Second Mortgage in Florida

Not on a rental held in an LLC, and usually not on one nobody in your family lives in. Article X, section 4(a) of the Florida Constitution attaches homestead to property owned by a natural person, and inside a municipality limits it to the residence of the owner or the owner's family. An LLC is not a natural person, so an investment property it holds is not homestead. Florida also lets an owner mortgage even a true homestead voluntarily under section 4(c); the protection is against forced sale for unsecured judgments, not against a mortgage the owner signs. Our program lends only on non-owner-occupied investment property, never a primary residence or second home. This is not legal advice; your attorney or title company has the final say on your property.

Florida's residential mortgage loan definition turns on purpose, not lien position. Section 494.001(25)(a) defines a covered residential mortgage loan as one primarily for personal, family, or household use secured on a dwelling, and nothing in those definitions separates a first from a second. Section 494.001(4) defines a business purpose loan as one whose proceeds the borrower intends to use primarily for a business purpose, judged by the CFPB's official interpretation of 12 C.F.R. 1026.3(a). That interpretation deems credit to acquire, improve or maintain a non-owner-occupied rental to be business purpose, but not if the owner expects to occupy the property for more than 14 days in the coming year, and otherwise each loan is judged on its primary purpose. Section 494.0025(4)(d) makes it a violation to misrepresent a residential loan as a business purpose loan. Our program is for business-purpose use of the funds only. This is not a licensing opinion; talk to your attorney about your own structure.

It goes through court, and a second lender named in the case is cut off by the sale and has to claim any surplus itself. Florida forecloses only through the courts under Chapter 702, with no power of sale, and the clerk runs the sale under section 45.031. A subordinate lienholder can redeem only up to the later of the certificate of sale or the time set in the judgment; there is no redemption after the sale under section 45.0315. Under Florida case law, a junior lienholder joined in the senior foreclosure is foreclosed out, while one left out of the case keeps its lien. If the sale brings more than the judgment, section 45.032 pays subordinate lienholders who file a timely claim before the former owner, so the surplus is not paid to a second lender automatically, and surplus still with the clerk one year after the sale is presumed unclaimed. Section 702.06 caps a deficiency only on owner-occupied residential property, and we found no Florida rule that bars a deficiency claim on an investment property. Read lien position explained before you stack debt.

The same two taxes as a first mortgage, on the second's own amount: about 0.55% combined. A recorded mortgage pays documentary stamp tax of 35 cents per $100 under section 201.08(1)(b), with no cap for a recorded mortgage, and nonrecurring intangible tax of 2 mills (0.2%) under section 199.133. On a $150,000 second that is $150,000 x 0.55% = $825, an illustration, not a quote. The intangible tax applies only to the extent the note is secured by Florida real property. A line of credit is taxed differently: doc stamps are paid on each advance as it is made, and section 199.143(3) charges intangible tax once on the maximum amount of a revolving line. The county clerk's recording fees come on top. None of these are USA Mortgage fees.

Not automatically. The second-lien holder generally has to sign a resubordination agreement. We found no Florida statute that keeps a junior lien in position when the first is refinanced, and refinancing lenders generally ask for a recorded resubordination agreement before they close. Florida courts can also apply equitable subrogation, letting the refinancing lender step into the paid-off first's priority up to the amount of that payoff plus interest, fees and costs, so cash-out above the old balance does not jump ahead of the second under that doctrine. Separately, if your first mortgage secures future advances, section 697.04 puts those advances ahead of later liens up to the maximum principal stated in it, so a second is underwritten against that stated maximum, not today's balance. See a second lien behind a DSCR or conventional first. This is not legal advice; your attorney or title company has the final say.

The program accepts short-term rentals, but where yours sits decides whether it can operate. Section 509.032(7)(b) says a local law may not prohibit vacation rentals or regulate how long or how often they are rented, but that bar does not apply to local rules adopted on or before June 1, 2011, so older city and county rules survive and vary by place. Under section 509.242 a single-family to four-family house can be a vacation rental, and section 509.241(1) requires each one to be licensed by the state. Check the license and the local rules for your address before you count short-term income. Short-term rentals are eligible for our program, subject to underwriting.