Second Mortgage in Miami

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 ties 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 (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. How the rules apply to a 2 to 4 unit building where you live in one unit is not settled by anything we found. This is not legal advice; your attorney or title company has the final say on your property.

It goes through court, and a second lender named in the case 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. In Miami-Dade, mortgage foreclosure sales are held online at miamidade.realforeclose.com, and bidders must register before they can bid; the sale is complete when the winning bidder's full payment arrives on time, and a certificate of sale then issues. A subordinate lienholder can redeem only up to the later of the certificate of sale or the time set in the judgment; after that there is no redemption. 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. Under Florida case law, a junior lienholder joined in the senior foreclosure is foreclosed out by the sale, so a default on the first can cut off the second. Read lien position explained before you stack debt.

Florida's two mortgage taxes, about 0.55% of the loan combined, plus the Clerk's page fees. A recorded mortgage, first or second, 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 Miami-Dade Clerk lists most documents at $10 for the first page and $8.50 for each additional page, so a 12-page mortgage would record for $10 + 11 x $8.50 = $103.50. The Clerk computes and collects the fees and mortgage taxes at recording, accepts eRecording through approved vendors, and does not guarantee same-day recording. None of these are USA Mortgage fees; they are the state's and the county's.

The two taxes follow different rules for draws. For documentary stamps, section 201.08(1)(b) says a mortgage securing future advances pays at recording on the initial amount, excluding future advances, and then on each advance as it is made. Leaving that tax unpaid does not affect the lien, but the mortgage cannot be enforced in a Florida court as to that advance until it is paid. For intangible tax, section 199.143(3) charges a revolving line of credit once, on the maximum amount of the line, with no further intangible tax on borrowing under it; section 199.143(1) charges other future advances each time one is made. So how a line is written changes when the tax is due. Our second mortgage comes as a lump sum or a line of credit, subject to underwriting; compare the two in second mortgage vs HELOC on investment property.

The program accepts short-term rentals, but the local rules decide whether yours can operate. Miami Beach prohibits short-term rental, meaning under six months and one day, in all single-family homes and in many multifamily districts. In unincorporated Miami-Dade, a Certificate of Use is required before listing and is renewed yearly, and in Estate or Low Density areas of the county plan the property must be a residence where the responsible party lives more than six months a year (County Code section 33-28). Florida's section 509.032(7)(b) bars new local bans, but rules adopted on or before June 1, 2011 survive, so check the city your property sits in before you count short-term income. Short-term rentals are eligible for our program, subject to underwriting.

Florida draws the line at purpose, by its own definitions. Chapter 494 defines a covered residential mortgage loan as one primarily for personal, family, or household use, and 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. The statute also makes it a violation to present 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.