Question 1

What is the FHA loan limit in Santa Cruz County?

Accepted Answer

Santa Cruz County is a high-cost area with elevated FHA limits. Check HUD's current limit table — it updates annually and directly caps what you can borrow.

Question 2

Can I use FHA to buy a condo in Capitola?

Accepted Answer

Yes, but the condo project must be FHA-approved. Not all Capitola condo complexes are on HUD's approved list — confirm before you make an offer.

Question 3

Does FHA work for Capitola beach cottages with deferred maintenance?

Accepted Answer

It can, but FHA appraisers flag health and safety issues. Sellers may need to complete repairs before closing, which can complicate negotiations.

Question 4

How much is FHA mortgage insurance?

Accepted Answer

FHA charges an upfront MIP of 1.75% of the loan amount, plus an annual premium. The annual rate depends on your loan term and down payment.

Question 5

Can I remove FHA mortgage insurance later?

Accepted Answer

Not by request. If you put less than 10% down, MIP stays for the loan's life. Refinancing into a conventional loan is the most common exit strategy.

Question 6

Is FHA or conventional better in Capitola's market?

Accepted Answer

Depends on your credit score and down payment. Above 700 with 5% down, conventional often wins on total cost. FHA wins when credit is under 660.

FHA Loans in Capitola, CA — Low Down, Real Approval