Home Loans In Hollywood, Florida

Hollywood is located between Fort Lauderdale and Miami in southern Broward County. The city was founded in 1925 and grew significantly in the 1950s and 1960s to become the twelfth largest city in Florida. Hollywood is a major metropolis in the metropolitan area of Miami.

The housing market in Hollywood is somewhat competitive. It is marked by a rise in median home prices and a modest increase in the number of property listings.  Hollywood has some of the nation’s most significant home appreciation rates. Over the past ten years, the value of the real estate in the area has increased by 193.46% or an average annual rate of 11.3%. This places Hollywood in the top 10% of cities nationwide for property appreciation.

Home Loan Programs in Hollywood

Home buyers in Hollywood, Florida, have various mortgage options available to them. Some of the most commonly used mortgage loan programs are the following:

• Conventional Loan

A conventional loan in Hollywood, Florida, is a type of mortgage that is not insured by any government agency such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). It often satisfies the loan guidelines the Federal Housing Finance Agency (FHFA) put in place, and they conform to the down payment and income limits set by Fannie Mae and Freddie Mac. These loans are backed by private lenders.

Conventional loans can be either conforming or non-conforming. Conforming loans meet the requirements set by Fannie Mae and Freddie Mac, while non-conforming loans do not. The Federal Housing Finance Agency (FHFA) sets a maximum each year for the amount people can borrow on a conforming loan, and this limit varies by county. The maximum loan amount allowed for a Conventional Conforming Loan in Hollywood, Florida, in 2023 is $726,200 for a one-unit property, $929,850 for a two-unit home, $1,123,900 for a three-unit property, and $1,396,800 for a four-unit home.

To qualify for a conventional loan, you typically need a credit score of at least 620, with some lenders requiring a score of at least 660. However, if you want to make a lower down payment and get the best interest rates, having a score of 740 or higher is best. Additionally, down payment requirements for conventional loans can be as low as 3%, but many lenders require a down payment between 5% and 20%.

• FHA Loan

An FHA loan in Hollywood, Florida, is a type of mortgage that’s insured by the Federal Housing Administration (FHA). These loans are popular, especially among first-time home buyers, because they allow down payments as low as 3.5% for credit scores of 580 or higher. However, borrowers must pay mortgage insurance premiums, which protects the lender if a borrower defaults.

The loan limits for FHA loans in Hollywood, Florida, vary based on the number of living units in the home. For 2023, the FHA loan limit for Hollywood, Florida is $557,750 for a single-unit property, $714,000 for a duplex, $863,100 for a tri-plex, and $1,072,600 for a four-plex, respectively.

Applicants must meet specific criteria to qualify for an FHA loan in Hollywood, Florida. The minimum credit score is 500, but a score of 580 or higher is necessary to take advantage of the 3.5% down payment option. If your score is between 500 and 579, you must make a 10% down payment.

In addition to these criteria, FHA loans require the home to satisfy specific safety, soundness, and security requirements. Certain categories of FHA loans also have requirements regarding income and loan-to-value ratios.

• USDA Loan

A USDA home loan in Hollywood, Florida, is a zero-down-payment mortgage intended for homebuyers in eligible towns and rural areas. The USDA Rural Development Guaranteed Housing Loan Program guarantees these loans. The USDA loan is a type of mortgage-backed by the U.S. Department of Agriculture and issued through private financial institutions.

Applicants must show stable and dependable income and a credit history demonstrating the ability and willingness to repay the loan. While there is no minimum credit requirement for the USDA loan, applicants with a credit score of 640 or higher are eligible for the USDA’s automated underwriting system. Those with scores below 640 may still be eligible but require manual underwriting.

The USDA loan is designed to help those in rural areas purchase a residential home. The USDA’s definition of rural is generous, meaning many suburban areas, like Hollywood, Florida, might qualify. There are also population requirements of 35,000 maximum, depending on the location.

Income limits also apply. For 90% of USDA-eligible areas in Florida, the household income limit is capped at $82,700/year for 1-4 person households and goes up to $109,150/year for 5+ person households.

Moreover, the home purchased must be intended as the applicant’s primary residence, and the applicant must be a U.S. citizen or a lawfully-admitted resident alien.

As for the type of property, the property must have functional utilities, water and wastewater disposal services. The home’s site must be on a street, road, or driveway. New construction, manufactured or modular homes, condos, or townhomes may also qualify.

• VA Loan

A VA home loan is a type of mortgage loan guaranteed by the United States Department of Veterans Affairs (VA). This loan program was designed to offer veterans and eligible surviving spouses a way to get long-term financing for a home when they might not otherwise qualify. This type of loan is popular in Hollywood, Florida, and other parts of the country because it often doesn’t require a down payment and has similar interest rates to conventional mortgage loans.

The eligibility requirements for a VA loan include the following:

• Service Eligibility: The borrower must have served in a military branch during war for at least some time. Surviving spouses of service members who died in service or as a result of service-connected injuries may also be eligible for a VA Home Loan.
• Certificate of Eligibility (COE): A COE is needed to show your lender that you qualify based on your service history and duty status.
• Credit and Income Requirements: Apart from the service requirements, you’ll also need to meet your lender’s credit and income loan requirements to receive financing.
• Debt-to-Income Ratio: The lender will calculate the borrower’s monthly debt requirements from their credit report. Added to that amount will be the proposed mortgage payment, including escrow for home insurance and property taxes.
• Property Requirements: The purchased property must be intended to be used as the veteran’s primary residence. Eligible properties include townhomes, single-family homes, 2-4 unit owner-occupied homes, VA-approved condos, and new construction homes (if the builder is VA approved). In Hollywood, Florida, note that a heating system is not required for VA loans in certain South Florida counties, including Broward County, where Hollywood is located.
• Loan Limits: In 2023, Broward County has a VA loan limit of $726,200 for a single-unit residence and up to $1,396,800 for a four-plex. The loan amount impacts whether the VA loan will qualify as a VA jumbo loan.

It’s important to note that VA home loan purchases have options for a 0% down payment, no private mortgage insurance requirements, and competitive interest rates, with specific qualification requirements. The VA loan program also allows for refinancing in several ways, such as cash-out, streamline, and Interest Rate Reduction Refinance Loan (IRRRL).

• Jumbo Loan

Jumbo mortgages are home loans that exceed the conventional conforming loan limits set by Fannie Mae and Freddie Mac. These loans are often called “non-conforming loans” because they surpass the conforming limits. The conforming loan limit in Hollywood, Florida, for 2023 is $726,200. A loan that exceeds that amount must be a jumbo mortgage.

Because jumbo loans are more significant than conventional ones, lenders view them riskier. As a result, the requirements to qualify for a jumbo loan are typically more stringent. To qualify for a jumbo mortgage in Hollywood, Florida, applicants generally must have the following:

• A high credit score: Many lenders require a minimum credit score of 700 to 720. Some may require a higher score of 720 and up.
• A low debt-to-income ratio: Lenders want to ensure that borrowers can repay their loans even in the event of financial hardship. A low debt-to-income ratio is, therefore, another typical requirement. A DTI ratio of less than 43% is standard for jumbo loans.
• Sufficient funds for a down payment: A 10 – 20% down payment is a benchmark for jumbo loans. For a loan amount greater than $2.0 million, a larger down payment may be required.
• Cash reserves: Lenders may want to see proof that you have enough money in reserve to cover your mortgage payments for a certain period of time.

Note that these are general requirements and can vary between different lenders. Therefore, check with your specific lender for their eligibility requirements for a jumbo loan. 

Apply for a Home Loan in Hollywood

Capital Home Mortgage is a direct lender and servicer of mortgages in Hollywood. Whether you are a first-time buyer or a seasoned homeowner, we have the loan program to suit your needs and budget.

Call (754) 529-0071 to speak with our Hollywood Home Loan Specialists now.