What the listing usually does not explain is how much work sits between that promise and a closing. The loan has to be one that allows assumption, the buyer has to be approved by the company that services it, and the buyer has to cover the difference between the sale price and the loan balance without borrowing it from the same loan.

Here is how assumptions work for FHA and VA loans in Florida, what each program requires, and where the math usually breaks down.

Which loans can be assumed

FHA is the broadest of the four. HUD’s position is that all FHA-insured single family forward mortgages are assumable, and its rules do not let the servicer add its own restrictions after closing. VA is similar in principle: assumptions are a required feature of VA-guaranteed loans, and the servicer must approve one when the loan is current and the buyer is creditworthy under VA standards.

Conventional loans are the opposite case. Fannie Mae’s selling guide states that conventional fixed-rate loans are not assumable as of the note date, and Freddie Mac’s guide treats standard fixed-rate conventional mortgages as nonassumable. There are narrow exceptions for transfers such as inheritance or divorce. Those exceptions do not help a buyer who simply wants the seller’s lower rate.

The equity gap decides whether the deal works

An assumption transfers the loan, not the equity. The buyer still pays the seller for the home, and the loan balance only covers part of that price.

Suppose a Boca Raton townhouse sells for $450,000 and the seller’s FHA loan balance is $310,000. The buyer assumes $310,000 of debt and needs $140,000 for the rest of the price, plus closing costs and the assumption fees. FHA does not require a cash investment in the property and allows the buyer to assume 100 percent of the outstanding balance, but FHA does not finance the gap.

That gap is the reason many assumable listings never close. A seller who bought in 2021 with a small down payment may have a gap of 10 to 20 percent of the price, which is manageable for many buyers. A seller who has owned the home for 15 years may have a gap of 50 percent or more, which means the buyer needs a large amount of cash or a second mortgage.

Second liens can fill the gap in some cases. Whether one is allowed, and on what terms, depends on the program, the servicer, and the second lender. The payment on that second lien counts when the servicer qualifies the buyer, and a second mortgage at a much higher rate can erase most of the savings on the first.

How an FHA assumption works

Who can assume

For FHA loans closed on or after December 15, 1989, the buyer must intend to occupy the property as a principal residence or a HUD-approved secondary residence. Investment property assumptions are limited to loans closed before that date, and those carry a 75 percent loan-to-value cap. HUD-approved secondary residences are capped at 85 percent.

In practical terms, an investor cannot take over a recent FHA loan and rent the property out. A buyer who plans to live there can.

The buyer is fully underwritten

An FHA assumption is not a paperwork transfer. The servicer reviews credit, income, employment, assets, and debts, and the file is manually underwritten by a Direct Endorsement underwriter. HUD does not allow the TOTAL Mortgage Scorecard for assumptions.

One detail makes FHA assumptions easier than a new FHA loan. HUD’s assumption rules exclude the property review, so no new appraisal, no Minimum Property Requirements inspection, and no condo project approval are required by HUD for the assumption itself. The servicer can still ask for information it wants, but a roof or a condo questionnaire is less likely to stop the file than it would on a new loan.

What it costs

HUD caps the servicer’s assumption processing fee at $1,800, up from $900 in May 2024. The servicer can also charge actual costs for credit reports and verifications, and up to $45 for preparing a release of liability form. Normal closing costs still apply: title search and insurance, settlement fees, recording, and any HOA or condo charges.

The seller can contribute to the buyer’s closing costs within FHA’s interested party contribution limits.

What stays with the loan

FHA mortgage insurance stays in force when the loan is assumed, and the seller does not receive a refund of premiums paid. The buyer steps into the existing insurance terms rather than a new mortgage insurance schedule.

Two seller-side items can change the payoff. If the seller used a partial claim, for example through a COVID-19 forbearance, that partial claim becomes due when the seller transfers the property and has to be resolved at or before closing. If the property has a PACE assessment, it stays with the property and must be disclosed to the buyer. Ask for a payoff statement that lists both.

How a VA assumption works

VA loans are assumable by veterans and non-veterans alike. The servicer must approve the assumption when three things are true: the loan is current, the buyer is contractually obligated to purchase the property and assume full liability, and the buyer is creditworthy under VA standards. A servicer with automatic authority must decide within 45 days of a complete application.

Fees

VA charges a funding fee of 0.5 percent of the loan balance on an assumption, unless the buyer is exempt. On a $310,000 balance that is $1,550. The fee is paid in cash at closing and cannot be added to the loan. Some buyers are exempt, including many veterans who receive VA disability compensation and eligible surviving spouses.

The servicer’s assumption processing fee is capped at $300. VA has also approved locality variances that allow an additional fee in some areas, so ask for an itemized list. Credit reports, recording fees, taxes, insurance, and title work are allowed on top of that.

Entitlement

This is the part sellers miss. If the buyer assumes the loan without a substitution of entitlement, the seller’s VA entitlement stays tied to that loan until it is paid off. The seller may not have enough entitlement left to buy another home with a VA loan.

If the buyer is an eligible veteran who will occupy the home and has enough entitlement, the buyer can substitute entitlement for the seller’s. That restores the seller’s entitlement. A non-veteran buyer cannot do this, which is why a VA assumption by a non-veteran can leave the seller in a bind.

Release of liability

When the servicer approves the assumption, the seller is released from liability on the loan. If a buyer moves in and takes over payments without servicer approval, the seller remains liable, and the servicer can accelerate the loan.

USDA loans and conventional loans

USDA guaranteed loans can be assumed, but the process runs through the Agency. The lender must get USDA approval, the buyer must meet USDA eligibility rules including income limits and primary residence occupancy, and the seller remains personally liable on the loan after the transfer. USDA also requires a new guarantee fee based on the remaining balance.

Conventional loans mostly cannot be assumed by a new buyer. If a listing claims a conventional loan is assumable, ask for the servicer’s written confirmation before you count on it.

Florida costs that do not disappear when the loan stays

The mortgage payment is only part of the monthly number.

Property taxes reset

Florida homestead property is assessed at just value on January 1 of the year after a change of ownership. The seller’s capped assessed value and homestead exemption do not transfer with the house, and portability belongs to the seller, not the property. A buyer who assumes a loan can still see the escrow payment jump because the tax bill is based on a new assessment. We covered the mechanics in why your Florida property tax bill changes after closing.

Insurance is a new policy

The buyer needs hazard insurance in their own name, and in South Florida that usually means a wind policy and often flood coverage. The premium will not match the seller’s, especially if the seller had older policies or credits that do not carry over. Lenders require coverage to be in place before closing.

HOA and condo costs continue

Dues, assessments, and any pending special assessments follow the property. An assumption may avoid some of the project review that slows a new condo loan, but the servicer can still ask for HOA information, and the buyer still needs an estoppel.

When an assumption is the wrong choice

The rate is not the whole comparison. A few situations where a new loan is usually better:

• The equity gap is large. If the buyer needs $200,000 in cash to assume a $300,000 loan on a $500,000 home, a new loan with mortgage insurance may be cheaper than draining reserves.
• The remaining term is short. A loan with 12 years left has a much higher payment than a new 30-year loan, even at a lower rate.
• The existing rate is close to current market rates. The buyer takes on the gap, the fees, and a slower process for very little benefit.
• The seller cannot wait. Assumptions are underwritten by hand and can take longer than a new loan.

The order of events

1. Confirm the loan type, balance, rate, and current status, and get the servicer’s name. The servicer, not the listing agent, controls the process.
2. Ask the servicer for its assumption package and a payoff statement, including any partial claim.
3. Submit the application with income, asset, and credit documentation.
4. Complete underwriting. FHA files are manually underwritten. VA files are decided by the servicer or sent to VA.
5. Handle entitlement substitution if the buyer is a veteran and the seller needs entitlement restored.
6. Close: sign the assumption agreement and deed, pay the fees and any funding fee, and place insurance.
7. Confirm the release of liability and the servicer’s records update.

Frequently asked questions

Can a buyer assume an FHA loan and rent the property out?

Generally no. For FHA loans closed on or after December 15, 1989, the buyer must occupy the home as a principal residence or a HUD-approved secondary residence. Investment property assumptions are limited to older loans and a 75 percent loan-to-value cap.

Can a non-veteran assume a VA loan?

Yes. The buyer does not have to be a veteran, but the servicer must approve the assumption, the buyer must be creditworthy under VA standards, and the 0.5 percent funding fee applies unless an exemption applies.

Does the seller stay liable after an assumption?

Not if the servicer approves the assumption and releases the seller. On a VA loan, the seller’s entitlement can remain tied to the loan unless the buyer substitutes entitlement. On a USDA loan, the seller remains personally liable even after an approved transfer.

Can the buyer roll the equity gap into the assumed loan?

No. The assumed loan balance stays where it is. The gap has to come from cash, a second lien, or another source, and any new debt counts in the buyer’s qualification.

Is a new appraisal required?

HUD’s FHA assumption rules do not require a new appraisal or property review. VA’s assumption guidance does not make a new appraisal a standard step either. The servicer can still order one, so ask early in the process.

How long does an assumption take in Florida?

Plan on weeks. VA servicers with automatic authority must decide within 45 days of a complete application, and FHA files go through manual underwriting. A 30 to 60 day timeline is realistic when the file is clean, but nobody can guarantee a closing date.

If you are buying or selling in Boca Raton or anywhere in Palm Beach County and an assumable loan is part of the deal, start with a pre-approval conversation so the numbers are clear before the contract deadline. You can also compare the existing payment with a new loan payment before you decide which way to go.

Here is what is actually happening, and how to plan for it before you close.

The short version

• Florida property taxes are paid in arrears. The bill you get in November covers the year that is almost over.
• At closing, the seller credits you for the part of the year they owned the property. That credit is usually based on the seller’s tax bill, not yours.
• The seller’s bill often reflects a capped assessed value and a homestead exemption that do not transfer to you.
• The county reassesses as of January 1 after the sale. That is when the taxable value can jump.
• If your taxes are escrowed, the increase reaches you as a higher monthly payment and possibly a shortage, not as a bill in the mailbox.

Florida taxes are paid in arrears

The Florida tax year runs January 1 through December 31, but the bill for that year does not arrive until November. In Palm Beach County, bills open for collection on November 1 and are due by March 31 of the following year. Paying early earns a discount: 4 percent in November, 3 percent in December, 2 percent in January, and 1 percent in February.

That timing causes most of the confusion. If you close in June, six months of the current tax year have already passed, and nobody has paid a dollar of it yet.

What proration at closing really does

Proration is a settlement adjustment, not a tax payment. Because the seller occupied the property for part of the year without paying that year’s tax, the seller credits you for their share of the year at closing. The day of closing is normally charged to the buyer.

The credit is almost always an estimate. Under the FAR-BAR AS IS Residential Contract for Sale and Purchase, taxes are prorated based on the current year’s tax, and if the current bill is not yet available, the prior year’s bill is used. The proration section of that contract, Standard K, also gives either party the right to request a readjustment when the actual bill comes out, and that right survives closing.

Two details are worth knowing:

• Proration is normally figured on the seller’s tax amount, which may be far below what the property will be taxed at for you.
• Non-ad valorem assessments on the bill, such as solid waste or fire assessments, run on a fiscal year and are often paid in advance. Those are usually credited to the seller instead of you, because you are the one who will use the service for the rest of that fiscal year.

Why the seller’s tax number does not carry over

Two separate protections keep a long-time Florida homeowner’s tax bill low, and neither one follows the deed.

1. The Save Our Homes cap

Homestead property is assessed at just value when the owner qualifies. After that, the assessed value can rise no more than 3 percent a year, or the change in the Consumer Price Index, whichever is lower. In a market that has appreciated faster than 3 percent a year, the seller’s assessed value can sit well below what the home is actually worth.

Florida Statute 193.155(3)(a) resets that. After a change of ownership, the property is assessed at just value as of January 1 of the year following the sale, and the cap starts over from there. The seller can port the accumulated Save Our Homes benefit to a new Florida homestead, but it cannot be handed to the buyer.

2. The homestead exemption

The homestead exemption is tied to a person, not a property. A qualifying owner can exempt up to $50,000 of assessed value, with part of that amount applying only to non-school taxes. When the property sells, that exemption comes off the roll. You can qualify for your own, but only if you owned the property and used it as your primary residence on January 1 of that tax year, and you apply by March 1.

Put those two rules together and the math becomes easy to see. A seller might have been taxed on a capped assessed value of $240,000 with a $50,000 exemption, which is $190,000 of taxable value. A buyer who pays $650,000 can end up taxed on a taxable value several times larger, even after filing for their own exemption.

When the increase actually shows up

This is where buyers get surprised in the wrong year. The change follows the assessment date, not your closing date.

• The bill for the year you bought. This one usually still reflects the seller’s ownership on January 1, including their exemption. The proration credit you received at closing was calculated on that same basis, so this bill often looks close to what you expected.
• The bill for the following year. This is the one built on the January 1 reassessment after the sale. This is where taxable value jumps, even if you filed for homestead on time.
• The escrow analysis after that. This is where your monthly payment catches up, often with a shortage spread over future payments.

New construction adds another layer. The first bill on a newly built home can reflect land value or partial completion, and the following bill reflects the finished structure.

Why your escrow account runs short

If your loan has an escrow account, your lender collects a monthly amount for taxes and insurance and pays the bill for you. At closing, that number is an estimate, and it is often based on the current tax bill, which is the seller’s bill.

When the real bill comes in higher, the servicer runs an escrow analysis. Federal rules under Regulation X, 12 CFR 1024.17, cap the cushion a servicer can hold at one sixth of the estimated annual disbursements. If the account is short, the servicer can require repayment. For a shortage equal to one month’s escrow payment or more, repayment can be spread over at least twelve months, and it cannot be demanded as a lump sum.

The practical result: principal and interest do not change on a fixed-rate loan, but your total payment can climb twice, once for the higher tax amount and once for the shortage repayment.

Some loan programs allow escrow to be waived at a certain loan-to-value, which puts the tax bill back in your hands directly. That depends on the program, the lender, and the pricing, so ask before assuming it is available.

What to check before you close

• Ask for a tax estimate at your purchase price. Not the seller’s bill. Your closing agent or loan officer can run the math on the purchase price with no seller exemption applied.
• Ask how proration was calculated. Confirm whether the current year’s bill or the prior year’s bill was used, and who receives the credit for non-ad valorem assessments.
• Budget for the second-year payment. If the seller owned the home for a decade, assume a meaningful increase and leave room in your monthly budget.
• Watch for the TRIM notice. Palm Beach County mails its Notice of Proposed Property Taxes in August. Check the assessed value, the exemptions listed, and the proposed millage rates. The notice also states the deadline to file a value petition with the Value Adjustment Board, and that window is short.
• Update your mailing address. Tax bills go to the address on file with the Property Appraiser, so a bill can still be addressed to the seller for a while.
• File for homestead by March 1. If you owned and occupied the home on January 1, apply with the Palm Beach County Property Appraiser. Missing the deadline costs you a full year of exemption.

Amendment 3 is on the ballot, not in the law

Florida voters are deciding Amendment 3 on the November 3, 2026 ballot, and it needs 60 percent approval to pass. As written, it would raise the homestead exemption for non-school taxes to $150,000 in 2027 and $250,000 in 2028, with inflation adjustments after that, while school taxes keep the current $25,000 exemption. It would also lower the annual assessment cap on non-homestead property from 10 percent to 5 percent, and phase in the increased exemption for people who are not Florida residents by December 31, 2026.

Three things are worth keeping straight. It is a proposal until the votes are counted. It would not change a bill you have already received. And it would not restore a seller’s capped assessed value, because reassessment after a sale is a separate rule that the amendment does not touch.

FAQs

Will my property taxes be the same as the seller’s?

Usually not. The seller’s bill likely reflects a capped assessed value and a homestead exemption that end with the sale. Your taxable value is set by a new assessment as of January 1 after the sale.

Can I take over the seller’s homestead exemption?

No. The exemption belongs to the person who qualified for it. You can qualify for your own if you own and occupy the home on January 1 and apply by March 1.

Who pays the property tax bill for the year I bought the home?

You pay the bill when it comes due. The seller credits you at closing for the part of the year they owned the property, and either party can request a readjustment once the actual bill is issued.

My rate is fixed. Why did my payment go up?

Because of escrow. The tax and insurance portions of your payment are recalculated when the actual bills arrive, and any shortage is collected on top of the new monthly amount.

Does the county reassess every year?

Yes. Values are set as of January 1 each year. For homestead property, the 3 percent cap limits how much the assessed value can rise after the first year.

Plan the payment, not just the price

The purchase price tells you what the loan will be. The tax bill tells you what the payment will feel like two years from now. If you are buying in Boca Raton or anywhere in Palm Beach County, we can run the numbers with a realistic tax estimate before you make an offer.

Use our mortgage calculator for a quick payment check, review current mortgage rates, or start a pre-approval. For more on the exemption side, read Florida homestead exemption and portability in 2026.

This article is general information, not tax or legal advice. Tax rules and county procedures can change, and your situation may involve details this article does not cover. Confirm specifics with the Palm Beach County Property Appraiser, the Palm Beach County Tax Collector, or a qualified tax professional.

This guide walks through what each requirement does, which buildings they cover, and how the results show up in a mortgage file. It is general information, not legal advice, and it is not a substitute for the association’s documents or your own inspections.

Two Rules, Not One

Buyers often use “milestone inspection” and “reserve study” as if they were the same thing. They are separate requirements with separate reports.

The milestone inspection lives in Florida Statutes section 553.899. It is a structural inspection of the building performed by a licensed architect or engineer. It answers a safety question: is the structure sound, and does anything need repair?

The structural integrity reserve study, usually called a SIRS, lives in section 718.112(2)(g) of the Condominium Act. It is a visual inspection of specific components plus a funding plan. It answers a money question: what will these components cost to replace, and how much should the association collect each year to pay for them?

A building can be current on one and behind on the other. When you review a condo file, check both.

Which Buildings Are Covered

The milestone inspection applies to a building that is three or more habitable stories in height under the Florida Building Code and is subject, in whole or in part, to condominium or cooperative ownership. Section 553.899 does not apply to a single-family, two-family, three-family, or four-family dwelling with three or fewer habitable stories above ground. Floor area used only for parking, storage, or mechanical equipment generally does not count toward the habitable story count.

The timing runs off the certificate of occupancy. A covered building must be inspected by December 31 of the year it reaches 30 years of age, and every 10 years after that.

There is a local wrinkle that matters in South Florida. Under section 553.899(3)(b), the local enforcement agency may determine that local circumstances, including environmental conditions such as proximity to salt water, require the inspection at 25 years instead of 30. That decision belongs to the city or county building department, so two buildings of the same age in different jurisdictions can be on different schedules. The current statute does not set a fixed distance from the coast. The trigger is the local agency’s determination. If you are buying near the water, ask the building department what schedule it has set rather than assuming 30 years.

The catch-up deadlines from the original 2022 law have both passed. A building that reached 30 years of age before July 1, 2022 had to be inspected before December 31, 2024. A building that reached 30 between July 1, 2022 and December 31, 2024 had to be inspected before December 31, 2025. The 2026 Florida Statutes contain no further extension of those dates.

The SIRS covers residential condominium buildings three habitable stories or higher. Unit owner controlled associations that existed on or before July 1, 2022 had a general deadline of December 31, 2025. The statute also allows an association that must complete a milestone inspection on or before December 31, 2026 to complete the SIRS at the same time, but in no event after December 31, 2026. An association that has already completed a milestone inspection may delay the study for up to the two consecutive budget years following that inspection.

What Happens During a Milestone Inspection

The process has fixed steps and deadlines.

Notice. The local enforcement agency sends written notice to the association by certified mail. The association then has 14 days to notify unit owners and give them the date the inspection must be completed.

Phase one. A licensed architect or engineer performs a visual examination of habitable and nonhabitable areas, including the major structural components, and provides a qualitative assessment. Phase one must be completed within 180 days after the owners receive the notice. If the inspector finds no signs of substantial structural deterioration, the inspection ends there.

Phase two. If phase one finds substantial structural deterioration, phase two is required. It may involve destructive or nondestructive testing and produces recommendations for repair. The statutory definition of substantial structural deterioration excludes ordinary surface conditions like cracking, sagging, or peeling finishes unless the inspector determines they signal something structural.

Reporting. The inspector submits a sealed report to the association and to the local building official. The association must distribute the inspector-prepared summary to every owner within 45 days, post it conspicuously on the property, and publish it on the association website if the association is required to have one.

Repairs. If a phase two report identifies substantial structural deterioration, repairs must be commenced within 365 days after the report is received. Local governments adopt ordinances setting the schedule. If the association cannot show the work has been scheduled or started, the local enforcement agency must review whether the building is safe for occupancy.

What the Reserve Study Actually Says

The SIRS is narrower than a full engineering report and broader than a routine budget line. It must cover, at a minimum, the roof, the structure including load-bearing walls and primary structural systems, fireproofing and fire protection systems, plumbing, electrical systems, waterproofing and exterior painting, windows and exterior doors, and any other item with a deferred maintenance or replacement cost above the statutory threshold that affects those systems.

For each item, the study states the estimated remaining useful life and the estimated replacement cost or deferred maintenance expense. It then provides a reserve funding plan with a recommended annual amount. The visual inspection portion must be performed or verified by a licensed engineer, a licensed architect, or a certified reserve specialist or professional reserve analyst.

The financial consequence is the part buyers underestimate. When an association is required to have a SIRS, section 718.112(2)(f) requires reserves to be maintained for the items the study covers, based on the study’s findings, and the statute does not let the association vote those reserves away. A transition rule let some associations adopt budgets before the end of 2024 with less than the recommended funding, but the Department of Business and Professional Regulation’s guidance is that SIRS funding begins with the 2026 budget year. Budgets adopted on or after January 1, 2025 do not carry the waiver option.

In practical terms, a building that spent 20 years underfunding its reserves can see a sharp jump in monthly dues once the study’s numbers reach the budget.

Why Reserve Shortfalls Turn Into Special Assessments

Reserves are collected gradually. Repairs are not gradual. When a roof, a seawall, a parking garage, or a full building waterproofing project comes due before the reserve account can cover it, the association has a limited set of options: raise regular assessments, take a loan or line of credit, or levy a special assessment on owners.

A special assessment is a one-time charge, sometimes payable in installments. For a buyer, it can arrive in three forms:

• Already approved and being collected. The current owner may owe the remaining balance, and the estoppel or closing statement should show it.
• Approved but not yet billed. These show up in board minutes and in the project questionnaire long before they show up on a statement.
• Not yet approved but likely. This is the hardest to document. A SIRS that identifies large unfunded items, or a phase two report recommending repairs, is the clearest warning sign.

Do not assume the seller absorbs a special assessment. In Florida practice, who pays is set by the contract, and it is a negotiation point you should raise before signing rather than after.

How This Shows Up in Your Mortgage File

Conventional condo loans go through a project review, and the review is where these documents land. Under Fannie Mae’s project standards, a few points matter most.

Critical repairs. A project in need of critical repairs is ineligible. The definition includes material deficiencies that could cause a system failure within a year, mold or water intrusion, advanced physical deterioration, a project that failed a state or local mandatory structural inspection, and unfunded repairs costing more than $10,000 per unit that should be undertaken within the next 12 months. Routine maintenance and repairs funded through an approved special assessment within guidelines are treated differently.

Inspection reports. If a structural or mechanical inspection was completed within three years of the lender’s project review date, the lender must obtain and review the report. It cannot show unaddressed critical repairs, an evacuation order, or a required regulatory action. If it does, the project stays ineligible until the work is done and documented.

Special assessments. Lenders must review each current or planned special assessment, including its purpose, amount, remaining balance, and payoff date, and determine whether it addresses a critical repair. A special assessment tied to an unremediated critical repair is a problem, not a rounding error.

The budget and the payment. HOA dues count in your debt-to-income ratio. A budget that shows rising reserve contributions, or an assessment running alongside the regular dues, changes what you qualify for. That is why the same purchase price can produce two different approvals in two different buildings.

The resale package. Under section 718.503, a buyer who has a contract is entitled, at the seller’s expense, to the inspector-prepared summary of the milestone inspection report if applicable, and the association’s most recent SIRS or a statement that one has not been completed. Contracts entered after December 31, 2024 must include specific conspicuous statements about the status of these items. Read them. A statement that a required study has not been completed is information, not boilerplate.

If the building does not fit agency project standards, the financing conversation shifts to portfolio and non-agency options. That is a different loan with different pricing and terms, not a dead end. We cover those mechanics in non-warrantable condo loans in Boca Raton and in what can slow down condo financing.

What to Request Before Your Inspection Period Ends

Ask for these in writing, early, ideally before you make an offer:

• The inspector-prepared summary of the most recent milestone inspection report, including any phase two report.
• The most recent SIRS, not just a summary in the agent’s remarks.
• The current approved budget and the most recent year-end financial statement, including the reserve schedule.
• A statement of any approved, planned, or discussed special assessment, with amounts and payment terms.
• The minutes of the last several board meetings. Structural repairs and assessments usually appear there first.
• The project questionnaire once the lender sends it. Review the reserve and assessment answers against the documents above.
• The HOA estoppel, which shows dues, assessments, and delinquency status for the unit.

Read the phase one report for what it recommends, and read the SIRS for the gap between recommended funding and actual reserves. A well-maintained building with a clean phase one report and a funded reserve plan reads very differently from a building with a phase two report and a study showing large unfunded items.

What This Does Not Mean

An inspection is not a warranty. A phase one report that finds no substantial structural deterioration does not promise the building will stay problem free, and it does not replace your own unit inspection. A SIRS is an estimate, and estimates move with construction costs.

It also does not mean every older condo is a financing problem. Plenty of Boca Raton and Palm Beach County buildings completed their inspections, funded their reserves, and finance normally. The point is to read the record instead of assuming either outcome.

Frequently Asked Questions

Does a 30-year-old condo automatically need a milestone inspection?

Only if it is a condominium or cooperative building with three or more habitable stories and the certificate of occupancy shows it has reached the trigger age. Smaller residential buildings are excluded. In some jurisdictions the local building department applies a 25-year trigger based on proximity to salt water, so confirm the schedule locally.

Can the association vote to skip funding the reserve study?

For the items the study covers, the statute requires reserves to be maintained and does not allow the association to waive them. A transition rule allowed some budgets adopted before the end of 2024 to fund less than recommended, but that path has closed for later budgets.

Will a special assessment stop my loan from closing?

Not automatically. It depends on what the assessment pays for, whether the work is a critical repair, and whether it is already funded or being collected. A special assessment for routine capital work handled within the project’s guidelines is treated differently from one covering an unremediated structural repair.

Can I buy a condo that failed its milestone inspection?

A project that failed a mandatory structural inspection is ineligible for standard agency financing until the repairs are completed and documented. Some buyers wait for the work to be finished. Others use non-agency financing or choose another building. The right answer depends on the scope of repairs and your timeline.

Do FHA and VA loans use the same project rules?

No. FHA and VA each have their own project approval or review processes, and they do not track Fannie Mae’s project standards line for line. A building that works for one program may not work for another, which is one reason to compare programs before you fall in love with a unit.

Where can I confirm a building’s inspection schedule?

Start with the city or county building department that enforces the Florida Building Code for that address, and with the association’s posted records. The Department of Business and Professional Regulation also publishes condominium guidance and reporting information.

Next Steps

If you are considering a condo in Boca Raton, Delray Beach, Boynton Beach, or elsewhere in Palm Beach County, we can review the project documents alongside your pre-approval so you know how the building’s inspection and reserve history affects your financing before you are under contract. That conversation is usually cheaper than discovering the issue during underwriting.

Get pre-approved with MJS Financial, or run your numbers with our mortgage calculator to see how HOA dues affect the payment. If you are still deciding between loan types, our conventional loan page covers the standard project review path. Call MJS Financial at 561-212-0002 to talk through a specific building.

This article is general information for Florida buyers, not legal advice or a promise of financing. Project eligibility rules, statutes, and local requirements change. Confirm current requirements with the association, the local building department, and your lender before you rely on them.

Buyers who assume the lender’s policy covers them sometimes skip the owner’s policy. That is the mistake this article is meant to prevent.

What title insurance covers

Title insurance protects an owner or a lender against loss from defects in title that existed before the policy took effect. The Florida Department of Financial Services lists the common examples: a prior mortgage that was never paid off, judgment liens, tax liens, environmental liens, forged or improperly recorded deeds, missing heirs, and recording errors.

Two features separate it from homeowners insurance:

• You pay once at closing. There is no annual premium, and an owner’s policy does not expire.
• It looks backward. It covers problems already in the chain of title, not storm damage or a lien you take on later.

It also pays for legal defense if someone challenges your ownership, which is a large part of what you are buying.

The lender’s policy protects the lender, not you

Your lender requires a lender’s policy, also called a mortgagee policy, because the home is collateral for the loan. The insured is the lender. The coverage amount is tied to the loan balance, and Florida’s rate rule allows a mortgage policy to be issued for up to 25 percent above the principal debt to cover interest and foreclosure costs.

The policy ends when the loan is paid off. If a title defect surfaces and the lender suffers a loss, the insurer pays the lender. The Department of Financial Services states it plainly: the loan policy provides no protection for a buyer.

You often pay for this policy as part of your closing costs even though you are not the insured. That is not a reason to refuse it. It is a reason to also buy the policy that covers you.

The owner’s policy protects your equity

An owner’s policy names you as the insured, usually for the purchase price, which the state describes as the full insurable value of the property. It stays in force for as long as you or your heirs own the home, and it does not need to be renewed.

That matters in a market like Boca Raton, where a down payment plus years of appreciation can add up to far more than the remaining loan balance. A lender’s policy would cover the bank’s exposure and leave the rest of your equity uninsured.

If you pay cash there is no lender’s policy at all. The owner’s policy is then the only title coverage in the transaction, and it is still worth pricing before you decide to skip it.

Why the second policy costs so little

Florida sets title premiums by rule rather than leaving the base rate to each agency to negotiate. Rule 69O-186.003, Florida Administrative Code, sets the premium for a given amount of coverage, so the base rate is the same regardless of which agency or underwriter you use.

The rule also includes a simultaneous issue rate. When an owner’s policy and a lender’s policy are issued at the same time, from the same insurer, for the same property, the lender’s policy is priced at a small fraction of what a stand-alone policy would cost, up to the amount of the owner’s policy. Any lender coverage above the owner’s policy amount is priced at the regular rate.

What does vary between agencies is everything around the premium: endorsements, title search charges, closing and escrow fees, and the work needed to clear problems found in the search. Those are worth comparing. The premium itself is not.

Who pays for title insurance in Florida

Florida law does not assign the cost. The purchase contract does. Many Florida contracts place the owner’s policy on the seller and the lender’s policy on the buyer, but that split is negotiable and it is not identical in every contract or county.

Two practical rules follow from that:

• Whoever pays the premium gets the first choice of closing and title agent, subject to the lender’s approval. The Department of Financial Services states this directly, and it explains why the payer often controls the closing.
• The negotiation belongs in the contract, not at the closing table. If you want the seller to cover the owner’s policy, put it in writing before you sign.

Buyers sometimes trade a small price reduction for the seller’s agreement to cover the policy. Run both versions of the numbers. A credit toward closing costs can be more useful than a slightly lower price, and it leaves the purchase price, and therefore the loan amount, where they were.

What the title commitment shows before closing

The title agent issues a commitment before closing, and two parts of it matter to a buyer:

• Requirements: items that must be cleared before the policy can be issued, such as paying off the seller’s mortgage, releasing an old lien, or documenting an estate.
• Exceptions: items the policy will not cover, such as recorded easements, deed restrictions, and the declaration of condominium.

Read the exceptions before your inspection period ends. Some are normal, like a utility easement along the rear of a lot. Others deserve a question, like a broad restriction on rentals, an open boundary dispute, or a right of way that cuts across the property. If an exception concerns you, ask whether a survey or an endorsement can address it, and get the answer in writing.

Florida issues that come up in title work

Condominiums

The declaration of condominium and its amendments appear as exceptions. Title insurance does not evaluate the association’s finances or the building’s condition. That is a separate project review your lender performs, and a clean title report and an eligible condo project are two different approvals.

Association liens and estoppels

Unpaid condominium or HOA assessments can become a lien on the property. Closings normally include an estoppel certificate from the association stating what is owed as of a given date, and the title agent uses it to clear the association’s claim.

Reissue pricing

If the seller bought recently and still has their owner’s policy, ask the title agent whether a reissue rate applies. Florida’s rate rule provides lower reissue premiums in defined situations, and it requires documentation of the prior policy, so the question is worth asking early.

Estates, trusts, and name issues

Sales out of probate, a trust, or a divorce decree often add requirements: a court order, a death certificate, a corrected deed. These are solvable, but they take time, which is why title work should start as soon as the contract is signed.

What title insurance does not cover

• Problems created after closing, such as a new lien, a later HELOC that needs its own lender’s policy, or unpaid taxes.
• Zoning, land use, and building code compliance, which are separate diligence items.
• The physical condition of the property, the roof, or the building’s structure.
• Matters listed as exceptions in your policy.

That last item deserves a careful read. The exceptions page defines coverage as much as the insuring clauses do.

Where it fits in your mortgage file

Your lender will require clear title and a lender’s policy before closing. The title agent also handles the payoff of the seller’s loan, the recording of the deed and mortgage, and the disbursement of funds. When a title problem appears, closing dates move, which is why it helps to have the contract and the commitment reviewed early.

On your Loan Estimate, title services appear in the closing cost details, and the owner’s policy is usually listed as an optional item. Seeing it labeled optional can tempt a buyer to decline it. Price it against the equity you are protecting before deciding.

A short checklist before you sign

• Confirm who pays for the owner’s policy and who pays for the lender’s policy, and make sure the contract says so.
• Ask for the title commitment as early as the contract allows, and read the exceptions.
• Ask whether a reissue rate or another rate reduction applies.
• Compare agency fees for search, closing, and endorsements, not just the premium.
• Decide on the owner’s policy before closing. Adding one afterward is not a standard option.

Frequently asked questions

Does the lender’s policy protect me if a title problem appears?

No. It protects the lender up to the loan balance. Your equity is only covered by an owner’s policy.

Am I required to buy an owner’s policy?

No. Neither Florida law nor your lender requires it. Most buyers are advised to buy it because the lender’s policy provides them no direct protection.

Can I choose the title company?

Usually yes, but the contract and the payer’s right of first choice affect who selects the agency, and your lender has to approve it.

Is title insurance required on a refinance?

The new lender will require a lender’s policy. An owner’s policy is optional, and reissue pricing may be available if the property was insured recently.

Does title insurance cover a condo special assessment?

No. It covers defects in title, not the association’s finances or assessments approved after closing. Those are reviewed in the condo project review, not the title search.

If the seller pays for the owner’s policy, do I still get the coverage?

Yes. The policy insures you as the owner even when the seller paid the premium, as long as you are named as the insured.

Next step

Title insurance is one line in a much longer closing cost picture. Before you write an offer in Boca Raton or anywhere in Palm Beach County, it helps to know your numbers and your loan options. Start a pre-approval with MJS Financial, or run a quick estimate with our mortgage calculator. If you are comparing loan programs, we can walk through conventional loan options and the closing costs that come with each.

This guide explains what the exemption covers in 2026, who qualifies, how the March 1 deadline works, and how portability moves an assessment benefit from one home to the next. It closes with the one item on the November 2026 ballot that could change the math, labeled clearly as a proposal.

What the Florida homestead exemption actually does

Florida’s homestead exemption does not make your property tax bill disappear. It reduces the assessed value that your tax rate is applied to. There are two pieces, and they do not apply to the same taxes.

• First $25,000. Applies to all property taxes, including school district taxes.
• Second piece, up to $26,411 for the 2026 tax year. Applies only to non-school taxes, which covers county, city, and most other local levies. It applies to assessed value above $50,000.

For 2026, that works out to a maximum homestead exemption of about $51,411 on a property assessed high enough to capture all of it. The second piece is adjusted each January 1 by the Consumer Price Index, so the number changes year to year. It was $25,000 in the 2024 base year, $25,722 for 2025, and $26,411 for 2026.

That CPI adjustment is worth understanding, because a lot of older articles still describe a flat “$50,000 exemption.” The structure is the same, but the exact dollar figure moves.

Who qualifies for homestead in Florida

The test is specific, and it is applied as of January 1 of the tax year:

• You hold legal title or beneficial title in equity to the property on January 1.
• The property is your permanent residence, not a rental, a second home, or an occasional stay.
• You are a Florida resident and have established residency, which usually means a Florida driver license, voter registration, and filing Florida returns.
• You file an application with the county property appraiser by March 1.

You cannot claim homestead on two properties. If you rent out the home, or stop living in it as your permanent residence, the exemption no longer applies and you are expected to notify the property appraiser. The penalty side is real: a property appraiser who finds an improper exemption can place a lien, and Florida law provides for a 50 percent penalty on the unpaid taxes plus 15 percent interest per year in cases that are not the appraiser’s own clerical error.

The March 1 deadline, and why a mid-year purchase waits

Homestead applications are due March 1 of the tax year you want the exemption for, using Form DR-501 through your county property appraiser. In Palm Beach County, that is the Property Appraiser’s office in West Palm Beach, and the application can be filed online, by mail, or in person.

The timing trips up a lot of buyers. Eligibility is measured on January 1. If you close on a home in June, you were not the owner on January 1 of that year, so the first tax year you can claim is the following one, and your application is due March 1 of that following year. That is not a lost benefit, just a delayed one.

Once granted, the exemption generally continues year to year while you still own and occupy the home and still qualify. You do not refile annually. You do need to update the property appraiser when your situation changes, including a move, a change in ownership, or a change in how the property is used.

If you miss March 1, call the property appraiser’s office immediately and ask what options exist. Do not assume a late filing will be accepted, and do not assume the exemption is automatic because the prior owner had one. A homestead exemption belongs to the owner, not to the house. When a homesteaded property sells, the exemption comes off the roll.

Save Our Homes: the cap that creates the benefit

Once a property has homestead, Florida limits how fast its assessed value can rise. Beginning the year after the exemption is granted, the assessed value cannot increase more than 3 percent per year or the change in the Consumer Price Index, whichever is lower. The assessed value can never exceed just value, which is the county’s estimate of market value.

In a market where values climb faster than 3 percent, that cap creates a gap between just value and assessed value. The gap is the Save Our Homes benefit. It is not a credit and it does not show up as a line item, but it is the reason a long-time owner’s tax bill can look nothing like a new neighbor’s bill on a similar house.

That gap resets when the property changes ownership. Under Florida law, a homestead property is reassessed at just value as of January 1 of the year following a change of ownership, and the Save Our Homes benefit is lost for that property. The new owner starts fresh, which is exactly why a buyer’s first full tax bill can jump well above what the seller was paying.

Portability: what actually moves when you move

Here is the part most homeowners get wrong. The homestead exemption itself is not transferable. You cannot carry your $51,411 to a new house as an exemption. What can move is the Save Our Homes assessment difference, the gap between just value and assessed value on your old home.

The mechanics:

• Form DR-501T, Transfer of Homestead Assessment Difference, filed together with the homestead application on the new home.
• Up to $500,000 of accumulated assessment difference can transfer.
• Three-year window. You must establish homestead on the new Florida home within three years of January 1 of the year you abandoned the old homestead. The clock runs from abandonment, not from the closing date, and not from the date the sale recorded.
• Any Florida county. The old homestead does not have to be in Palm Beach County. Portability works from any Florida homestead to any other.
• March 1 deadline applies here too. The transfer is filed by March 1 of the year you want it to take effect.

Note the trap in the three-year rule. If you move out in July but do not sell until February of the following year, the abandonment date controls, so part of your window is already gone before the closing. Selling late in a calendar year can compress the practical window to close to two years.

Upsizing: buying a home of equal or greater value

If the new home’s just value is equal to or greater than the old home’s just value, the full assessment difference transfers, up to the $500,000 cap.

Illustration: old home just value $450,000, assessed value $300,000, so the benefit is $150,000. New home just value $600,000. The new assessed value becomes $600,000 minus $150,000, or $450,000, before exemptions are applied.

Downsizing: buying a home of lower value

If the new home is worth less, you transfer a proportional share of the benefit, based on the ratio of new just value to old just value.

Illustration: same old home, benefit of $150,000. New home just value $300,000, which is 66.67 percent of $450,000. The transferable benefit is about $100,000, and the new assessed value becomes $200,000 before exemptions.

What that is worth in dollars depends on your millage. As a rough illustration only, if your combined non-school millage were 15 mills, $100,000 of protected value would be about $1,500 a year. Your actual millage is printed on your TRIM notice, and school levies are not affected by this part of the calculation.

Each county property appraiser publishes a portability estimator. Palm Beach County has one, and it is worth running your actual numbers through it before you commit to a purchase price.

How this affects your mortgage, not just your taxes

Three practical points for borrowers:

• Your escrow estimate may start low. Lenders generally estimate property taxes from the current tax bill, and if the seller was homesteaded with a large Save Our Homes benefit, that bill can be far below what you will owe once the property resets to just value. A first-year escrow shortage is common in that situation.
• Plan for the reset, not the current bill. Ask what the property would be assessed at without the seller’s benefit, and budget from that number. It is better to qualify on the realistic figure than to be surprised by a payment increase 14 months after closing.
• File early after you close. A homestead application does not change your mortgage terms, but it does change your tax bill, and getting it filed and confirmed removes one variable from your escrow analysis.

Portability also matters on the financing side when you buy before you sell. You can own two homes for a while, but you can only homestead one, and the portability filing depends on establishing homestead on the new home within the window. Sequence the purchase, the sale, and the filing with your timeline in writing before you make an offer.

What is on the November 3, 2026 ballot

One item on the statewide ballot would change the exemption itself, and it is important to label it correctly: as of this writing it is a proposed constitutional amendment, not current law.

Amendment 3, whose ballot summary is titled “Increased Homestead Exemption; Lower Cap on Increases in Non-Homestead Property Assessments,” would raise the non-school homestead exemption to $150,000 in 2027 and $250,000 in 2028, indexed to inflation after that. It would leave school district levies on the existing $25,000 exemption, so school taxes would not drop. It would also lower the annual assessment cap for non-homestead property, such as rentals and second homes, from 10 percent to 5 percent. It would phase in the larger exemption for people who establish Florida residency after December 31, 2026, who would receive the existing exemption until their fifth year. It requires at least 60 percent voter approval and would take effect January 1, 2027 if it passes.

What that means for planning: do not build a 2027 budget on the $150,000 figure. If you are buying now, underwrite the current structure. If it passes, the exemption is applied by the property appraiser to properties that already carry homestead, so there would be nothing to opt into. This article will need a refresh after the vote either way.

Common mistakes to avoid

• Assuming the exemption transfers with the house. It does not. The prior owner’s exemption comes off the roll.
• Assuming portability is automatic. It requires Form DR-501T, filed with the homestead application, by March 1.
• Counting the three-year window from the closing date instead of from January 1 of the year of abandonment.
• Filing homestead on a home you intend to rent out, or keeping homestead on a home you have moved out of.
• Budgeting taxes on the seller’s bill instead of on a post-reset assessment.

Frequently asked questions

Does my homestead exemption move to my new Florida home?

No. The exemption is tied to the property and the owner’s occupancy. What can move is the Save Our Homes assessment difference, up to $500,000, if you file Form DR-501T with a new homestead application within the three-year window.

Can I get portability from an out-of-state home?

No. Portability applies only to a previous Florida homestead.

Can I claim homestead on two homes in Florida?

No. One permanent residence, one homestead exemption. Claiming it on a property you do not occupy as your permanent residence can lead to back taxes, penalties, and interest.

What if I miss the March 1 deadline?

Contact the county property appraiser right away. Options depend on the county and the circumstances, and a missed deadline can mean waiting until the following tax year.

Do I have to reapply every year?

Generally no. The exemption continues while you still own and occupy the home and still qualify. You must notify the property appraiser when your situation changes.

Will the 2026 ballot amendment lower my school taxes?

No. As written, the expanded exemption would apply to non-school levies only. The $25,000 exemption against school district taxes would stay in place.

Next step

If you are buying in Boca Raton or anywhere in Palm Beach County, the tax side of the purchase deserves the same attention as the rate. We can walk through what a property’s taxes are likely to look like after closing, how homestead timing lines up with your closing date, and what that does to your monthly payment.

Start a pre-approval with MJS Financial, or run your payment scenarios in the mortgage calculator and then compare them against current Florida mortgage rates. If you are weighing a move within the state, conventional loan options are usually the starting point for a straightforward primary residence purchase.

This article is general information about Florida property tax rules, not tax or legal advice. County property appraisers make the final determination on exemptions and portability. Confirm your specific situation with the property appraiser and your tax advisor.

This is not a reason to avoid buying during the season. It is a reason to treat insurance as a week one task instead of a week four task.

Why flood insurance shows up in a mortgage file at all

Lenders that are federally regulated or federally insured follow the Flood Disaster Protection Act. If the building securing the loan sits in a Special Flood Hazard Area, coverage must be in place for the term of the loan. The required amount is at least the lesser of the outstanding principal balance or the maximum coverage available for that property type under the National Flood Insurance Program. The land itself is not insured.

The Special Flood Hazard Area is the zone family that starts with A or V, which includes AE, A1 to A30, AO, AH, and VE. Zone X is outside it. Your lender documents the result on FEMA’s Standard Flood Hazard Determination Form, which is retained for as long as the loan is held.

The NFIP’s standard residential limits are $250,000 for the building and $100,000 for contents. On a higher-value home in coastal Boca Raton, that gap between the loan amount and the NFIP limit is where private flood coverage, or a combination of both, usually enters the conversation. For the underlying requirement in more detail, see our guide to Florida flood insurance and mortgage requirements.

What a Zone AE result actually means for your closing

The flood determination is ordered early in the file, well before an appraiser sets foot in the house. It is a data product based on FEMA’s maps, not an inspection. That matters for two reasons.

First, it can be wrong in either direction. A building can sit on high ground inside a mapped flood zone, or a map panel can be out of date relative to current flood insurance rate maps.

Second, correcting it takes time. A Letter of Map Amendment from FEMA can support the position that the building is not in the Special Flood Hazard Area. It requires an elevation certificate, an application, and FEMA review. Your lender makes the final credit decision and may still require coverage in the meantime. Do not build a closing date around a letter you have not received yet.

Ask your loan officer for the determination in writing at application. Knowing the zone in week one is what allows you to price coverage, budget the payment, and renegotiate if the number is unworkable.

The 30-day NFIP wait, and the exception that saves closings

New NFIP policies generally take effect 30 days after purchase. For a buyer under contract, that sounds like a problem.

It usually is not, because the NFIP Flood Insurance Manual provides a loan exception. When coverage is purchased in connection with making, extending, increasing, or renewing a loan secured by the property, the waiting period does not apply if the application is submitted on or before the closing date and the premium reaches the insurer within the required window. Coverage then takes effect at the time of loan closing.

That window is the detail that causes trouble. It differs depending on who pays the premium. When the lender, title company, or settlement attorney pays, the insurer must receive the application and full amount due within 30 calendar days of closing. When the borrower pays, the window is 10 calendar days. Miss it and the effective date slides to the 30th day after receipt, which can put coverage after your closing date.

Practical version: never plan to bind flood coverage on the morning of closing. Get the application in and the premium paid days ahead, and confirm in writing that the declarations page shows the effective date you need.

If you are buying a condominium, the association’s master flood policy may cover the building. Whether that satisfies your lender depends on the policy’s coverage relative to the loan and the unit, so send the master certificate to your loan officer as soon as you have it.

Storm binding suspensions: the rule that stops a closing cold

This is the part buyers learn about too late. When a tropical storm or hurricane watch or warning is issued for any part of Florida, Citizens Property Insurance stops accepting new policies and stops increasing coverage on existing ones. The restriction applies regardless of the requested effective date. A watch anywhere in the state is enough to trigger it, not just a warning for your county.

Private carriers set their own rules. Many of them impose moratoriums as a named storm approaches, and both the trigger and the timing vary by company. Some stop at a named storm, some at a watch or warning, and there is no standard moment when the pause lifts.

During a suspension, a quote is not coverage. Your agent cannot bind a new homeowners policy or raise limits until the carrier lifts the restriction. Since the lender will not fund without evidence that required coverage is in force, an unbound policy becomes a delayed closing.

Flood coverage generally does not shut down the same way that homeowners carriers do, because the NFIP is a federal program. The 30-day waiting period, not a moratorium, is the constraint there. But if your loan requires both a homeowners policy and flood coverage, both have to be in place before funding.

Your escrow account will probably include flood

For designated residential loans made on or after January 1, 2016, federal rules require flood insurance premiums and fees to be escrowed and paid with the same frequency as the mortgage payment. The exceptions are specific: loans primarily for business, commercial, or agricultural purposes, subordinate liens, coverage paid by a condominium or homeowners association as a common expense, home equity lines of credit, and nonperforming loans.

In plain terms, most South Florida buyers in a flood zone should expect the flood premium to be divided into twelve and added to the monthly payment, with the first year collected at closing. Ask for that number before you remove your inspection contingency, not after. A flood premium that arrives late can change your debt-to-income picture enough to matter.

What happens if coverage lapses after closing

Servicers monitor flood coverage for the life of the loan. If the policy lapses or the coverage amount falls below the required level, the servicer notifies you and gives you time to obtain coverage, generally 45 days. If you do not, the servicer may buy coverage and charge you for it.

Lender-placed flood insurance typically costs more than a policy you shop for yourself and may provide less coverage. The fix is boring and effective: keep the policy paid, and send the renewal declarations page to your servicer when it arrives.

Elevation certificates, private flood, and the cost question

An elevation certificate documents the building’s elevation relative to the base flood elevation. Insurers use it to rate a policy accurately, and some properties need one before a firm quote is possible. Ordering a new certificate takes time and requires access to the property, so ask early whether one already exists. Sellers sometimes have one on file from a prior purchase or claim.

Private flood insurance is a real option on higher-value homes and on properties where the NFIP limit is too low. Federal rules require lenders to accept a private policy that meets the statutory definition of private flood insurance and the coverage requirements, and lenders may also accept other private policies at their discretion. If your lender has additional review steps for private policies, those steps take time. Start that conversation in week one, and check that the private policy covers the peril in a way your lender will accept, including any waiting period the carrier applies.

Florida now requires a flood disclosure before contract

Since October 1, 2024, Florida law has required a seller of residential real property to give the buyer a written flood disclosure at or before the time the sales contract is executed. Section 689.302, Florida Statutes, sets the form and the three questions: whether the seller has knowledge of flooding that damaged the property during their ownership, whether the seller has filed an insurance claim for flood damage including an NFIP claim, and whether the seller has received assistance for flood damage.

The definition of flooding is broader than storm surge. It includes the overflow of inland or tidal waters, unusual and rapid accumulation of runoff or surface water, and sustained standing water from rainfall. A property outside a mapped flood zone can still have a flood history.

Read that disclosure before your inspection period ends. If it shows a prior claim or known flooding, get insurance quotes on that specific address before you are locked in, and ask your agent how the claim history affects eligibility and pricing.

If a storm arrives between contract and closing

Three things can collide: insurance binding, property condition, and your rate lock.

On insurance, the sequence matters. Find out whether your carrier has suspended binding before you assume a closing date still works. If binding is suspended, the closing moves, and your agent’s ability to bind is restored only when the carrier lifts the restriction.

On the contract, the standard Florida Realtors and Florida Bar residential contract includes a force majeure paragraph that can extend deadlines when an event outside the parties’ control prevents performance. The wording depends on the version of the contract and any addenda, so read your actual contract and talk to your agent or attorney about notices rather than relying on a general summary.

On property condition, damage between contract and closing is addressed in the contract, and a lender may require a re-inspection or an updated appraisal if the property is damaged. Do the final walk-through after the storm passes, not before.

On your rate lock, a delay caused by insurance can outlast the lock period. Ask what an extension costs before you need one, so a short delay does not turn into a pricing surprise.

A workable timeline for a seasonal closing

• At application: request the flood determination in writing and confirm the zone and whether the building is in a Special Flood Hazard Area.
• Same week: get homeowners and flood quotes on that exact address, and ask your agent whether an elevation certificate exists.
• Before your inspection period ends: review the seller’s flood disclosure, and get the condo master flood certificate if you are buying a unit.
• Two weeks before closing: confirm the binder is issued and the premium is paid, and send the declarations page and paid receipt to your loan officer.
• Week of closing: confirm the escrow figures and the first year premium collection, and make sure nothing has lapsed or been endorsed.
• When a watch goes up: call your agent that day. Do not wait to see where the storm is forecast to go.

Bottom line

Hurricane season does not have to derail a South Florida purchase. What derails it is finding out in the last week that the flood zone requires coverage you have not priced, or that your carrier stopped binding when a watch was issued for a county three hundred miles away. Order the determination, price both policies, pay the premium early, and keep your loan officer and agent talking to each other.

If you are under contract and want a second set of eyes on how insurance and flood requirements affect your timeline, start a pre-approval with MJS Financial or call 561-212-0002. You can also run payment scenarios that include taxes and insurance in our mortgage calculator.

FAQ

Does my homeowners policy cover flood damage?

No. Homeowners policies generally exclude flood, which is why flood coverage is a separate policy. Florida’s own disclosure form states this directly to buyers.

Can I close during a hurricane watch if my flood policy is in place?

Only if every coverage your loan requires is bound. If the lender requires a homeowners policy and binding is suspended, the closing generally waits until the restriction lifts, regardless of the flood policy status.

Do I always have to wait 30 days for flood insurance to start?

No. The 30-day waiting period is the general rule, but there is a loan exception when coverage is purchased in connection with a mortgage, provided the application is submitted by the closing date and the premium reaches the insurer inside the required window.

My flood zone is X. Do I need flood insurance?

Lenders generally do not require it outside a Special Flood Hazard Area. Coverage can still make sense, and some loan programs or lenders apply their own requirements, so ask rather than assume.

Will my flood premium be escrowed?

For most designated residential loans made since January 1, 2016, yes. Specific exceptions exist, including business purpose loans, subordinate liens, association-paid master policies, HELOCs, and nonperforming loans.

Can I use a private flood policy instead of the NFIP?

Often yes. Lenders must accept private policies that meet the federal definition and the required coverage amount, and may accept others at their discretion. Confirm your lender’s process early, because review adds time.

Why your tax return and your cash flow tell different stories

Loans that follow agency guidelines, including conventional loans sold to Fannie Mae or Freddie Mac, plus FHA and VA loans, calculate self-employed income from federal tax returns and supporting business records. Fannie Mae treats anyone with a 25% or greater ownership interest in a business as self-employed and generally requires a two year history. The qualifying number is not gross receipts. It comes from business income after expenses, adjusted for items like depreciation, and then divided down to a monthly figure.

That is where the mismatch starts. Every legitimate write-off, whether it is equipment, mileage, a home office, or a depreciation deduction, reduces taxable income. Lower taxable income is useful in April. It is a problem at mortgage time, because income-based underwriting uses the lower number. A business owner with strong deposits and aggressive but perfectly legal deductions can look poor on paper and profitable in the bank.

If your returns already support the loan amount you need, start there. An agency loan or a jumbo loan usually costs less than a non-QM program. If they do not, you have alternatives, and a bank statement loan is one of them.

What a bank statement loan actually is

A bank statement loan is a non-QM mortgage. Instead of calculating income from tax returns, the lender reviews 12 or 24 months of bank statements, identifies eligible deposits, and converts them into qualifying income using its own formula. These loans are not sold to Fannie Mae or Freddie Mac, and they are not FHA or VA loans. Each lender publishes its own guidelines covering how deposits are counted, which expense factor applies, minimum credit scores, maximum loan to value, and reserves. Bank statement programs sit inside the wider group of non-QM mortgage options, which also includes approaches such as asset depletion for borrowers whose strength is in savings rather than income.

The name does not mean the loan is unsupervised. For consumer purpose mortgages, federal law requires the lender to make a reasonable, good faith determination that you are able to repay, and the lender documents income, debts, assets, and the property. A bank statement loan changes which document proves your income. It does not remove credit, asset, appraisal, or property review.

Loan size is one practical advantage. The 2026 conforming loan limit for a one unit property in Palm Beach County is $832,750, according to FHFA, and loan amounts above that are jumbo. Non-QM programs are not bound by the conforming limit, so they can finance amounts above it, depending on the lender and the program.

How lenders turn deposits into qualifying income

Business statements. The most common approach. The lender totals eligible deposits over the statement period, averages them monthly, then applies an expense factor to account for the cost of running the business. A 50% expense factor is a common program default, and some lenders apply a higher factor to industries that typically run thinner margins. If your real expenses are lower than the default, many lenders will accept a letter from your CPA, tax preparer, or bookkeeping service stating your actual expense ratio, which can raise qualifying income substantially.

Here is the math. Average monthly business deposits of $40,000 at a 50% expense factor produce $20,000 a month of qualifying income. The same deposits with documentation supporting a 35% expense ratio produce $26,000 a month. Same money, same statements, a very different loan amount.

Personal statements. Some programs use personal bank statements instead of business statements, typically with a much smaller deduction from deposits, and usually with a requirement that the deposits can be traced to your business or another recurring source. If you pay yourself by moving money from the business account to your personal account, expect to provide both sides.

What gets excluded. Transfers between your own accounts, loan proceeds, tax refunds, one time windfalls, and large deposits with no paper trail. Lenders also care about behavior over time. A steady or growing deposit pattern supports the file. A declining trend invites questions, and returned items or overdrafts need an explanation.

12 months or 24 months of statements?

Both options exist, and the choice changes your numbers. A 24 month program shows two full business cycles, and lenders often reward that with better pricing or a higher loan to value. A 12 month program can be the better path when your business grew recently, or when you started within the past two years and want your strongest months counted instead of being averaged against older, lower ones. Ask for both calculations before you commit to a program, because the answer is not always obvious.

What else the underwriter reviews

• Credit history. Minimum scores differ by program. Publicly posted non-QM program summaries we reviewed in October 2026 commonly list minimum credit scores around 640, with better pricing and higher loan to value options at higher scores. A larger down payment can offset a lower score on some programs.
• Loan to value. Many bank statement programs top out around 80% for a primary residence, with less financing available for lower scores, a 12 month statement option, or an investment property. A few programs stretch higher with strong credit.
• Reserves. Cash left over after closing, usually measured in months of the new housing payment. Bigger loan amounts generally require more reserves.
• Self-employment history. Two years is the norm. Some programs accept 12 months when you were working in the same industry before going out on your own.
• The property. Appraisal, condition, insurance, and Florida specific details can decide the file. Roof age can raise insurability questions early, and a flood zone can change your closing costs. Reviewing both before you make an offer saves time later.

What a bank statement loan costs

Bank statement programs are non-QM loans, and non-QM pricing generally carries a higher rate and higher fees than agency loans. Some programs offer interest only payments, which lowers the monthly payment but does not build equity. Ask for a Loan Estimate so you can compare the payment, the annual percentage rate, and the total cost of credit, and ask what the same loan would cost if you could qualify on tax returns. That comparison is the honest way to decide whether the tradeoff is worth it.

On consumer purpose mortgages, federal rules tightly restrict prepayment penalties. A penalty is permitted only in narrow circumstances, is capped at 2% of the prepaid balance during the first two years and 1% during the third year, and cannot run past three years. Investment property loans made for business purposes are not covered by those same rules, which is one reason prepayment penalties come up more often in investor lending than on a primary residence.

When a bank statement loan is not the best tool

• If your tax returns support the income you need, an agency or jumbo loan usually costs less.
• If the subject property is a rental, a DSCR loan may fit better because it focuses on the rent rather than your personal income.
• If you have significant assets and modest taxable income, an asset depletion approach may work better.
• If your business had one unusually strong year, ask whether a profit and loss statement program or waiting for the next filed return gets you better terms.
• If you are comparing several ways to document business income, it helps to see them side by side before choosing.

What to gather before you apply

• 12 or 24 months of statements for every business and personal account you want counted, including all pages
• Year to date profit and loss statement
• Two years of personal and business tax returns, since most bank statement lenders still collect them
• A letter from your CPA, tax preparer, or bookkeeper if you want a lower expense factor applied
• Business license and entity documents, plus a way to confirm the business is active
• Asset statements for the down payment, closing costs, and reserves
• Purchase contract or refinance details, and the current mortgage statement if refinancing

The more of this you assemble up front, the fewer rounds of conditions later. Small documentation gaps are the most common reason a self-employed file slows down.

How MJS Financial works with self-employed Florida borrowers

Bank statement guidelines are set lender by lender, and the differences decide deals. Two lenders can analyze the same 24 months of statements and reach different qualifying income, different maximum loan to value, or different reserve requirements. One wholesaler’s current grid may be stricter than the last one you saw. Working with a Florida mortgage broker who can run your file through several non-QM lenders answers those questions instead of guessing. MJS Financial is a Boca Raton mortgage brokerage serving borrowers across Palm Beach County and Florida, and you can reach the office at 561-212-0002.

Before you pick a program, it helps to know your alternatives. You can review current mortgage rates, run a payment on the mortgage calculator, and when you are ready, start a pre-approval so we can compare the bank statement route against everything else available to you.

Frequently asked questions

Do I need 12 or 24 months of bank statements?

Both options exist with most lenders. The 24 month option shows two full cycles and often unlocks better terms. The 12 month option is useful when your business grew recently or started within the past two years, because it counts your strongest recent months instead of averaging in older ones. Ask for both calculations.

Can I use personal bank statements instead of business statements?

Some lenders allow it, usually with a much smaller deduction from deposits than a business statement program applies, and usually with a requirement that the deposits can be tied to your business income. If you transfer money from your business account to your personal account, plan on providing both sets of statements.

What credit score do I need for a bank statement loan?

It varies by lender and program. Minimum credit scores in the 600s are common, and higher scores typically open up higher loan to value options and better pricing. On some programs a larger down payment helps offset a lower score.

Is a bank statement loan the same as a stated income or no doc loan?

No. You still document income, debts, and assets, the property is appraised, and the lender must still determine that you can repay the loan. The difference is which document provides the income evidence.

Are bank statement loan rates higher than a regular mortgage?

Generally yes. Bank statement loans are non-QM, and non-QM pricing is typically higher than agency pricing. Ask for a current quote and a Loan Estimate so you can compare your options side by side instead of assuming a specific spread.

Can I refinance into a conventional loan later?

Many borrowers do once their tax returns show enough income, subject to credit, income, property, and program requirements at that time. Timing and eligibility are not guaranteed, and seasoning requirements may apply.

Sources

• CFPB, Ability to repay and qualified mortgages (ATR/QM)
• CFPB final rule, General QM loan definition (price based), 85 FR 86308
• 12 CFR 1026.43, Regulation Z ability to repay and prepayment penalty limits
• FHFA conforming loan limit values, including the 2026 one unit limit of $832,750 for Palm Beach County
• Fannie Mae Selling Guide B3-3.5-01, Underwriting Factors and Documentation for a Self-Employed Borrower

Bank statement program terms vary by lender and change over time. The program details described above, including expense factor defaults and credit score ranges, reflect publicly posted non-QM lender guidelines reviewed in October 2026. They are examples of how these programs are structured, not MJS Financial requirements or approval standards. Guidelines are confirmed at the time of application.

A lender will not fund a purchase without proof that the property is insured, and coverage is normally expected to stay in place after closing. If no carrier will write a policy on the home because of the roof, the loan cannot close, no matter how strong the borrower’s file looks. Buyers, sellers, and agents then spend weeks solving a problem that could have been spotted during the inspection period.

Older homes and older buildings in Boca Raton, Delray Beach, Boynton Beach, and the rest of Palm Beach County are where this shows up most. Roof age, roof condition, remaining useful life, and the paperwork that documents all three are usually the real issue behind the delay.

What Florida Law Says About Roof Age

Florida law limits how far an insurer can go in refusing coverage based only on how old a roof is. The rules are in section 627.7011(5) of the Florida Statutes, and they apply to homeowners’ policies issued or renewed on or after July 1, 2022.

• Roof under 15 years old: An insurer may not refuse to issue or refuse to renew a homeowners policy solely because of the age of the roof.
• Roof 15 years old or older: The insurer must allow the homeowner to have a roof inspection performed by an authorized inspector at the homeowner’s expense before it can require a roof replacement as a condition of issuing or renewing the policy. If that inspection shows the roof has five years or more of useful life remaining, the insurer may not refuse to issue or renew based solely on roof age.
• How roof age is measured: From the last date that 100 percent of the roof surface was built or replaced under the building code in effect at that time, or from the initial date of a partial replacement when later partial replacements together covered 100 percent of the surface.
• Who may perform the inspection: A home inspector licensed under section 468.8314, a certified building code inspector, a licensed general, building, or residential contractor or roofing contractor, a licensed professional engineer, a licensed architect, or another person the insurer recognizes as qualified.

Read the limits of the statute too. The same section says it does not stop an insurer from rejecting or non-renewing an applicant when the structure does not meet the insurer’s underwriting criteria or for other lawful reasons. The law blocks refusals based on age alone. It does not force a carrier to insure a roof that is leaking, damaged, or in poor condition.

What Insurers Ask For in Practice

There is no single statewide roof rule that private carriers follow. Each insurer sets its own underwriting standards, and two companies can reach different conclusions about the same roof.

The clearest public benchmark comes from Citizens Property Insurance Corporation, the state-created insurer of last resort. Its published inspection requirements say:

• A four-point inspection is required for property owner, dwelling, and mobile home applications on properties more than 20 years old. The inspector checks the electrical system, plumbing, heating and cooling system, and roof, and reports the age, type, and condition of each.
• Roofs older than 25 years (soft coverings such as shingle) or 50 years (hard coverings such as tile, slate, clay, concrete, or metal) require documentation showing at least five years of remaining useful life.
• When a roof has less than five years of remaining useful life, the owner must provide proof of a full roof replacement before a policy is written.
• Serious hazards or deficiencies, such as exposed wiring or active leaks, should be repaired before an application is submitted.

Private carriers often use different age triggers or condition standards, and they can be stricter or more flexible than Citizens. That is why the answer to “will this roof be insurable” has to come from the carrier quoting the property, not from a general rule read online.

Three Roof Reports Buyers Hear About

These are different documents with different purposes, and mixing them up causes confusion.

• Four-point inspection: A condition report on four systems (roof, electrical, plumbing, and HVAC) that insurers use to decide whether to write a policy. It is not a full home inspection and not a warranty.
• Roof inspection: A focused roof condition report, sometimes on the insurer’s own form, documenting covering type, age, visible condition, and remaining useful life. For carriers that require proof of remaining life, this is often the document that decides the file.
• Wind mitigation inspection: Documents features that resist wind, such as roof shape, roof-to-wall connections, roof covering, secondary water barrier, and opening protection. It is generally used to calculate premium credits rather than to decide eligibility.

A full home inspection is a separate item, done for the buyer’s benefit, and it is not the same as any of the three above.

How the Roof Shows Up in the Mortgage File

Two separate reviews can be affected.

The insurance review

Before closing, the lender must verify that a valid policy exists and that it meets the loan program’s requirements. For loans sold to Fannie Mae, the current Selling Guide requires property insurance written on a “Special” coverage form or equivalent, including windstorm coverage for named storms. Coverage generally has to be on a replacement cost basis, with one exception: roofs must be insured, but they do not have to be insured on a replacement cost basis. The maximum deductible for required perils is 5 percent of the coverage amount, and where a policy has a separate windstorm deductible, that deductible also may not exceed 5 percent.

That detail matters in Florida. A carrier that agrees to cover an older roof on an actual cash value basis can still satisfy the insurance requirement, which means a roof may not have to be replaced simply to close. It also means a future claim may pay less than expected. Percentage hurricane or windstorm deductibles are common in Florida, and they can produce a much larger out of pocket number than a standard flat deductible.

The appraisal and condition review

An appraiser must report needed repairs and deferred maintenance, and must describe the property’s condition using a rating scale from C1 to C6. A C6 rating means the improvements have damage or deferred maintenance severe enough to affect safety, soundness, or structural integrity. Loans secured by C6 rated properties are not eligible for sale to Fannie Mae until the deficiencies are repaired and the rating is at least C5.

Roof problems are one of the classic reasons a file lands in that territory. A roof with active leaks, missing covering, soft decking, or damage that no longer protects the interior can move a purchase into a “subject to repairs” appraisal, which means the work has to be completed and documented before the loan funds.

Program rules also change. FHA rescinded several older appraisal protocols in Mortgagee Letter 2025-18, and the FHA Single Family Housing Policy Handbook is updated periodically. If you were told that a program “requires” a specific roof life or a mandatory professional roof inspection, ask the lender what that program requires today instead of relying on an older rule of thumb.

What to Check Before You Make an Offer

• Pull the roof permit history from the local building department and confirm whether the roof was fully or partially replaced, and when.
• Ask the seller or listing agent for the current insurance declarations page and any roof or four-point inspection reports already on file.
• Look for active leaks, water stains on ceilings, soft decking, missing or loose tiles or shingles, exposed fasteners, and sagging areas.
• Get your own insurance quote during the inspection period, not after the appraisal is ordered.
• Ask whether any carrier has already declined or non-renewed the property. If the seller has had trouble, that is useful information before you are committed.
• Decide in advance who pays if replacement is required: a seller credit, a price reduction, replacement before closing, or a repair escrow where the lender allows one.
• Review your loan options early. A roof that cannot be insured narrows your financing choices, and the insurance problem does not disappear just because a different loan program is used.

A practical habit is to treat the roof the way Florida buyers already treat flood zone status and flood insurance. Check it before you write the offer, and again during the inspection period, so no one is surprised at the end of the process.

Why Timing Matters More Than Buyers Expect

Insurance is often the last item on a buyer’s list, which is exactly why it becomes the item that delays closing. Roof inspections, four-point reports, carrier review, and any required repairs all take time, and on a purchase contract those tasks compete with the appraisal, title work, association documents, and the loan underwriter.

Start insurance shopping when the contract is signed, not when the lender says you are clear to close. If a roof needs attention, you want that discovery to happen inside the inspection period while you still have room to negotiate.

Frequently Asked Questions

Is a 25 year old shingle roof in Florida automatically uninsurable?

No. Florida law bars an insurer from refusing to issue or renew a policy based solely on roof age when the roof is less than 15 years old, and for roofs 15 years or older it gives the homeowner the right to an inspection. If that inspection shows at least five years of useful life remaining, the insurer may not refuse based solely on age. Carriers can still decline or set conditions based on the roof’s actual condition, because the statute does not override their underwriting standards.

Will I have to replace the roof before closing?

Not always. It depends on the carrier’s rules and the loan program. Some situations are solved with a price reduction, a seller credit, or a completed replacement before closing. Others require a repair or replacement condition to be satisfied before the loan funds. Ask your insurance agent and your lender to put their requirements in writing.

Does the roof have to be insured for replacement cost?

For loans sold to Fannie Mae, roofs must be insured but are not required to be insured on a replacement cost basis. Coverage on the rest of the dwelling is expected to be replacement cost. Individual lenders and loan programs can apply stricter requirements, so confirm the terms with your lender.

Do I need a four point inspection on a newer home?

Citizens requires a four-point inspection for homes more than 20 years old. Private carriers set their own triggers, and many ask for one at some point between 20 and 40 years. Ask the agent quoting your property which threshold applies.

Can a newer roof change my monthly payment?

A newer roof can make a policy easier to write and can improve wind mitigation credits, which may affect the premium and therefore the escrowed monthly payment. Premiums, credits, and escrow figures vary by property, carrier, and coverage choices, so no specific outcome should be assumed until you have a quote in hand.

Bottom Line

The roof is a financing issue in Florida, not just a maintenance item. Florida law gives owners real protection against age-only refusals, and some carriers will insure an older roof when an inspection documents remaining useful life. Condition, documentation, and carrier underwriting still decide the file, and the appraisal has its own standards that apply no matter what the insurance outcome is.

MJS Financial LLC helps Florida buyers and homeowners compare loan options and spot roof and insurance issues before they become closing problems. Start a Boca Raton mortgage pre-approval, run your numbers with the mortgage calculator, or call 561-212-0002 to talk through your situation. Current Boca Raton mortgage rates are available for comparison as well.

Where to Verify This Information

• Florida Statutes, section 627.7011, Homeowners’ policies; offer of replacement cost coverage and law and ordinance coverage, including subsections (5) and (6)
• Citizens Property Insurance Corporation, Inspections
• Fannie Mae Selling Guide B4-1.3-06, Property Condition and Quality of Construction of the Improvements
• Fannie Mae Selling Guide B7-3-02, Property Insurance Requirements for One- to Four-Unit Properties
• HUD Mortgagee Letter 2025-18, Rescission of Outdated and Costly FHA Appraisal Protocols

This article describes generally applicable Florida rules and agency standards. Carrier requirements, lender overlays, and loan program rules vary by property and change over time, so confirm what applies to a specific home before making a decision.

Here is a plain English look at what is actually available to Florida first-time buyers in 2026, what changed this year, and what you should verify before you count on any of it.

The short version

• Florida Housing’s Homebuyer Loan Program pairs a 30 year fixed first mortgage with a second mortgage for down payment and closing costs.
• The main second mortgage options are the FL Assist (up to $10,000, 0%, deferred, not forgivable), the Florida Homeownership Loan Program (FL HLP, $12,500, 3%, with a monthly payment), and the HFA Preferred or HFA Advantage PLUS second mortgage (3%, 4%, or 5% of the loan amount, forgivable over five years).
• The Florida Hometown Heroes program is aimed at specific workforce occupations and offers 5% of the loan amount, from $10,000 up to $35,000.
• Assistance money is only available when it is paired with a Florida Housing first mortgage. It is not offered as stand alone down payment help.
• Income limits and purchase price limits are set county by county, and they change during the year.

How Florida homebuyer assistance really works

Most Florida assistance programs use a two loan structure. You get a normal first mortgage for the home, and a smaller second mortgage that covers part or all of the down payment and closing costs.

Because that second loan is recorded against your home, it has to be dealt with later. Depending on the program, it may be:

• Deferred but not forgivable. No monthly payment while you live there, but the balance is due when you sell, refinance, or stop occupying the home.
• Amortizing. It works like a small second mortgage with a monthly payment.
• Forgivable. A share of the balance is forgiven each year you stay, and the remaining balance disappears at the end of the forgiveness period.

This is why “free down payment money” language oversells these programs. You are getting a real loan with real terms, and the terms matter as much as the amount.

The Florida Housing Homebuyer Loan Program

Florida Housing Finance Corporation is the state agency behind most first-time buyer financing in Florida. Its homebuyer program offers 30 year fixed rate first mortgages through participating lenders, and it can be paired with one of the second mortgage programs described below.

Current requirements listed by Florida Housing include:

• A minimum credit score of 640.
• An approved homebuyer education course completed before closing.
• Income below the limit for the county where you are buying.
• A purchase price below the limit for that county.
• First-time homebuyer status under the IRS definition, which means no ownership and occupancy of a primary residence in the three years before the purchase.
• Working with a lender approved to originate the program.

Eligible first mortgages include FHA, VA, USDA, and conventional loans through the HFA Preferred and HFA Advantage products. Properties can include single family homes, townhomes, two to four unit homes where you occupy one unit, condos in approved projects, and modular or mobile homes built in 1994 or later.

Two details surprise borrowers. First, some Florida Housing programs count the income of all household occupants age 18 and older, even if they are not on the loan. Second, the first-time buyer requirement has exceptions, including a veteran’s exemption and an exemption for purchases in federally designated targeted areas. Palm Beach County has targeted census tracts, so it is worth asking whether the address you are considering falls inside one.

The three main second mortgage options

Florida Assist (FL Assist)

Up to $10,000 on FHA, VA, USDA, and conventional loans. It is a 0% non-amortizing second mortgage with no monthly payment, and it is not forgivable. The balance becomes due when you sell, transfer the deed, pay off the first mortgage, refinance, or stop occupying the home.

Florida Homeownership Loan Program (FL HLP)

$12,500 as a 3% fully amortizing second mortgage over 30 years. It carries a monthly payment, and because it does, that payment may need to be counted in your debt to income ratio. The remaining balance is deferred until you sell, refinance, transfer the deed, or move out.

HFA Preferred and HFA Advantage PLUS

This option provides 3%, 4%, or 5% of the total loan amount as a forgivable second mortgage, forgiven at 20% per year over a five year term. It only works with the conventional HFA Preferred or HFA Advantage first mortgage products, so it is not available with FHA, VA, or USDA financing.

Hometown Heroes in 2026

The Hometown Heroes program is the piece most Florida buyers ask about, and it has the strictest rules. For the 2026 program year, Florida Housing limits eligibility to buyers who work full time for a Florida based employer in one of these groups:

• Health care workers.
• School staff members.
• First responders, public safety employees, and court employees.
• Child care workers.
• Service members of the U.S. military or reserves, the U.S. Coast Guard or its reserves, or the Florida National Guard.
• Veterans employed full time by a Florida based employer.

The assistance is 5% of the first mortgage amount, with a minimum of $10,000 and a maximum of $35,000, delivered as a 0% deferred second mortgage that is not forgivable. The program also advertises a lower first mortgage rate, reduced upfront fees, and no origination or discount points.

Funding is the part to watch. Hometown Heroes is funded in rounds and distributed first come, first served. The 2025 round opened in August 2025 with $50 million and had committed all of it within roughly six months. Florida Housing’s 2026 program materials and its 2026 income and loan limits are dated July 2026, which tells you a new funding year is under way, but the agency does not publish a live balance. Ask a participating lender whether the program is taking reservations before you build it into your plan.

Veterans and service members

If you have VA entitlement, you may not need down payment assistance at all. The VA reports that nearly 90% of VA backed loans are made with no down payment. Florida Housing also exempts qualifying veterans from the first-time homebuyer requirement in its bond program, though the agency requires a DD214 and does not extend that exemption to active duty service members, reservists, or National Guard members. Ask your lender how the two sets of rules interact before you assume you qualify for both.

What about the mortgage credit certificate?

Buyers who have been in the market for a while often ask about the mortgage credit certificate, or MCC, which let eligible buyers claim a share of their mortgage interest as a federal tax credit. Florida Housing no longer offers that program and has not issued a certificate since December 31, 2020. Some city and county housing agencies in Florida may still run their own MCC programs, so it is worth checking with the agency that covers your property. If you already hold an MCC, the credit continues while you own and occupy the home, and the recapture rules on an early sale still apply.

Low down payment loans without assistance

Assistance is not the only path. Some buyers do better with a first mortgage that carries a lower down payment and no second lien:

• VA loans for eligible veterans and service members with remaining entitlement, as noted above.
• FHA loans, which are often a fit for buyers with smaller savings or a thinner credit file. Mortgage insurance costs apply and vary.
• Conventional loans through Florida Housing’s HFA products, which can pair with the PLUS second mortgage.
• USDA loans for properties in eligible rural areas. Eligibility is checked address by address, not by city name, so a suburban address can sit outside the eligible area.

Each has different mortgage insurance, pricing, and property rules. Comparing a second lien against a slightly higher rate on the first loan is a math problem that depends on how long you plan to keep the home.

Your county and city may add programs

Florida’s State Housing Initiatives Partnership program, known as SHIP, sends money to counties and cities for local homebuyer assistance. Palm Beach County and several municipalities inside it operate their own programs, and each sets its own income limits, purchase price caps, and repayment terms. Local programs sometimes reach households that the state programs do not, and they sometimes pause intake when funds run short. Check with the county or city housing office for the specific address you are buying.

Stacking more than one source of assistance is sometimes possible and sometimes not, depending on the lender and the programs involved. Do not assume it, ask.

Mistakes that cost buyers the help

• Calling these programs grants. Most are loans secured by a second mortgage.
• Waiting until after you are under contract to ask about assistance.
• Looking at income for the people on the loan only. Household income rules can pull in other occupants.
• Shopping one bank, getting a no, and concluding nothing is available.
• Ignoring purchase price caps, then falling in love with a home above the limit for the program.
• Skipping homebuyer education until the last week of the file.
• Forgetting that the second mortgage has to be handled when you refinance or sell.

What to do, in order

1. Check the income limit and purchase price limit for your county before you shop.
2. Complete an approved homebuyer education course early, since it is required for the state program.
3. Talk to a lender approved to originate Florida Housing programs, and ask which second mortgage options fit your file.
4. Compare an FHA, VA, USDA, or conventional first mortgage using total cost, not just the rate.
5. Confirm current program funding and availability, especially for Hometown Heroes.
6. Budget for Florida property taxes, windstorm coverage, and flood insurance where it applies, because those costs shape what you can afford.

Why work with a mortgage broker on this

Down payment assistance adds a second loan, a second set of guidelines, and often a second underwriter to your file. Programs change, funding rounds close, and limits are revised during the year. Working with a broker who originates these programs regularly is about knowing which combination is available for your county, your income, and your timeline before you write an offer.

MJS Financial LLC works with Florida buyers on conventional, FHA, VA, jumbo, and alternative documentation loans, including Florida Housing’s homebuyer programs. You can start a Boca Raton mortgage pre-approval, use our mortgage calculator to estimate payments, review current Boca Raton mortgage rates, or call 561-212-0002 to talk through what your file may qualify for. Pre-approval is not a guarantee of approval, and program eligibility is always confirmed by the lender and the agency.

Related reading: FHA loans in Florida, Palm Beach County FHA loan limits, and VA loans in Florida.

FAQ

Are Florida first-time homebuyer programs grants?

Mostly no. Florida Housing’s assistance programs are second mortgages. The HFA PLUS second mortgage is forgivable over five years, and the FL Assist and Hometown Heroes seconds are deferred but not forgivable, meaning the balance is repaid when you sell, refinance, or move out.

Do I have to be a first-time homebuyer to use these programs?

Florida Housing’s homebuyer loan program generally requires first-time homebuyer status under the IRS definition, which looks at whether you owned and occupied a primary residence in the last three years. There are exceptions, including for qualifying veterans and for purchases in federally designated targeted areas. Hometown Heroes also requires first-time buyer status.

What credit score do I need?

Florida Housing currently lists a 640 minimum credit score, and individual lenders and loan types can carry their own requirements. Some buyers qualify for other loan programs with different score minimums, so a decline from one lender does not mean you are out of options.

Can I use assistance with an FHA or VA loan?

Yes. The FL Assist and Hometown Heroes second mortgages can be used with FHA, VA, USDA, and conventional first mortgages. The HFA PLUS forgivable second mortgage is limited to the conventional HFA Preferred and HFA Advantage first mortgages.

Can I combine Hometown Heroes with another program?

It depends on the lender and the programs involved. Some combinations are permitted and some are not, and the answer can change with underwriting. Ask your lender to confirm the specific stack before you rely on it.

Does the second mortgage affect my debt to income ratio?

It can. The FL HLP second mortgage carries a monthly payment, and that payment may need to be counted. The FL Assist and Hometown Heroes seconds are deferred with no monthly payment while you occupy the home, but they still have to be repaid later.

What happens when I sell or refinance?

The deferred second mortgages become due. With a forgivable second, any balance not yet forgiven is typically due at that point as well. Plan for that before you refinance into a new loan.

Does Florida still offer a mortgage credit certificate?

Not through Florida Housing. The agency stopped offering MCCs and has not issued one since December 31, 2020. Some city and county agencies may still operate their own MCC programs.

Sources

• Florida Housing Finance Corporation, Homebuyer Overview
• Florida Housing, Hometown Heroes Program (2026 program requirements and limits dated July 2026)
• Florida Housing, Mortgage Credit Certificate FAQs
• Florida Housing press release, 2025 Hometown Heroes funding fully committed (February 27, 2026)
• U.S. Department of Veterans Affairs, VA home loans

What the VA loan benefit gives you in Florida

For a buyer with full entitlement, the VA program typically requires no down payment, and it never charges monthly mortgage insurance. That is money back in your budget every month compared with FHA or a low-down-payment conventional loan.

A few ground rules come with the benefit:

• The home must be your primary residence, and you generally need to move in within 60 days of closing. Active-duty buyers with special circumstances may have more time, so ask early.
• VA loans can be used for one to four residential units, plus one business unit, as long as you live in one of the units. They cannot be used to buy a pure investment property or a second home.
• VA does not set a minimum credit score. Your lender does, and most lenders want a score in the 580 to 620 range or better along with documented income and assets.
• The seller can credit you money toward closing costs. VA does not limit credits for closing costs, but it does limit seller concessions to no more than 4% of the home’s reasonable value as shown on the Notice of Value.
• On a purchase, only the VA funding fee can be financed into the loan. Other closing costs are paid at closing.

Step one: your Certificate of Eligibility

Your Certificate of Eligibility (COE) is what proves your entitlement and tells your lender how much guaranty you have available. You can request it yourself through VA, or your lender can usually pull it for you.

Service requirements vary by when you served. Broadly, VA looks for at least 90 continuous days of active duty during a qualifying period (24 continuous months for service between August 2, 1990 and today, or the full period you were ordered to active duty), six creditable years in the National Guard or Selected Reserve, or less than the minimum if you were discharged for a service-connected disability. Some qualifying exceptions apply as well, so it is worth confirming your own record rather than assuming.

Entitlement and the 2026 loan limit picture

This is where most of the confusion lives, and it helps to separate two situations.

Full entitlement. If you have never used the benefit, or you paid off a prior VA loan and had your entitlement restored, there is no VA loan limit on your purchase. You can buy at any price with no down payment as long as your lender approves the loan and the property appraises for the purchase price. Your VA loan amount is capped at the appraised value or the purchase price, whichever is lower.

Partial entitlement. If you still have an active VA loan, or a prior VA loan that has not been restored, the county loan limit comes back into the math. VA home loan limits match the FHFA conforming loan limits for the county, and they use the one-unit limit even if the property has more than one unit.

Here is the formula VA publishes:

• County one-unit limit multiplied by 25%, then
• Subtract the entitlement already charged on your COE.

For 2026, the baseline one-unit conforming limit is $832,750 in most counties, which is a 25% guaranty of about $208,188. High-cost counties carry higher limits, up to $1,249,125.

An example: a veteran with a prior $300,000 VA loan has roughly $75,000 of entitlement charged. In a baseline county, $208,188 minus $75,000 leaves about $133,188. Multiply that by four and you get a zero-down ceiling of roughly $532,750 for the next purchase. Above that ceiling, most lenders want a down payment that covers 25% of the overage, not a full conventional down payment.

If a prior loan is paid in full, restoration is not automatic. VA Form 26-1880 is what updates the record and frees the entitlement.

Palm Beach County and the rest of South Florida have been at the baseline limit, so the county you buy in usually matters less than whether your entitlement is full or partial.

What the funding fee costs in 2026

The funding fee is a one-time charge that funds the program for taxpayers. The rates below took effect April 7, 2023 and are unchanged for 2026:

The fee is a percentage of the loan amount, not the purchase price. On a $400,000 first-use purchase with nothing down, 2.15% is $8,600, and most buyers finance it into the loan rather than paying cash at closing.

Many veterans pay no funding fee at all. You are exempt if you receive VA compensation for a service-connected disability at any rating, if you are eligible for that compensation but receive retirement or active-duty pay instead, if you receive Dependency and Indemnity Compensation as a surviving spouse, if you have a proposed or memorandum rating before closing, or if you are on active duty and provide evidence of a Purple Heart on or before closing. If VA later awards compensation with an effective date retroactive to before your closing, you may be able to request a refund.

One tax note for 2026: the funding fee is deductible again for borrowers who itemize, subject to income phase-outs, under the 2025 tax law that VA confirmed applies to VA funding fees. Ask your tax professional how it applies to your return.

Florida property rules that shape a VA closing

The VA appraisal is not a home inspection. A VA-assigned appraiser confirms the reasonable value of the home and checks Minimum Property Requirements (MPRs), meaning the property is safe, sound, and sanitary. It is not a full mechanical review, so budget for your own home inspection. A Florida home inspection is one of the best dollars you will spend on a VA purchase.

Appraisal guidance changed May 1, 2026. VA updated Chapter 12 of the Lenders Handbook and removed several long-standing conditions for appraisals ordered on or after that date. Detached sheds, outbuildings, and detached garages are no longer required to meet MPRs, radon certifications in new construction were removed, non-vented heater certifications were removed, and exterior paint defects on homes built after 1978 no longer trigger required repairs. Homes built before 1978 still get lead-based paint attention, and a detached structure that is an actual safety hazard can still be flagged.

Termite and wood-destroying insect inspections are a Florida standard. Florida sits in VA’s moderate-to-heavy and very heavy termite probability zones, so a wood-destroying insect inspection is generally required on a VA purchase here. Units in high-rise condominiums where units are stacked vertically are exempt, but villa and townhome style projects with side-by-side units can still require it. If treatment or repairs are needed, the clearance work takes time, so order the inspection as early as the contract allows.

Flood insurance is required in a FEMA flood zone. If any part of the home sits in a Special Flood Hazard Area (zones starting with A or V), federal law and VA regulations require flood insurance for the life of the loan, and the premium must be escrowed. In South Florida this is the first check to run on coastal, canal-adjacent, and low-lying properties. If the elevation supports it, a Letter of Map Amendment can remove the requirement, but that takes a survey and FEMA processing time.

Wind and hazard coverage drives your payment. VA requires hazard insurance adequate for local risks. In Florida, wind coverage and deductibles vary widely by location and roof age, and the premium is part of the monthly payment your lender uses to qualify you. Get quotes before you make an offer, not after your inspection period ends.

Homes on well and septic systems will also need water quality and septic evaluations, which add a step and a timeline.

Buying a Florida condo with a VA loan

Condos are the most common snag in Florida VA transactions, because VA reviews the project, not just your unit. If the building is not on VA’s approved condo list, your lender can request single-unit approval for the specific unit you are buying. Single-unit approval is valid for six months and applies only to that unit.

When VA or your lender reviews a project, the items that typically matter are:

• At least 50% owner occupancy, or at least 50% sold for new construction
• No more than 15% of units 60 or more days delinquent on HOA dues
• At least 10% of the annual HOA budget going to reserves
• Adequate master insurance, including windstorm coverage and deductibles
• No active litigation that threatens the project, and no prohibited leasing restrictions such as seasoning clauses that force owners to live in a unit before renting
• Commercial space generally under 25% of the total

Two Florida-specific friction points deserve attention. First, high windstorm deductibles on a building’s master policy are a common reason coastal projects cannot be approved, so ask the HOA for the master policy early. Second, Florida’s post-Surfside reserve and milestone inspection requirements have pushed older associations to raise reserves and pass special assessments, and projects in the middle of that process can slow or block approval.

Plan on three to seven weeks for a condo document review if the building is not already approved, and start the HOA document request the day you go under contract.

How qualifying works for Florida buyers

VA does not publish a hard debt-to-income cutoff, but it does require lenders to measure residual income, which is what is left each month after taxes, the new housing payment, other debts, childcare, and estimated maintenance and utilities. Florida sits in VA’s South region. For loans of $80,000 or more, the guideline residual income is roughly $441 for a one-person household and about $1,003 for a family of four, with $80 added for each additional family member up to seven. When the debt-to-income ratio is above 41%, VA raises the residual income standard, so a high-ratio file needs more cushion.

Everything that shows up in a Florida housing payment counts in that math: property taxes, wind and hazard insurance, flood insurance, HOA dues, and any special assessment that is being financed.

Self-employed borrowers, partners, and LLC members should expect full documentation. VA does not offer a stated-income option, so qualifying runs through tax returns, K-1s, and business financials. If your returns show less income than you actually earn, ask about other documented income or bank statement options before you assume the VA loan will not work.

Why a local Florida VA lender helps

Most of the delays on VA files are not about the borrower. They are about entitlement being restored, a condo document package sitting with an unresponsive HOA, a termite inspection ordered in week three, or an insurance quote that changes the qualifying payment. A broker who closes VA loans in Florida every week can pull your COE, run the entitlement math before you make an offer, order the appraisals and inspections in the right sequence, and price the seller concessions correctly on the contract.

Frequently asked questions

Can I use a VA loan to buy a rental property in Florida?

No. VA loans are for primary residences. You can buy a duplex, triplex, or fourplex and rent the other units as long as you live in one, and you can generally rent the home later if you move, subject to your loan terms and any occupancy period. If your goal is an investment property with no owner occupancy, VA is not the tool. Investor options such as DSCR loans are built for that purpose.

Do I need a down payment on a VA loan in Florida?

With full entitlement and lender approval, typically no. With partial entitlement, you may need a down payment equal to 25% of the amount above your remaining entitlement ceiling.

Is there monthly mortgage insurance on a VA loan?

No. VA loans never carry monthly mortgage insurance. Instead there is the one-time funding fee, which many borrowers finance into the loan, and which many veterans are exempt from paying.

Does the funding fee change with the 2026 VA loan limits?

No. Funding fee rates are set by statute and have been unchanged since April 7, 2023. The conforming loan limits that feed the entitlement math update once a year.

How long does a VA loan take to close in Florida?

Thirty to forty-five days is common for a single-family home when the property is ready. Condo project review, required repairs, termite treatment, or flood insurance can extend that. No one can guarantee a closing date, so build a buffer if you have a lease ending or a rate lock expiring.

What if the VA appraisal comes in below the purchase price?

Your loan amount is capped at the lower of the appraised value or the purchase price. Your options are usually to renegotiate with the seller, bring additional cash, or move on. Talk to your lender before you agree to anything.

Next steps

If you are buying in Boca Raton, Delray Beach, Boynton Beach, or anywhere in Palm Beach County, the first move is getting your entitlement and buying power confirmed. MJS Financial is a Boca Raton mortgage brokerage that works with Florida veterans, active-duty service members, and Guard and Reserve buyers every week.

• Get pre-approved for a Florida VA loan
• Run your payment with the mortgage calculator
• Check current mortgage rates
• Call MJS Financial at 561-212-0002 to talk through entitlement, funding fees, and Florida property requirements

Sources for the numbers in this article: VA funding fee and closing cost guidance (rates effective April 7, 2023), VA entitlement and loan limit guidance (county limits follow FHFA conforming loan limits), VA eligibility requirements, VA News on the May 1, 2026 appraisal updates, VA Lenders Handbook Chapter 12, 38 CFR 36.4326 for flood insurance in special flood hazard areas, and the FHFA 2026 conforming loan limit announcement.