What government program is the better mortgage option to purchase a home in Florida? That is the question that many Florida first time home buyers ask. A quick search online will give you a general view of what the majority prefer and this includes real estate agents and brokers alike. All of them virtually go for the USDA mortgage. The table below shows us the primary reasons why this is so. Note that all the information has been verified as up-to-date.
0% – None
YES -per county,etc
Below you will find a comparison on a $200,000 purchase home price with USDA versus FHA.
There are a few other points that put the USDA at an advantage over the FHA mortgage program such as the appraisal value. USDA appraisal value is normally higher than the selling price. If the appraisal value is more than the purchase price, this becomes an additional advantage for borrowers as the USDA will permit you to roll in closing costs.
Essentially the only issues that could be considered as drawbacks of the USDA loan are the restriction of location and the USDA RD income limits. The location must be in a designated rural area with a total population of 20,000. This can be a setback for those who do not want to drive farther to get to work in the city. But buyers should check their location in detail, please click here for the USDA housing map. Many populated locations just outside of the big cities are USDA rural housing approved – locations just outside of Tampa, Gainesville, Tallahassee, Pensacola, Sarasota, Jacksonville, and Orlando FL.
Additionally, the USDA‘s income limit imposed on would-be borrowers is currently set at 115% of the median or average income of the area where your home is to be situated. That means for those who have a higher income than the average in town would have to opt for mortgage loans under the FHA or through a conventional lender if they so decide to live in a rural area.
Regarding the rates as well as the guidelines in qualifying potential borrowers, the FHA and USDA are just about equally matched and they are currently at historic low rates. However, the USDA (unlike the FHA) allows borrowers to finance the whole purchase price and include any closing expenses as well into the loan.
Lastly, all USDA guaranteed loans have a 30-year fixed rate term. This can be very advantageous mainly when the homeowner eventually starts earning more than the required 115% median, the rate is fixed and even after 10 years only, will practically be insignificant compared to other monthly expenses at this time.
The funding fee in both government-backed programs is incorporated (rolled into) into the overall loan.
Questions? Please reach out to us at 800-743-7556 or just submit the quick request form on the right side of this page >> Please visit www.UsdaMortgageSource.com for all the latest program information.