Last updated: June 2025
This blog is for educational purposes only, not an offer of credit or advertisement for current loan terms. It does not provide legal advice. Refer to our loan web pages or consult professional advisors for specific information.
Delray Beach, Florida, attracts thousands of retirees annually with its coastal charm, vibrant communities, and warm climate. If you plan to relocate in retirement, understanding how to finance your next home is crucial. While retirees can absolutely qualify for a mortgage, the process requires planning, especially if you no longer earn a traditional income.
Reach your dream of a Delray Beach home for retirement. Start an application with MIDFLORIDA Credit Union.
Why Delray Beach is a popular retirement destination
Located in Palm Beach County, Delray Beach offers more than sun and sand. The area features a lively downtown, robust healthcare infrastructure, and a range of 55+ and maintenance-free communities designed for retirees. The housing market includes everything from beachfront condos to one-story villas with low HOA fees. The cost of living remains competitive compared to other coastal towns in South Florida, making it an appealing option for retirees seeking to stretch their fixed incomes. With year-round sunshine and proximity to Boca Raton and West Palm Beach, Delray Beach offers access to both leisure and essential amenities.
Can retirees qualify for a mortgage in Florida?
Yes—retirees can qualify for a mortgage in Delray Beach, even without active employment. Lenders evaluate financial readiness differently when applicants rely on retirement income rather than wages. Mortgage approval is still based on standard criteria, such as credit score, debt-to-income (DTI) ratio, and documented income; however, there’s more flexibility in how income is verified.
Typical qualifying income sources for retirees
- Social Security benefits
- Pension income
- IRA or 401(k) distributions
- Investment dividends or interest
- Annuity payments
- Asset depletion (liquidation of savings over time)
A strong credit profile and sufficient reserves can offset lower monthly income. Lenders want to see that your retirement income or assets can reasonably support the loan for its full term.
Tips for qualifying on fixed or non-traditional income
If you're not receiving a steady paycheck, you'll need to show alternative income sources.
Here’s how retirees can qualify for a mortgage using various financial strategies:
- Social Security and pension income: These are considered stable and are usually grossed up by 15–25% for qualifying purposes, since they are non-taxable. Bring award letters and proof of direct deposit.
- IRA and 401(k) withdrawals: Lenders count consistent distributions as income. Alternatively, some use asset depletion calculations, where they divide total retirement savings by an assumed term (typically 360 months) to derive qualifying income.
- Investment income: Income from interest-bearing accounts, dividends, or annuities can be used if they have a consistent track record of returns. You’ll need two years of tax returns and recent account statements.
- Asset-based lending: In some cases, high-net-worth retirees may qualify for loans based solely on their liquid assets. These mortgages don't require monthly income, just proof of sufficient capital to cover payments, taxes, and insurance.
Retirees should maintain minimal revolving debt and avoid large purchases before applying. Keeping your debt-to-income ratio below 43% can improve approval odds and interest rate options.
Choosing the right property type for retirement living
Delray Beach offers a variety of housing options. Choosing the right type affects not just lifestyle, but also mortgage terms and monthly costs.
- Single-family homes offer privacy and space, but they also come with higher maintenance responsibilities.
- Condominiums often appeal to retirees looking for maintenance-free living. However, condos have HOA fees, which are factored into your debt-to-income ratio and can limit your borrowing power.
- 55+ communities typically offer amenities such as pools, gyms, and group activities. Some have stricter resale and rental rules, which lenders may review during the underwriting process.
- Villas and townhomes strike a balance between space and low upkeep. These may also incur HOA fees, but typically at a lower rate than full-service condos.
When comparing properties, factor in monthly insurance premiums, HOA dues, and property taxes to get a comprehensive view. Florida offers homestead exemptions for full-time residents, which can reduce long-term tax burdens.
What to expect during the mortgage process after retirement
While retirees can qualify for conventional loans, the process may take longer due to the complexities of income verification. Being fully prepared with documentation is the best way to avoid underwriting delays.
Here’s what you’ll need:
- Two years of tax returns (or proof of tax-exempt income)
- Recent retirement account statements
- Social Security award letters
- Documentation of pension or annuity income
- Proof of homeowners' insurance (quotes are sufficient pre-closing)
In Florida, property insurance is especially important. Older homes may require a four-point inspection to qualify for coverage. This inspection assesses the age and condition of the roof, electrical, HVAC, and plumbing systems. If the home is in a flood zone, you’ll also need flood insurance to satisfy mortgage requirements. For best results, get pre-approved before house-hunting. A pre-approval confirms your borrowing power and signals to sellers that you’re ready to close.
FAQ: Mortgages for retirees in Delray, FL
What credit score do retirees need for a Florida mortgage?
Most conventional lenders require a credit score of at least 620, but a score of 740 or higher may yield better interest rates and loan terms.
Can I use Social Security income to qualify for a mortgage?
Yes. Social Security is considered stable income. It’s typically grossed up by 15% to 25% if it’s non-taxable, boosting your qualifying power.
Do lenders accept investment income or IRA withdrawals?
Yes, if withdrawals are consistent or can be documented with tax returns and statements. Some lenders also allow asset depletion calculations as an income proxy.
Should I pay cash or finance a retirement home?
It depends on your financial goals. Paying cash eliminates monthly payments but reduces liquidity. Financing preserves capital, especially if interest rates are favorable and investment returns exceed borrowing costs.
Are condos in Delray Beach a good choice for retirees?
Many retirees prefer condos for their low maintenance and amenities. However, HOA fees and rules vary, so it’s important to review budgets and bylaws carefully.
Finding a Delray home for your retirement years
Relocating to Delray Beach in retirement offers a vibrant lifestyle and a welcoming real estate market. With the right strategy and documentation, retirees can secure a mortgage that supports both comfort and financial stability. Whether you plan to purchase a condo, villa, or single-family home, understanding how to qualify with fixed income or assets is key to a successful transition. Buying a home in Delray, Florida, for your retirement years? Start an application with MIDFLORIDA Credit Union today and see what your options are.
