Home Loans In Tampa

Tampa is a Gulf Coast metropolis in the U.S. state of Florida. The county seat of Hillsborough County and the largest city in the Tampa Bay area, Tampa is also the largest city in the Tampa Bay metropolitan area. Tampa is Florida’s third most populous city, following Jacksonville and Miami. Tourism, health care, finance, insurance, technology, construction, and the maritime industry drive Tampa’s economy.

Many people from other states relocate to Florida because of the warm weather, favorable tax policies, and picturesque scenery. Because the pandemic allowed many workers to work from home, many people could relocate to a better city without leaving their jobs.

Aside from its pleasant climate, the state’s affordable housing attracts out-of-state residents. Since the beginning of the pandemic, one of the factors driving demand for Tampa real estate has been the sudden increase in population growth, which is expected to continue in 2023 and later years.

Home Loan Programs in Tampa

Homebuyers in Tampa, Florida, have various mortgage financing options accessible to them. Conventional, FHA, VA, and USDA loans are some of the most common mortgage types. Fixed-rate mortgages and adjustable-rate mortgages are also popular options. Here’s a rundown of each option’s advantages and disadvantages:

• Conventional loans:

These loans are not government-guaranteed and often require a higher credit score and a larger down payment. They can have either fixed or adjustable interest rates. Conventional loans could either be conforming or non-conforming.

Conforming loans adhere to the stringent underwriting guidelines established by government-sponsored enterprises Fannie Mae and Freddie Mac. In addition, they meet the Federal Housing Finance Agency’s annually-evolving funding requirements. These loan limits facilitate the sale of conforming loans to Fannie Mae and Freddie Mac on the secondary market. For 2023, the conforming loan limit in Tampa is $726,200 for a single-family residence.

Non-conforming loans, on the other hand, exceed the loan limitations imposed by Fannie Mae and Freddie Mac or don’t meet their underwriting guidelines. When these loans exceed the conforming loan limits, they are called jumbo loans. Non-conforming loans cannot be sold to Fannie Mae or Freddie Mac on the secondary market, making them riskier for lenders.

Pros: Lower mortgage insurance rates and more flexible terms.

Cons:  More stringent credit criteria and a larger down payment are required.

• FHA loans:

These loans are insured by the Federal Housing Administration and designed for borrowers with lower credit scores or those who need a lower down payment. FHA home loans are the easiest to qualify for among all home loan programs. They only require a credit score of 580 and lenient qualification requirements.

For the calendar year 2023, the FHA loan limit for Hillsborough County is $472,030 for a single-unit property, $604,400 for a duplex, and $730,525 for a duplex a tri-plex, and $907,900 for a four-plex.

Pros: Lower down payment (as low as 3.5%) and less stringent credit score criteria.

Cons: Mortgage insurance premiums are required, which might raise the overall cost of the loan.

• VA loans:

VA home loans are mortgage loans guaranteed by the United States Department of Veterans Affairs (VA) for qualified veterans, active-duty service members, and certain surviving spouses. These loans typically offer better terms and conditions than traditional loans from private banks, mortgage companies, or credit unions. VA loans frequently include lower interest rates, no down payment, and no need for private mortgage insurance.

To be eligible for a VA home loan, applicants must satisfy specific eligibility requirements for military service and personal finances. The VA eligibility requirements consist of the following:

•  Active-duty service members who have served at least 90 days during wartime, including at least 30 consecutive days or 181 days during peacetime.
• National Guard or Reserve members who have completed at least 6 creditable years and were discharged honorably or placed on the retired list.
• Veterans who meet length-of-service requirements, generally are 90 days during wartime or 181 days during peacetime.
• A satisfactory credit score is typically at least 620, although the VA does not have a minimum credit score requirement.
• Sufficient income to afford the loan amount.
• A valid Certificate of Eligibility (COE) is obtained by submitting a completed VA Form 26-1880, Request For A Certificate of Eligibility For Home Loan Benefits, and proof of military service.
• The property must meet the VA’s Minimum Property Requirements (MPRs), ensuring the home is safe, structurally sound, and sanitary.

It is important to note that lenders may have additional requirements for homes in addition to the VA’s property requirements.

Pros: No down payment requirement, no mortgage insurance, and competitive interest rates.

Cons: Limited to eligible borrowers and may have a funding fee, which can be financed into the loan.

• USDA loans:

A USDA home loan is a mortgage made or guaranteed by the United States Department of Agriculture’s (USDA) Rural Housing Service agency. It is designed to help homebuyers with low to moderate incomes purchase homes in eligible rural and suburban areas. USDA loans are part of the USDA’s Rural Development program, which aims to encourage homeownership in less densely populated areas.

USDA home loans offer zero-down-payment options and low-interest rates, making them attractive for qualified borrowers. The USDA defines rural areas as having a population under 35,000, and many suburbs also meet the USDA criteria for eligible locations.

There are two main types of USDA home loans:

• USDA Rural Development Guaranteed Housing Loan: This loan is guaranteed by 

the USDA, which means that the USDA agrees to repay the lender if the borrower defaults on the loan.

• Section 502 Direct Loan Program: This program assists low- and very low 

income applicants in obtaining decent, safe, and sanitary housing in eligible rural areas by providing payment assistance to increase the applicant’s repayment ability.

Pros: No down payment requirement and lower mortgage insurance premiums.

Cons: Geographic restrictions and income limitations.

• Jumbo loans:

A jumbo mortgage is a mortgage that exceeds the loan limits set by the Federal Housing Finance Agency (FHFA) and is a non-conforming loan.  In 2023, the conforming loan limit for a single-family home is $726,200 in Hillsborough County. A jumbo loan is used to finance properties that are too expensive for a conventional conforming loan.

To qualify for a jumbo loan, applicants typically require a high credit score (often 720 or higher), a low debt-to-income (DTI) ratio, and substantial cash reserves. Lenders will also consider the down payment size, the ratio of monthly debt obligations to income, and the amount of money left over after closing.

Jumbo loans are more significant than traditional mortgages, making them riskier for lenders, which can result in stricter qualification requirements and potentially higher interest rates.

Pros: Higher loan limits. Jumbo loans allow borrowers to purchase bigger properties with higher home prices.

Cons: Top-tier credit is required. Applicants typically need a credit score of 720 or higher to qualify for a jumbo loan.

Apply for a Home Loan in Tampa

Tampa is a vibrant and dynamic city with numerous attractions and qualities, making it a great place to live. It offers diverse communities, family-friendly attractions, affordable living, and a vibrant culinary scene.

If you are looking to make Tampa your home, Capital Home Mortgage can help. We are a direct lender offering various home loan products to meet every borrower’s needs and budget. Call us at (239) 310-5599 to speak with our Home Loan Specialists and get started on your path to homeownership in Tampa.