Trying to pick between FHA and conventional financing for a home in Boynton Beach can feel like a moving target. You are weighing down payment, credit score, condo rules, flood risk, and insurance costs, all at once. The good news is you can make a clear choice once you understand how each loan type works and how local factors in Palm Beach County affect your approval and monthly payment. In this guide, you will learn the basics, local condo and insurance considerations, sample payment scenarios, and a step-by-step checklist to move forward with confidence. Let’s dive in.
FHA vs conventional basics
FHA at a glance
FHA loans are insured by the Federal Housing Administration and are known for flexible credit and low down payments. If your credit score is 580 or higher, the minimum down payment is typically 3.5%. If your score is between 500 and 579, you may be eligible with a 10% down payment based on HUD guidance. FHA charges an upfront mortgage insurance premium of 1.75% of the base loan amount, which you can finance into the loan. FHA also charges an annual mortgage insurance premium collected monthly. For many recent 30-year FHA loans, this monthly MIP remains for the life of the loan unless you refinance or meet specific thresholds.
Who it fits: buyers with limited down payment, newer credit profiles, or those buying properties that meet FHA condo or property requirements.
Conventional at a glance
Conventional loans follow Fannie Mae and Freddie Mac standards and are issued by private lenders. Some first-time buyer programs allow as little as 3% down, though many buyers choose 5% or more. If you put less than 20% down, you will have private mortgage insurance. PMI costs vary by credit score, down payment, and loan size. You can usually request to remove PMI when your loan-to-value reaches about 80% and expect automatic termination near 78% based on the original amortization schedule.
Who it fits: buyers with stronger credit and those who want the ability to remove PMI by building equity or through refinancing.
Key differences you will notice
- Mortgage insurance. FHA has an upfront premium and monthly MIP that often lasts longer. Conventional has PMI that can be removed over time.
- Credit tolerance. FHA is more forgiving on credit and income. Conventional rewards higher credit scores with lower pricing.
- Condo eligibility. Both require project-level approval. FHA requires the project to be approved or to go through FHA review. Fannie Mae and Freddie Mac have their own project review standards.
Boynton Beach factors that affect your loan
Loan limits in Palm Beach County
Loan limits set the maximum size for each program. FHA limits are published by HUD and vary by county and unit count. You can check Palm Beach County’s current FHA limits on the HUD FHA Mortgage Limits page. Conventional conforming limits are set each year by the FHFA. You can confirm the latest conforming limit on the FHFA Conforming Loan Limits page. Many Boynton Beach buyers find both limits are sufficient for condos, townhomes, and many single-family homes. For higher-priced properties, a jumbo mortgage may be required.
- Check HUD limits: HUD FHA Mortgage Limits for Palm Beach County
- Check conforming limits: FHFA Conforming Loan Limits
Condos and warrantability in South Florida
If you are shopping condos, the building’s approval status is often the gating item for financing. FHA requires the condo project to appear on HUD’s approved list, or the lender must obtain project approval. If the project is not approved, FHA financing may be unavailable or may take weeks while the approval is completed.
Conventional loans require the project to meet Fannie Mae or Freddie Mac standards. Lenders may complete a limited review or full review based on the property and borrower profile. Many lenders can proceed while the project undergoes review, but that depends on the findings.
Local dynamics affect eligibility in Boynton Beach and nearby coastal areas. Since the Surfside tragedy, lenders and insurers often take a closer look at older coastal buildings. Common issues include building age and structural recertifications, reserve fund strength and special assessments, the share of investor-owned units, pending litigation, and the adequacy of the master insurance policy. These items can make a project ineligible or add conditions to your loan.
- FHA condos: HUD Approved Condominium List
- Fannie Mae standards: Fannie Mae Project Standards
- Freddie Mac standards: Freddie Mac Condominium Requirements
Tip: start the condo approval conversation early. Ask your lender to pre-review HOA documents and confirm the building’s status before you make an offer.
Insurance, flood zones, and coastal risk
Insurance factors are a big part of the Boynton Beach financing picture. Many coastal and low-lying neighborhoods fall within FEMA Special Flood Hazard Areas. Lenders require flood insurance for properties in these zones. Wind and hurricane coverage can also be a large cost. For condos, confirm what the master policy covers and whether you need an HO-6 policy for the interior. High premiums increase your monthly housing cost and may affect your qualifying debt-to-income ratio.
- Check flood zones: FEMA Flood Map Service Center
HOA dues count toward your budget
Homeowners association dues and special assessments are part of your monthly qualification. This is common for Boynton Beach condos along the coast, where HOA fees can be higher and may include reserves, insurance, or utilities. Your lender will add dues to your debt-to-income calculation, so include them when you compare FHA and conventional scenarios.
What monthly payments might look like
Below are simple illustrations to show how interest rate, down payment, and mortgage insurance can change your payment. These examples focus on principal and interest plus the monthly mortgage insurance portion. They do not include property taxes, homeowners insurance, flood insurance, or HOA dues. Actual rates and premiums vary by borrower and property. Ask your lender for customized numbers.
Assumptions used below:
- 30-year fixed term
- FHA: 3.5% down for credit 580 or higher, UFMIP 1.75% financed into the loan, annual MIP estimated at 0.85% for illustration
- Conventional: 5% down, PMI estimated at 0.6% annually for illustration
- Rate scenarios: 6.5% and 7.5%
Scenario A: $300,000 purchase price
- FHA
- Base loan: $289,500. UFMIP 1.75%: about $5,066. Financed loan: about $294,566.
- At 6.5%: P&I about $1,862 per month. MIP about $209. Combined about $2,071.
- At 7.5%: P&I about $2,058 per month. MIP about $209. Combined about $2,267.
- Conventional
- Loan: $285,000. PMI about $143 per month with the above assumption.
- At 6.5%: P&I about $1,801. With PMI about $1,944.
- At 7.5%: P&I about $1,992. With PMI about $2,135.
Takeaway: with these assumptions, conventional shows a modest monthly savings because FHA finances UFMIP and charges ongoing MIP that often lasts longer than PMI.
Scenario B: $450,000 purchase price
As the price goes up, the difference can widen. FHA’s UFMIP is a percentage of a larger loan, and the monthly MIP applies to a higher balance. If you have strong credit and can put 5% or more down, conventional often delivers a lower monthly cost and gives you a path to remove PMI once you build equity.
Scenario C: $650,000 purchase price
At higher price points, you may exceed conforming loan limits and need a jumbo loan. Jumbo rates, down payment rules, and insurance options differ from conforming loans. Confirm the current conforming limit using the FHFA tool above and ask your lender to show side-by-side jumbo versus conforming scenarios if you are near the threshold.
Buyer checklist for Boynton Beach
Early steps
- Get pre-qualified or pre-approved with a local lender who understands Palm Beach County condo reviews and flood insurance rules.
- Ask for side-by-side FHA and conventional estimates that include P&I, PMI or MIP, property taxes, homeowners or HO-6 insurance, flood insurance if required, and HOA dues.
If you are buying a condo
- Confirm building eligibility.
- Is the project on the HUD FHA approved list?
- Will it meet Fannie Mae or Freddie Mac project standards for conventional financing?
- Request HOA documents early. Ask for the budget, reserve study, owner-occupancy percentage, rental rules, minutes showing special assessments, the master insurance policy with limits and deductibles, and any recent inspection or structural reports.
- Ask about insurance details. Clarify hurricane and wind deductibles, and whether flood coverage exists for common areas. You will likely need separate flood coverage for your unit if the building is in a flood zone.
If you are buying a single-family home
- Check the FEMA flood map for the property address and budget for flood insurance if the home is in a Special Flood Hazard Area.
- Compare FHA and conventional pricing. If you can make a down payment of 10 to 20 percent and have strong credit, conventional often yields the lower long-term cost.
Timing and backup plans
- Condo approvals can add time to your closing if the project is not already approved. Build in extra days and start early.
- If a building has low reserves or pending issues, ask your lender about portfolio or non-agency options as a backup. These can carry higher rates and fees.
Smart questions to ask your lender
- If I qualify for both FHA and conventional, can you send an apples-to-apples cost sheet that includes P&I, PMI or MIP, property taxes, homeowners or HO-6 insurance, flood insurance, and HOA dues?
- Is the condo on the FHA approved list? If not, how long would an approval take? If I choose conventional, will the project meet Fannie or Freddie rules?
- What credit score and debt-to-income targets unlock the best conventional pricing for my profile? What PMI rates should I expect at my down payment level?
- If I start with FHA and plan to refinance, what options might I have to remove MIP or lower my rate later?
How to choose between FHA and conventional
- Your credit and down payment. If you need the most flexible path to approval with limited funds, FHA can help you get in the door. If you have stronger credit and can put 5 percent or more down, conventional often wins on monthly cost and long-term savings.
- The property. For condos, project approval can decide the loan type for you. Confirm approval status early, and be ready with a backup plan if the building runs into review issues.
- Your time horizon. If you plan to keep the loan long term, the ability to remove PMI on a conventional loan can matter a lot. If you expect to refinance or sell within a few years, compare the near-term costs and benefits.
- Insurance and fees. Include flood premiums, wind coverage, and HOA dues in every comparison. These local costs can change which option fits your budget.
Next steps
You do not have to sort this out alone. If you want local guidance on FHA versus conventional, condo approvals, and how flood insurance affects your budget, reach out for a personal plan that fits your goals in Boynton Beach and across Palm Beach County. Connect with Shelby Seidler to compare scenarios, line up your lender, and move forward with clarity.
Sources to verify and explore
- FHA limits and condo approvals: HUD FHA Mortgage Limits and HUD Approved Condominium List
- Conforming loan limits: FHFA Conforming Loan Limits
- Condo standards: Fannie Mae Project Standards and Freddie Mac Condominium Requirements
- Flood zones: FEMA Flood Map Service Center
- Local data and records: Palm Beach County Property Appraiser and Florida DBPR Condominium Resources
FAQs
What is the main difference between FHA MIP and conventional PMI in Boynton Beach?
- FHA charges an upfront premium plus monthly MIP that often lasts for the loan term, while conventional PMI is monthly only and can usually be removed once you reach about 20 percent equity.
How do I check Palm Beach County loan limits for FHA and conventional loans?
- Verify FHA limits on the HUD Mortgage Limits page and check conforming limits on the FHFA website, then ask your lender to confirm the numbers for your specific scenario.
Can I use FHA financing to buy a Boynton Beach condo?
- Yes, if the project is on HUD’s approved list or can be approved. If the building is not approved, FHA financing may be delayed or unavailable until approval is obtained.
How do flood zones affect mortgage approval in Boynton Beach?
- If a property is in a FEMA Special Flood Hazard Area, lenders require flood insurance. Higher premiums can affect your monthly budget and your qualifying debt-to-income ratio.
When can PMI come off a conventional loan on a Boynton Beach home?
- You can often request PMI cancellation when your loan-to-value reaches about 80 percent and expect automatic termination near 78 percent based on your original amortization schedule.
