FHA Vs Conventional Loans

• FHA mortgages are insured by the federal government, even though they are issued by private mortgage lenders. Because they are backed by the government, lenders are more willing to take on riskier borrowers (poor credit, low down payment). FHA loans have limits. In Broward county, the limit is $621,000 for a single family property and the minimum credit score is 500, although a credit score of 580 will get you accepted by more lenders.

• Conventional loans are not backed by a governmental agency. They are the most popular type of mortgage. They typically cost less than FHA loans, but the requirements to qualify can be more stringent. They often require good credit and a stronger down payment. They come in two flavors: conforming and non-conforming.
  • Conforming loans have limits and other rules set by the federal government and by Fannie Mae and Freddie Mac. In Broward county, the conforming loan limit is set at $766,550.
  • Non-conforming loans are mortgages that don’t meet the Fannie and Freddie guidelines. They can include jumbo loans that are above the maximum amounts mentioned above, and may also include loans for borrowers with poor credit or with irregular income.

If you want to elevate your real estate experience and be served with the level of luxury you have come to expect, please contact me. I’d be happy to become your partner in the process.