Home Purchase Loans In Jacksonville

The housing market in Jacksonville is competitive. On average, a home gets three offers and sells in thirty-five days. However, new listings and closed sales have decreased, suggesting that real estate deals are moving more slowly. It dropped by 1.1% in the middle price range of homes sold. 

Purchase Loan Programs in Jacksonville

Jacksonville home buyers have various options when financing a home purchase. The most common mortgage programs in Jacksonville are the following;

• Conventional – Conforming Loans

In Jacksonville, Florida, a conventional mortgage is a type of home loan not guaranteed or insured by the government. Unlike FHA or VA loans, conventional mortgages are backed by private lenders and follow the criteria established by organizations such as Fannie Mae and Freddie Mac. These loans are distinguished by stringent credit standards, higher down payments, and less red tape throughout the approval process.

There are two types of conventional mortgages: conforming and non-conforming loans. A conforming loan satisfies requirements Freddie Mac and Fannie Mae established, such as underwriting standards and restrictions on loan size. By contrast, a non-conforming loan does not only fulfill specific requirements or surpass these restrictions, which prevents Fannie Mae and Freddie Mac from purchasing it. Because there is a greater risk to lenders, non-conforming loans usually have slightly higher interest rates than conforming loans.

Features of a conventional conforming loan in Jacksonville typically include reduced interest rates, a better selection of loan options, and the potential for smaller down payments if the borrower has excellent credit. A solid income and a minimum credit score, often greater than 620, are eligibility prerequisites. Additionally, the loan amount must be, at most, the Federal Housing Finance Agency’s (FHFA) conforming loan limits, which might change according to the year and the area.

The 2023 conforming loan limits in Jacksonville, Duvall County, are $726,200 for a single-family home, $929,850 for a duplex, $1,123,900 for a triplex, and $1,396,800 for a quadplex.

• FHA Home Loans

In Jacksonville, Florida, an FHA (Federal Housing Administration) mortgage is a government-insured loan designed to make homeownership more accessible, particularly for first-time homebuyers and those with less-than-perfect credit. Generally, this type of loan has less stringent credit and income requirements than conventional mortgages. The FHA insures the loan, reducing the lender’s risk and allowing them to offer better conditions to the borrower.

The main differences between an FHA loan and a conventional loan are eligibility and backing. Private sector lenders offer conventional loans, which frequently have stricter credit requirements and higher down payments. On the other hand, FHA loans are government-backed and intended to help borrowers with lower incomes and credit ratings. In general, they are more understanding of past credit problems and permit smaller down payments.

FHA loans in Jacksonville typically require a minimum credit score of 580; however, a score of 620 is highly suggested. A down payment of as little as 3.5% is needed, which is especially advantageous for first-time homebuyers or those with limited financial resources. 

The 2023 FHA loan limits in Jacksonville, Duvall County, are $526,700 for a single-unit home, $674,250 for a duplex, $815,050 for a triplex, and $1,012,900 for a quadplex.

• VA Home Loans

A VA mortgage in Jacksonville, Florida, is a specialty home financing option developed for current and past military service members, including National Guard and Reserve members. The U.S. Department of Veterans Affairs backs the VA loan program, which partially guarantees the loan and allows lenders to offer more advantageous conditions. VA loans can be utilized to buy a primary dwelling, such as a house, duplex, or fourplex, as long as the borrower plans to live in the property.

The critical distinctions between a conventional and a VA loan are their qualifying requirements, down payment requirements, and mortgage insurance requirements. VA loans are exclusively available to people who have served in the military. Conventional loans frequently need a down payment and, if the down payment is less than 20%, may entail private mortgage insurance (PMI). In contrast, VA loans frequently do not require a down payment and do not require PMI.

To qualify for a VA loan in Jacksonville, one must have completed military service, which includes characteristics such as length and type of service. Qualifying individuals may finance a property with no down payment and without the need for mortgage insurance. Furthermore, VA loans typically have cheaper interest rates and more liberal credit standards. A VA Certificate of Eligibility (COE) is also necessary to demonstrate your eligibility for the loan.

• USDA Home Loans

A USDA mortgage in Jacksonville, Florida, is a home loan program that helps applicants with low to extremely low incomes find decent, secure, and hygienic homes in rural areas that meet eligibility requirements. USDA-Direct and USDA-Guaranteed loans are the two primary loan forms through which the program offers financial assistance. Although they both seek to encourage homeownership in rural areas, their terms and income targets differ.

The primary distinction between USDA-Direct and USDA-Guaranteed loans is their financial structure. USDA-Direct loans are intended for low-income households and are made available directly by the United States Department of Agriculture. On the other hand, USDA-Guaranteed loans are provided to low- to middle-income families and made available through approved lenders, with the USDA offering a 90% loan note guarantee to limit lender risk.

USDA-Guaranteed loans in Jacksonville, Florida, offer low 30-year fixed-rate mortgages. They need no down payment and provide 100% financing. The program aims to reduce risk for lenders by giving a loan note guarantee of 90%. Eligibility conditions include U.S. citizenship or permanent residency, a consistent and sustainable income for at least two years, and the property must be located in a rural location that meets the criteria.

• Jumbo Loans

A jumbo mortgage in Jacksonville, Florida, is a home loan that exceeds the Federal Housing Finance Agency’s (FHFA) conforming loan limits. In Florida, this maximum is often set at $726,200; any loan amount in excess of this amount is classified as a jumbo loan. Jumbo mortgages fund houses that are too expensive for a typical conforming loan, hence meeting the needs of homebuyers interested in higher-end properties.

The key distinction between a conventional and jumbo loan is the loan size and the underwriting standards. While conventional loans are restricted to conforming loan limitations and are frequently guaranteed by Fannie Mae and Freddie Mac, jumbo loans transcend these limits. These government-sponsored enterprises do not guarantee them. Jumbo loans have tougher loan-to-value (LTV) criteria and may need larger down payments than regular loans.

In Jacksonville, jumbo home loans offer a variety of features and benefits. Typically, they provide the means to acquire properties with prices exceeding millions of dollars. Even though these loans frequently require a higher income and credit score, they may offer competitive interest rates. Typical eligibility requirements for jumbo loans include a good to outstanding credit score, a higher income, and a larger down payment than those for conventional loans.

• Non-Qualified Mortgage Loans

In Jacksonville, Florida, a Non-Qualified Mortgage (Non-QM) is a type of home loan that doesn’t meet the requirements set by the Consumer Financial Protection Bureau (CFPB) to be a Qualified Mortgage (QM). Non-QM loans are not limited by the strict rules for protecting consumers by the Dodd-Frank Act. These loans are usually for people with unusual income, credit challenges, or other unusual financial situations.

The requirements for a Non-QM loan in Jacksonville are less strict regarding income, credit, and debt-to-income ratios. Because of this, they are an excellent choice for self-employed people whose income changes often or who have marginal credit. Non-QM loans in Jacksonville usually require a more significant down payment, higher interest rates, and proof that you can repay the loan, among other things. The exact requirements may vary depending on the lender. In exchange for these loans, you usually have to pay bigger down payments or higher interest rates than with Qualified Mortgages.

Apply for a Jacksonville Home Purchase Loan

Capital Home Mortgage is a direct mortgage lender and servicer in Florida. We offer a range of mortgage choices to meet all needs. Our mortgage team knows a lot about different loan programs and can help you choose the best one for your needs and budget. Because every loan is different, our loan officers give clients the information, help, and freedom they need to choose the right mortgage program. 

Call (239) 310-5599 to speak with a Jacksonville Home Loan Specialist.