low down payment requirement. Currently, a borrower with a qualifying credit score can purchase a home with a down payment as low as 3.5% of the purchase price or appraised value. However, the FHA sets a maximum loan limit, which varies by county to reflect the local cost of living; buyers looking at luxury properties will usually exceed this cap and need a different type of loan. Before a loan closes, the FHA issues a conditional commitment to the lender, agreeing to insure the specific loan provided all conditions are met.