A clear and honest breakdown of common financing options. There isn’t one loan program that’s best for everyone. The right fit depends on your credit, down payment, where you’re buying, and how long you expect to stay in the home.

It’s important to understand both the benefits and the trade-offs.

Conventional Loans

Best For: Buyers with stronger credit, lower debt, and long-term homeownership plans.

Pros:

• As low as 3% down for some first-time buyers
• Mortgage insurance can be removed after you build enough equity
• Often the lowest lifetime cost for well-qualified buyers
• Higher loan limits than FHA in many areas
• More flexible on property type (single-family, townhomes, some condos, and in some cases second homes / investments)

What you should also consider:

• Typically requires a 620+ credit score (often higher for best pricing)
• Lower down payment can mean a higher rate and higher mortgage insurance cost
• Stricter rules on debt-to-income and reserves
• Seller contributions toward closing costs are capped, usually 3–6% depending on your down payment

FHA Loans

Best For: Buyers rebuilding credit or needing more flexible approval standards.

Pros:

• 3.5% down with a 580+ credit score
• More forgiving on past financial challenges (like bankruptcy or foreclosure, once timelines are met)
• Allows higher debt-to-income ratios, which can help with buying power

What you should also consider:

• Mortgage Insurance Premium (MIP) is required for the life of the loan if you put less than 10% down
• Upfront MIP (typically 1.75% of the loan) is added to closing costs or financed into the loan
• Lower loan limits than Conventional in many markets
• Stricter appraisal/condition standards on the property

VA Loans

Best For: Eligible active-duty military, Guard/Reserves, veterans, and qualifying surviving spouses.

Pros:

• 0% down payment for eligible borrowers
• No monthly mortgage insurance
• Flexible underwriting and strong buyer protections
• VA loans are assumable by qualified buyers, which can be valuable if rates rise

What you should also consider:

• VA funding fee applies unless exempt (amount depends on service history, down payment, and first-time vs. subsequent use)
• If you sell after a short time, the funding fee can eat into your net proceeds
• VA appraisal standards can limit certain properties based on condition and type
• Must be used for a primary residence

USDA Loans

Best For: Buyers with moderate income purchasing in USDA-eligible rural or semi-rural areas.

Pros:

• 0% down payment
• Lower monthly mortgage insurance than FHA
• Helps stretch affordability in qualifying locations

What you should also consider:

• Only available in USDA-designated eligible areas
• Household income limits apply (includes income from all adults living in the home)
• Upfront guarantee fee and annual fee (built into payment)
• Processing can take longer if manual review is needed
• Must be used for a primary residence

Hometown Heroes Program

Best For: First-time homebuyers (with some exceptions for veterans) who work full-time for a Florida-based employer in certain service-oriented career fields.

Hometown Heroes focuses on full-time Florida workers in specific service-driven fields, such as:

• Healthcare Workers
• K–12 School Staff (teachers, administrators, and support roles in K–12 settings)
• First Responders (firefighters, EMTs, paramedics)
• Public Safety / Law Enforcement / Corrections
• Court System Employees
• Child-Care Workers (in licensed or approved settings)
• Active-Duty Military, Reserves, National Guard & Veterans

The exact list is detailed and can change, so buyers should always confirm current eligibility with a participating Hometown Heroes lender or the Florida Housing Finance Corporation.

Pros:

• Up to $35,000 toward down payment and closing costs
• 0% interest, deferred second mortgage
• Can be paired with FHA, VA, USDA, or Conventional loans
• Designed to help essential workers and military families live in the communities they serve

What you should also consider:

• The assistance is typically repaid when you sell, refinance, or move out (it’s a second lien)
• Income and purchase price limits apply
• Must use a participating lender and meet program guidelines
• Extra documentation and program steps can add a bit of complexity to the process

Florida HFA Preferred Conventional Loan

Best For: Low- to moderate-income buyers who want a Conventional loan with reduced mortgage insurance.

Pros:

• 30-year fixed-rate mortgage
• Reduced mortgage insurance costs vs. many standard Conventional options
• MI can be canceled once you have enough equity

What you should also consider:

• Income and purchase price limits apply
• Must work with a Florida Housing-approved lender
• Conventional credit standards (typically 640+ FICO)

Florida HFA Preferred 3% Plus

Best For: First-time buyers who need help with upfront costs but prefer Conventional loan terms.

Pros:

• 3% down payment
• Additional 3% assistance (typically structured as a forgivable benefit) toward down payment and/or closing costs
• Lower mortgage insurance and cancellable MI over time
• Can help buyers build equity faster than some government-backed options

What you should also consider:

• Income and purchase price limits apply
• Homebuyer education is required
• Conventional underwriting standards (often 640+ credit score)
• Not ideal if you know you’ll move again in just a few years, since some benefits accrue over time

Florida Assist Second Mortgage

Best For: Buyers who have stable income but are short on cash for down payment and closing costs.

Pros:

• Up to $10,000 for down payment or closing costs
• 0% interest and no monthly payments
• Helps reduce the upfront cash needed to buy

What you should also consider:

• The amount must be repaid when you sell, refinance, or move out
• Creates a second lien on your property, which affects equity at resale
• Only available when paired with an eligible Florida Housing first mortgage

HFA Preferred Grant

Best For: Buyers who plan to stay in the home long enough for grant forgiveness.

Pros:

• 3–5% assistance that’s forgiven over a set period (commonly five years)
• Can be used for down payment and/or closing costs
• Works with Conventional loans that offer cancellable mortgage insurance

What you should also consider:

• Leaving or refinancing before the forgiveness period may trigger repayment
• Income and purchase price caps apply
• Limited to participating lenders and subject to funding availability

Quick “Best Fit” Snapshot

• Want the lowest long-term cost and have solid credit? → Conventional
• Need flexible approval or lower credit? → FHA
• Eligible military / veteran and want 0% down? → VA
• Buying in a rural-eligible area with moderate income? → USDA
• Need help with down payment/closing costs and serve the community? → Hometown Heroes + Florida Housing programs

All of these programs are intended for primary residences, not second homes or investment properties.

Disclaimer

This page is for educational purposes only and should not be considered financial, tax, or legal advice. Loan terms, program rules, and eligibility requirements can change and may vary by lender and location. Always verify current details and get personalized guidance from a licensed mortgage professional before making any financing decisions.