Suffolk FHA Loans: 7 Things You Need to Know in 2025
Looking to purchase your dream property in Suffolk this year? Here is everything you need to know about Suffolk FHA loans in 2025.
With a population of 1.5 million and an average median home price of $650k – up by 7% since last year, Suffolk County is one of the most desired housing markets in New York.
Constituting the eastern two-thirds of Long Island and bordered by Nassau County to the west, it offers a mix of suburban charm, strong school districts, and waterfront properties.
However, the home prices have been steadily rising over the past few years, from a median price of $465k in 2020 to getting close to $700k in 2025 – making affordability a major concern. This is where Suffolk FHA loans become a great option.
But what exactly are Suffolk FHA loans, and what are some of the most important things that you need to know before applying for this mortgage type?
Whether you are looking for a starter home at Huntington, or a beachside property in the Hamptons, here is everything you need to know about Suffolk FHA loans. As an industry expert and a leading mortgage lender in New York, Jet Direct Mortgage will help you navigate the home-buying process in Suffolk as efficiently as possible.
So, just keep reading to learn more:
What Are Suffolk FHA Loans?
As opposed to conventional home loans, which are not backed up by a government entity, FHA loans are backed by the Federal Housing Administration (FHA). This means that the government insures the loan, effectively reducing the risk for lenders.
Since lenders don’t assume all the risk for this type of mortgage, they typically make the requirements more lenient. For example, you could apply with a lower credit score, or provide a smaller down payment compared to other types of loans.
In addition, if you are looking to get Suffolk FHA loans, you might be able to get more favorable terms, even if you have a limited credit history – or a higher debt-to-income ratio.
10 Things You Need to Know About Suffolk FHA Loans
Before you apply for Suffolk FHA loans, we recommend that you do your due diligence, and make sure that you have a clear understanding of their key characteristics. To save you time, we have compiled them in the following section:
1. Suffolk County is Classified as a High-Cost Area
Suffolk County is classified as a high-cost area, which means that the FHA loan limit for a single-family home is $1,209,750 – significantly higher than the one for lower cost areas, which is $524,225 in 2025.
In other words, since the Suffolk market is more expensive than other areas, the Federal Housing Administration accommodates it to align with the higher cost of the homes. For you, this means that you can qualify for a home of up to $1,209,750.
If the home that you are looking to purchase surpasses these limits, you might need to apply for Suffolk jumbo loans instead.
2. You Will Need a Minimum Credit Score of 500 To Qualify For Suffolk FHA Loans
Another important thing that you need to know about Suffolk FHA loans is that the credit score requirements are not as strict as they are with other types of loans, such as conventional loans or jumbo loans.
To put things into perspective, you can apply for an FHA loan in Suffolk with a credit score as low as 500, while conventional loans require a credit score of at least 620. In contrast, you will need a score of 700 or higher for jumbo loans.
3. You Will Need to Pay An Upfront Mortgage Insurance Premium (MIP)
Another key aspect of applying for Suffolk FHA loans is that you will need to pay an Upfront Mortgage Insurance Premium (UFMIP), which is a one-time fee required by the Federal Housing Administration (FHA) to insure the loan.
This UFMIP is currently set at 1.75% of the total loan amount, and is typically rolled into the mortgage rather than paid out-of-pocket at closing. In addition, you will also have to pay Annual Mortgage Insurance Premiums (MIP), which are added to your monthly mortgage payment.
The annual MIP rate depends on the loan amount, term, and down payment, but it typically ranges from 0.45% to 1.05% of the loan balance. These costs allow you to get Suffolk FHA loans with a lower credit score or limited savings, making it more affordable overall.
4. Homes Purchased With Suffolk FHA Loans Should Meet Certain Standards
When it comes to Suffolk FHA loans, another factor that you will need to keep in mind before applying is that the home you are looking to purchase with this mortgage should meet certain standards.
This includes:
Safety Requirements – Such as no exposed wiring or electrical hazards, no faulty plumbing, no lead-based paints, proper ventilation and heating systems, etc.
Structural Integrity – The property should be built on a solid foundation with no major cracks or instability; walls, ceilings and floors must be structurally sound.
Good Property Condition – The property should be in a good livable condition – with working systems, no broken windows or missing doors, access to clean water, etc.
Location & Accessibility – In order to secure Suffolk FHA loans, the property that you are looking to purchase should be residentially zoned, and accessible year-round.
FHA Appraisal – In addition, it should be appraised by an FHA-approved appraisal, who will verify that the property is meeting these standards.
5. Suffolk FHA Loans Are Great For First-Time Homebuyers
Did you know that Suffolk FHA loans are a great option if you are a first-time homebuyer? That’s because they offer low down payment options, flexible credit requirements, and competitive interest rates, allowing you an easier way to tap into homeownership.
As we mentioned earlier, they are not as stringent as conventional loans, which makes it easier for you to qualify as a borrower. However, they are not great only for first-time homebuyers.
Suffolk FHA loans are also an excellent option if you are looking to refinance your existing mortgage, purchase a fixer-upper, or need a loan with more flexible debt-to-income (DTI) requirements. They are particularly beneficial if you have a lower credit score or limited savings.
6. FHA Loans Can’t Be Used For Second Homes or Investment Properties
Before you apply for a Suffolk FHA loan, keep in mind that this type of mortgage cannot be used for investment properties or vacation homes. The reason why is because FHA loans are specifically designed for the purchase or refinancing of a primary residence.
In fact, to ensure that this rule is enforced, FHA requires you to occupy the property within 60 days of closing. You should also live in it for at least one year, meaning you cannot rent it or sell it in the meantime.
However, in some cases, multi-unit properties (up to 4 units) may qualify if you live in one of the units while renting out the others. This can be a great option if you are looking to generate rental income while still meeting FHA occupancy requirements.
If you have any questions, you can get in touch with a Suffolk mortgage banker such as Jet Direct Mortgage. We will be happy to provide you with personalized guidance.
7. Your Debt-to-Income Ratio Can Be As High as 56%
While most conventional loans require that you have a Debt-to-Income Ratio of 45-50% (although 36%-40% is preferred for jumbo loans), Suffolk FHA loans are significantly more lenient – your DTI ratio can be as high as 56.9%.
This means that you can qualify even if you have existing debt – however, we recommend that you pay down as much of it as possible before applying. This can get you better terms and rates, and reduces the risk of getting your application rejected.
FAQ
Can I use an FHA loan to buy an investment property in Suffolk?
No, Suffolk FHA loans cannot be used to buy investment properties in Suffolk or anywhere else. FHA loans are designed specifically for primary residences, meaning the borrower must live in the home for at least one year after purchase.
However, you can buy a multi-family property (up to 4 units) with an FHA loan if you live in one of the units while renting out the others. For true investment properties, a conventional or DSCR loan is required.
What types of properties qualify for an FHA loan in Suffolk?
In Suffolk County, FHA loans can be used to purchase single-family homes, condos in FHA-approved developments, manufactured homes, and multi-family properties (up to 4 units) as long as the borrower occupies one of the units as their primary residence.
The property must meet FHA safety, security, and livability standards through an FHA appraisal. Investment properties and vacation homes do not qualify for FHA financing.
Can I use a Suffolk FHA loan to buy a multi-family home?
Yes, Suffolk FHA loans can be used to buy multi-family homes with up to four units, as long as the borrower lives in one of the units as their primary residence for at least one year.
This makes FHA loans a great option for house hacking, where you rent out the other units to offset your mortgage. The property must pass an FHA appraisal, and the loan limits are higher for 2-4 unit properties than for single-family homes.
Can I refinance my current mortgage with an FHA loan?
Yes, you can refinance your current mortgage with an FHA loan, even if your original loan was not FHA-backed.
Options include the FHA Streamline Refinance, which requires less paperwork, no new appraisal, and minimal credit checks for existing FHA borrowers, and the FHA Cash-Out Refinance, which allows you to tap into your home equity. FHA refinancing is ideal for those looking to lower rates, reduce payments, or access cash.
What happens if my FHA appraisal comes back with required repairs?
If your FHA appraisal comes back with required repairs, the seller must fix them before closing, or you can negotiate who will cover the costs.
Repairs are required for issues affecting safety, security, or structural integrity, such as roof damage, faulty wiring, or plumbing issues. If the seller refuses, you may need an FHA 203(k) loan, which allows you to finance repairs into the mortgage.
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