Mortgage Loans in Key West, FL: FHA, Conventional, Investor and HomeTown Heroes
You can get a mortgage in Key West through William A. Ledesma at Bold Mortgage, a division of PRMG. He works with Key West buyers by phone, video and e-sign, together with local agents. Your main options are FHA, conventional, second home, jumbo, investor and DSCR loans, plus Florida HomeTown Heroes help if you qualify, and Monroe County has the highest 2026 loan limits in Florida.
Buying a home in Key West: what to know
Key West sits at the end of the Overseas Highway. It is the southernmost city in the continental United States, and it is a small island. Land is limited, so few homes come up for sale at once.
Tourism drives the economy. Duval Street, the sunset celebration at Mallory Square, the Ernest Hemingway Home and Museum, the Southernmost Point buoy and cruise ship visits bring people in all year, with the busiest season in winter. Naval Air Station Key West, on Boca Chica Key just up the road, is a major employer. So are Lower Keys Medical Center, the City of Key West, Monroe County, the College of the Florida Keys and the many hotels, restaurants and charter businesses.
Old Town is the historic core. Here you find wood frame conch cottages, eyebrow houses and Victorian homes, many of them over 100 years old. Exterior changes in the historic district go through the city's Historic Architectural Review Commission, known as HARC. Bahama Village sits on the west side of Old Town. Truman Annex, a former Navy property near the Truman Little White House, has condos and townhomes. Casa Marina, on the Atlantic side, has larger homes and older condo buildings. New Town, on the east half of the island, has more concrete block homes from the 1950s on, plus condos along the beaches. Just off the island, Key Haven and Stock Island add more homes and marinas.
Buyers are a mix of local workers, Navy and Coast Guard families, retirees and second home owners. Some Keys homes carry workforce housing deed restrictions that limit who can own or rent them, so read the listing and title closely.
FHA loans in Key West
FHA loans let you buy with 3.5% down if your credit score is 580 or higher. With a score from 500 to 579, FHA requires 10% down, and many lenders set higher minimums. The home must be your primary residence, so FHA works for people who live and work in Key West, not for a vacation home.
The 2026 FHA limit for a one-unit home in Monroe County is $990,150, the highest in Florida. Limits are higher for 2 to 4 unit properties. You pay an upfront mortgage insurance premium of 1.75% plus a monthly premium. With less than 10% down, the monthly premium stays for the life of the loan unless you refinance.
Local stock matters here. A condo must be in an FHA-approved project or qualify for single-unit approval, and many Key West condo buildings are not approved. Older conch homes must meet FHA property standards, so the appraiser will look closely at the roof, wood rot, electrical and anything that looks unsafe.
Conventional loans in Key West
Conventional loans start at 3% down for qualifying first-time buyers and 5% down for others. With less than 20% down you pay private mortgage insurance, and you can ask to remove it once you reach 20% equity. The 2026 conforming limit in Monroe County is $990,150, higher than the $832,750 limit in the rest of Florida. Above that you need a jumbo loan, which is common for Old Town and waterfront homes.
Conventional is also the main path for second homes, often with 10% down if you will use the home yourself for part of the year. Condo buildings must meet Fannie Mae or Freddie Mac rules. Condo-hotels usually do not qualify.
Investor and DSCR loans in Key West
A DSCR loan qualifies you on the property's rent instead of your personal income. Expect about 20 to 25% down. It works well for LLCs and self-employed investors whose tax returns do not show their full income. You can also use a conventional investment property loan or a bank statement loan.
Rental demand comes from Navy and Coast Guard personnel, hospital staff, hotel and restaurant workers and seasonal winter residents. Key West tightly controls rentals of under 30 days, so check city zoning and licensing rules before you buy for short-term rental.
Florida HomeTown Heroes and down payment help in Monroe County
Florida HomeTown Heroes is a Florida Housing Finance Corporation program for first-time buyers. In general, that means you have not owned a primary residence in the past 3 years, and you work full time for a Florida-based employer.
The program gives you 5% of the first mortgage, with a minimum of $10,000 and a maximum of $35,000. It is a 0% interest second mortgage with no monthly payment. You repay it when you sell, refinance, transfer the deed, pay off the first mortgage, or stop living in the home. You need a 640 minimum credit score and a homebuyer education course, and Monroe County income limits apply. Funding is released in rounds and can run out, so William checks availability the day you are under contract. A fully signed contract is needed to reserve funds. Learn more at Florida Housing.
Every Florida county also receives SHIP (State Housing Initiatives Partnership) funds for local down payment help. Ask the Monroe County housing office what is open when you are ready to buy.
Insurance, flood and condo rules that affect your loan in Key West
The whole island sits low, and most of Key West is in a FEMA flood zone. If your home is in a high-risk zone and you have a federally backed loan, flood insurance is required. Get a flood quote and the elevation certificate before you sign. Many homes are raised on piers, and ground-level enclosures below the flood level can affect both the insurance and the appraisal.
Wind coverage is a big part of the cost. Older homes usually need a 4-point inspection, and a wind mitigation inspection can lower your premium if the home has newer roof straps, shutters or impact windows. If private carriers will not write the home, Citizens Property Insurance is the state backstop.
For condos, Florida's post-Surfside laws require milestone inspections for older buildings of three stories or more and structural integrity reserve studies. Buildings with unfunded reserves or open repairs may not get conventional or FHA financing.
Your action plan
- Book a clarity call with William. No hard credit pull to start.
- Get pre-approved so you can move fast when a Key West listing hits.
- Pick the program: FHA, conventional, second home, jumbo or DSCR.
- Check HomeTown Heroes and Monroe County help if you live and work here.
- Get flood and wind insurance quotes before your inspection period ends.
- Shop with a local Keys agent, then lock your rate and close.
Key West mortgage FAQs
Where can I get the best conventional loan rates in Key West?
Rates depend on your credit, down payment, property type and loan amount. The best way to compare is to get Loan Estimates from more than one lender on the same day. Bold Mortgage offers many loan programs, and William gives you a side-by-side comparison so you can see the real cost of each option.
How do I qualify for an FHA loan in Key West?
You need a 580 or higher score for 3.5% down, steady income you can document, and a home you will live in. The loan must fit the 2026 Monroe County FHA limit of $990,150 for one unit.
Where can I apply for investor or DSCR mortgage programs in Key West?
You can apply with William at Bold Mortgage online. He will run the rent numbers with you and compare DSCR, conventional investment and bank statement options. Approval depends on credit, assets, the property and its rent.
Can I use Florida HomeTown Heroes in Key West?
Yes, if you are a first-time buyer working full time for a Florida-based employer and you meet the Monroe County income limit and the 640 score minimum. Funds are limited, so William checks availability once you have a signed contract.
Can I buy a second home in Key West with a small down payment?
A conventional second home loan can work with about 10% down if you use the home yourself and do not rent it out as a full-time rental. If you plan to rent it out, look at investor or DSCR loans instead.
About William A. Ledesma
William A. Ledesma is a Florida licensed mortgage loan officer and Florida HomeTown Heroes specialist with Bold Mortgage, a division of PRMG. He helps buyers, homeowners and investors in Key West and across Florida, in English and Spanish. Every client gets a clear action plan from pre-approval to closing.
- Call or text: (786) 387-3676
- Email: will@williamledesma.com
- Office: 4960 SW 72nd Ave, Suite 400, Miami, FL 33155
- Client reviews: Read reviews from William's clients
More Florida mortgage guides: Homestead, Kendall. Lea esta guía en español.
William A. Ledesma, NMLS #1232716. Bold Mortgage is a division of Paramount Residential Mortgage Group, Inc. (PRMG), NMLS #75243, Florida Mortgage Lender Servicer License MLD1608. Equal Housing Opportunity. This page is general information, not a commitment to lend. All loans are subject to credit approval, underwriting guidelines and property eligibility. Loan limits, program terms and down payment assistance funding can change without notice.
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