Imagine, it’s just days before your closing and you get a call from your lender who you thought was taking care of your mortgage….”we are sorry to inform you that you will need to make an additional 10% down payment in order to complete your purchase”.  Unfortunately hundreds of potential buyers are getting this call every week in South Florida because they have chosen a lender that is not up to speed on loan to value restrictions in our area.

If you are buying in Pinecrest, Coral Gables, Weston or anywhere in the Tri-County area the down payment requirmenets for South Florida sometimes differ from other parts of the country.  Of course there are certain exceptions to every rule but know what those exceptions are and when they are applicable is not something that every lender has taken the time to explore.

Below is a break down loan type,  occupancy type and property type.

Conventional Non-conforming Financing – “Jumbo Loans”

Single family homes ~Primary residence - require a 20% down payment to a loan amount of $1 million, a 25% down payment to a loan amount of $1.5 million and 30% payment beyond $1.5 million.  Financing up to 100% of the purchase price is available with deposit relationships and/or pledge assets. 

Second homes ~ require a 25% down payment to a loan amount of $1million, 30% to a loan amount of $1.5 million or more.  Financing up to 100% of the purchase price is available with deposit relationships and/or pledge assets.

Condominiums ~ Primary residence - require a 20% down payment to a loan amount of $1 million, a 25% down payment to a loan amount of $1.5 million and 30% payment beyond $1.5 million.  Financing up to 100% of the purchase price is available with deposit relationships and/or pledge assets.

Second homes ~ require a 25% down payment to a loan amount of $1million, 30% to a loan amount of $1.5 million or more.  Financing up to 100% of the purchase price is available with deposit relationships and/or pledge assets.

Conventional Financing under the temporary conforming loan limit of $423,650*

Single family homes ~ Primary residence and second home - requires a 10% down payment, Investment property - requires a 20% down payment. 

Condominiums ~ Primary residence and second home - require a 20% down payment, investment property - requires a 20% down payment. 

FHA Financing under temporary loan limit of $423,650**

Single family homes ~ Primary residence- requires a 3% down payment – second home and investment property not permitted***

Condominiums ~ Primary residence- requires a 3% down payment (building must be FHA approved) – second home and investment property not permitted***

VA Financing under loan limit of $700,000 (higher loan limits available)

Single family homes ~ Primary residence- 0% down payment required for qualified veterans – second home and investment property not permitted

Condominiums ~ Primary residence- 0% down payment (building must be VA approved) required for qualified veterans – second home and investment property not permitted

*The temporary expanded loan limit of $423,650 expires on January 1, 2009 and will revert to the normal loan limit of $417,000.

**The temporary expanded FHA loan limit of $423,650 expires on January 1, 2009 and will revert to the revised loan limit of $345,000 for Miami Dade, Broward and Palm Beach Counties.

***As of January 1, 2009 the down payment requirement for FHA will be 3.5% of purchase price.

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Guest Contributor: James Venney CMPS, CMA

Phone: 305-960-2671

Email: james.r.venney@homesvclending.com

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European Style 4 story building in the heart of Coconut Grove. Minutes from Metrorail, Downtown Miami, Coral Gables, South Miami and Midtown. This spacious studio has a full size kitchen with stainless steel appliance, washer/dryer and one parking space. Secure building with gated underground garage and 24 hours fitness center.

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If you are interested in buying a foreclosure or a luxury property in South Florida, call me and I will assist you.

Money will also impact other discussions.  If a new proposal would be funded by tax money, that bill starts with one strike against it.  The same is true for a bill that would lower taxes. Even if justified, lawmakers will be hard-pressed to make the cut in 2008

With that challenge in mind, the Florida Association of Realtors will continue to advocate for commercial interests. Two goals already adopted.

Property tax reform

In early September, the Florida Supreme Court pulled Amendment 5, which would have appeared on the Nov. 4, ballot.  Up to that point, Amendment 5 represented the commercial industry best shot at significant tax reform.  For more of this article and much more click here for the FAR RCA Newsletter

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