How much house you can afford in Florida comes down to the monthly payment a lender will approve and the one you are comfortable with. Lenders compare your total monthly debts, including the new housing payment, to your gross monthly income. In Palm Beach County, property taxes, homeowners and flood insurance, and HOA or condo fees are all part of that payment, so they can change your price range as much as the interest rate does.
How do lenders decide how much you can borrow?
Lenders do not start with a home price. They start with your income and your debts, work out the largest monthly housing payment your file supports, and then work backward from that payment to a loan amount.
Debt-to-income ratio
The main test is your debt-to-income ratio, or DTI. The Consumer Financial Protection Bureau defines it as all your monthly debt payments divided by your gross monthly income. In the CFPB's own example, $2,000 of monthly debts on $6,000 of gross monthly income is a DTI of 33%.
The new housing payment counts as one of those debts. So do car loans, student loans, minimum credit card payments and other recurring monthly obligations, whether or not they show on your credit report.
How high the ratio can go
Limits depend on the program and the file. As the CFPB puts it, different loan products and lenders have different DTI limits. A few reference points from the agencies:
- Fannie Mae allows up to 36% on manually underwritten loans, and up to 45% when credit score and reserve requirements are met
- Fannie Mae's automated underwriting system can approve ratios up to 50%
- FHA can allow higher ratios with compensating factors
The ratio a lender accepts on your file is not something a rule of thumb can tell you. It depends on your credit, down payment, reserves and the underwriting findings, and some lenders set lower limits than the agencies allow.
Gross income, not take-home pay
Florida has no state income tax, which can leave you more take-home pay than buyers in other states. Lenders qualify on gross income, though, so having no state income tax does not raise the amount you are approved for. It does affect how comfortable the payment feels, which is worth weighing on its own.
What goes into the monthly payment in Florida?
Fannie Mae counts the housing payment as PITIA: principal, interest, property taxes, homeowners insurance and association dues, plus mortgage insurance and any second mortgage. Every dollar that goes to taxes, insurance or dues is a dollar that cannot go to principal and interest at the same DTI.
That is why Florida affordability looks different. In many parts of the country, principal and interest are most of the payment. Here, the other pieces can be a large share of it.
- Property taxes, usually collected monthly in escrow
- Homeowners insurance, including windstorm coverage, which in Florida often carries its own deductible
- Flood insurance, when it is required or when it is simply wise for the property
- HOA dues, and for condos, association fees and any special assessments
- Mortgage insurance, on a conventional loan with less than 20% down, or on FHA
Costs outside the monthly payment
You also need cash for closing costs and, depending on the loan, reserves left over after closing. Florida closing costs include documentary stamp tax on the deed and on the note, and the nonrecurring intangible tax on the mortgage. Who pays which items is set by the contract. Budget for maintenance and utilities as well; lenders do not count them, but you will pay them.
When you run the numbers in our mortgage calculators, enter real estimates for taxes, insurance and dues rather than leaving them blank. The result is only as good as those inputs.
How do homeowners and flood insurance change what you can afford?
Insurance is part of the payment lenders qualify you on, so a higher premium means a smaller loan at the same income. In Florida it is one of the biggest variables between two homes at the same price.
When flood insurance is required
If a home sits in a FEMA Special Flood Hazard Area and the mortgage is federally backed or from a federally regulated lender, flood insurance is required. You can look up a home's flood zone on FEMA's flood map before you make an offer.
Citizens Property Insurance Corporation adds its own rule. Citizens policies that include wind coverage must also carry flood insurance on a phase-in by dwelling coverage amount:
- $600,000 and up in 2024
- $500,000 and up in 2025
- $400,000 and up in 2026
- All policies, regardless of value, in 2027
Homes inside a Special Flood Hazard Area with Citizens wind coverage need flood insurance regardless of value. Condominium unit-owner policies are not required to carry flood under the Citizens rule.
Get quotes while you search
The safest habit is to get insurance quotes on a home before you sign a contract, not after. A quote that comes in higher than you expected changes the payment, and with it the loan amount you qualify for.
Want to see the full Florida payment, not just principal and interest?We build the estimate with taxes, insurance and dues for the homes you are looking at.
Talk to a brokerHow do HOA and condo fees affect your buying power?
Association dues are part of PITIA, so higher dues reduce the loan amount you qualify for at the same income. Two homes at the same price can support very different loans if one has a large monthly fee.
Florida condos deserve a closer look. For condo buildings three habitable stories or more, state law requires a structural integrity reserve study, and starting with budgets adopted on or after December 31, 2024, owners can no longer vote to waive or reduce reserves for the items it covers. Associations can also fund repairs through special assessments or loans. Before you write an offer, ask for the association's budget, its reserves and any current or planned special assessments, so you know what the monthly fee may look like after you close.
How does the homestead exemption affect your property taxes?
If the home will be your permanent residence, Florida's homestead exemption lowers its taxable value. Part of the exemption applies to all property taxes and part applies only to non-school taxes. The amounts are set by the Florida Constitution and state law and can change, so use the Property Appraiser's current figures when you budget.
- You must hold title and make the home your permanent residence as of January 1
- The filing deadline is March 1
- Once the home is homesteaded, the Save Our Homes cap limits yearly increases in assessed value to no more than 3%
The seller's tax bill is not yours
A listing often shows the seller's last tax bill. That bill reflects the seller's homestead exemption and years of Save Our Homes protection, which belong to the seller. Your bill can be quite different. To budget, use the Palm Beach County Property Appraiser's property tax calculator, not the listing.
Moving within Florida
If you already have a Florida homestead, portability lets you carry up to $500,000 of your accumulated Save Our Homes benefit to the new home, as long as you establish the new homestead by January 1 of the third year after leaving the old one. The Property Appraiser has a portability calculator for that estimate.
How much do you need for a down payment?
The down payment changes both the loan amount and the monthly payment, including whether mortgage insurance applies. Standard program minimums:
| Conventional | FHA | VA and USDA | |
|---|---|---|---|
| Minimum down | As little as 3% for qualifying buyers, many start at 5% | 3.5% with a 580+ score | None for eligible VA borrowers, and on USDA in eligible areas within income limits |
| Mortgage insurance | With under 20% down, can usually be removed at 20% equity | FHA mortgage insurance | No monthly MI on VA, though a funding fee may apply; USDA has its own guarantee fees |
| Gifts | Allowed on a primary or second home | Allowed from family and other eligible donors | Program rules apply |
Second homes and investment properties need more down. Beyond the down payment, plan for closing costs and any reserves your loan requires. We also work with Florida down payment assistance, including Florida Hometown Heroes, for buyers who qualify. If you are weighing the first two columns, our guide to FHA or conventional walks through the trade-offs.
How we approach it
We start with the payment, not the price. We look at your income, debts and savings, then build the full Florida payment for the kind of home you want, with real estimates for taxes, insurance and association dues. From there we price conventional, FHA and any other program that fits across our lender network, so you see what each one lets you buy before you shop. A pre-approval gives you a firmer figure, still subject to credit approval and underwriting.
Mortgage calculatorsEstimate a payment with taxes, insurance and duesConventional PurchaseAs little as 3% down for qualifying buyersFHA PurchaseAs little as 3.5% down with more flexible qualificationSources
- CFPB: What is a debt-to-income ratio?
- Fannie Mae Selling Guide: B3-6-02, Debt-to-Income Ratios
- Florida Statutes: s. 196.031, Homestead exemption
- Palm Beach County Property Appraiser: Portability
- Palm Beach County Property Appraiser: Property Tax Calculator
- Citizens Property Insurance Corporation: Flood insurance requirement
- FEMA: Understanding flood risk for real estate, lending and insurance professionals
- Florida Department of Revenue: Documentary stamp tax
Common questions
It depends on your gross income, your other monthly debts and the full monthly payment on the home, including property taxes, homeowners and flood insurance and any HOA or condo fees. Lenders compare your total monthly debts, including the new payment, to your gross monthly income. In Florida, insurance and association fees can take a large share of the payment, so the same income can buy less house than a generic calculator suggests.
It depends on the loan program and the file. Fannie Mae allows up to 36% on manually underwritten loans, up to 45% with credit score and reserve requirements, and up to 50% through its automated underwriting system. FHA can allow higher ratios with compensating factors. Some lenders set lower limits.
Not directly. Lenders qualify you on gross income, before taxes, so having no state income tax does not raise the amount a lender approves. It can leave you more take-home pay each month, which matters for what feels comfortable.
It is better not to. The seller's homestead exemption and Save Our Homes cap belong to the seller, so your bill can be different. The Palm Beach County Property Appraiser offers a property tax calculator to estimate taxes for a new purchase.
Standard program minimums are as little as 3% for qualifying first-time or income-eligible buyers on a conventional loan, 3.5% on FHA with a 580 or higher credit score, no down payment on VA loans for eligible veterans and service members (a VA funding fee may apply), and no down payment on USDA loans in eligible areas for borrowers within the income limits. You also need funds for closing costs and, depending on the loan, reserves.
General information only, not a commitment to lend or an offer of credit. Loan programs, guidelines, interest rates and terms are subject to change without advance notice and vary by lender. All loans are subject to credit approval and underwriting.
My Liberty Loans is a DBA of Liberty Mortgage Associates Inc., NMLS #275236.