Current Florida <span class='t-red'>FHA</span><span class='t-red'>Mortgage</span><span class='t-red'>Rates</span>

By Shahram Sondi


If you’re thinking about snagging a 30-year fixed-rate FHA mortgage (which is a pretty common mortgage, especially for first-time homebuyers), my rates are hard to beat. Whether you’re just starting to shop for a home loan or you’re ready to get pre-approved, I’ll give you all your FHA mortgage options, including no closing cost options depending on market rate conditions and your particular scenario.

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FHA 30-year Fixed Mortgage: The Lowdown

An FHA 30-year fixed rate mortgage is a type of home loan offered by the Federal Housing Administration (FHA) with a fixed interest rate and a 30-year repayment term. Here are some key features and details about a 30-year fixed FHA mortgage:

  1. Term Length:
    • The loan has a fixed loan term of 30 years, meaning you have 360 equal monthly payments over the life of the loan.
  2. Fixed Interest Rate:
    • Unlike those wild Adjustable-Rate Mortgages, the interest rate on a 30-year fixed FHA loan remains constant throughout the entire repayment period.
    • Having a fixed interest rate keeps your monthly payments predictable and stable, making it easier for borrowers to budget.
  3. Down Payment:
    • FHA loans are known for their relatively low down payment requirements. The minimum down payment for an FHA loan is 3.5% of the home’s purchase price.
    • It’s important to note that the down payment can be a gift from a relative, employer, or charitable organization.
    • If your credit score is below 580, you might need a 10% down payment.
  4. Debt-to-Income Ratio (DTI):
    • Your debt-to-income ratio, which includes your monthly housing costs and other debts, should generally be 43% or lower. That said, depending on your credit score and cash reserves, some borrowers can still qualify with a DTI as high as 504.9%.
  5. Credit Score Requirements:
    • FHA loans are designed to be accessible to borrowers with lower credit scores than conventional loans. While the minimum credit score requirement is generally 500, a higher credit score may qualify you for better terms.
    • Lenders may have their own credit score requirements, so it’s advisable to check with the specific lender.
  6. Mortgage Insurance Premiums (MIP):
    • FHA loans require borrowers to pay mortgage insurance premiums (MIP). This insurance protects the lender in case the borrower defaults on the loan.
    • MIP is paid both upfront at closing and as an annual premium, which is divided into monthly payments.
  7. Property Requirements:
    • The property being financed with an FHA loan must meet certain standards to ensure it is safe and habitable. This includes an appraisal to determine the property’s value and condition.
  8. Assumable:
    • FHA loans are assumable, meaning that if you sell your home, the buyer may be able to take over your FHA loan (subject to lender approval).
  9. Government Backing:
    • FHA loans are insured by the federal government, which reduces the risk for lenders. This government backing allows FHA lenders to offer more favorable terms to borrowers.
  10. Credit Report History
    • Some people have a few dings on their credit report at some point. To qualify for a 30-year fixed-rate FHA loan, you must meet the following requirements:
      • No bankruptcies in the last 2 years
      • No short sales in the last 3 years
      • No foreclosures in the last 3 years

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Can I get an adjustable rate on an FHA loan?

Not typically, no. However, the FHA does offer a type of adjustable-rate mortgage (ARM) known as the FHA Hybrid ARM. The Hybrid ARM has an initial fixed interest rate period, followed by an adjustable rate for the remainder of the loan term. Common terms for the initial fixed-rate period include 3, 5, 7, or 10 years.

About FHA Hybrid Adjustable-Rate Mortgages:

  • Initial Fixed Rate: The initial fixed-rate period provides borrowers with a stable interest rate and predictable monthly payments for the specified number of years (e.g., 5 years).
  • Adjustable Rate Period: After the initial fixed-rate period, the interest rate on the FHA Hybrid ARM can adjust annually based on market conditions and specific terms outlined in the loan agreement.
  • Interest Rate Caps: FHA Hybrid ARMs typically have annual and lifetime interest rate caps to limit how much the interest rate can increase over time.
  • Mortgage Insurance Premiums (MIP): Borrowers with FHA Hybrid ARMs are required to pay mortgage insurance premiums (MIP), similar to fixed-rate FHA loans.
  • Credit Score and Qualification: Borrowers need to meet the FHA’s credit and eligibility requirements to qualify for an FHA Hybrid ARM.

You should keep in mind that while FHA Hybrid ARMs exist, not all lenders offer them, and the availability of specific loan products can vary.

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