FHA and VA Home Loan Programs
Government-backed mortgage programs can offer additional financing options for eligible homebuyers. For the FHA and VA loans discussed here, participating lenders provide the financing, while the government agency insures or guarantees the loan.
Platinum Advantage Mortgage helps borrowers throughout Florida compare these programs with available conventional financing.
FHA Loans
FHA loans are insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development.
FHA financing is available to eligible first-time and repeat homebuyers. It is not limited to low-income households or borrowers who cannot qualify for conventional financing.
Features may include:
• Down payments as low as 3.5% for eligible borrowers who meet applicable credit and underwriting requirements.
• Gift funds from eligible sources toward the down payment and closing costs, subject to documentation requirements.
• Seller and other interested-party contributions toward eligible closing costs, generally limited to 6% of the sales price.
• Underwriting guidelines that may accommodate some borrowers whose circumstances do not fit conventional requirements.
Seller contributions cannot satisfy the borrower’s required down payment. Eligible gift funds follow separate rules and are not subject to the same 6% seller-contribution limit.
FHA Mortgage Insurance
Most FHA purchase loans require both an upfront mortgage insurance premium and an annual premium collected through monthly payments.
For most newly originated FHA loans, annual mortgage insurance generally continues:
• For 11 years when the original loan-to-value ratio is 90% or less.
• For the loan term when the original loan-to-value ratio exceeds 90%.
Building equity alone generally does not cancel mortgage insurance on a newer FHA loan. Refinancing may be an option, but eligibility, costs, and future rates must be evaluated.
FHA loans also have loan limits and property requirements. We help you compare the total cost with other available financing.
VA Loans
VA-backed loans are available to eligible Veterans, service members, and certain surviving spouses. Participating lenders make the loans, and the U.S. Department of Veterans Affairs guarantees a portion.
Potential benefits include:
• No down payment for many eligible borrowers, subject to entitlement, lender requirements, and the property’s value.
• No monthly mortgage insurance requirement.
• No penalty for paying the loan off early.
• Purchase and refinance options, subject to eligibility and program requirements.
No down payment does not mean no closing costs. A down payment or additional cash may be necessary in some situations, including when the purchase price exceeds the VA-appraised value.
VA Funding Fee
A one-time VA funding fee generally applies unless the borrower qualifies for an exemption. The amount depends on the loan type and, for certain loans, previous use of the benefit and down payment.
Eligible exemptions include certain borrowers receiving or entitled to VA disability compensation, eligible surviving spouses, and qualifying active-duty Purple Heart recipients. Other qualifying circumstances may apply. Exemption status must be verified.
For a VA purchase loan, the funding fee can generally be financed. Other closing costs generally cannot be added to the loan amount.
Seller Contributions
Sellers may agree to pay eligible closing costs. VA distinguishes ordinary closing-cost payments from seller concessions, which generally cannot exceed 4% of the property’s VA-established reasonable value.
We help identify which items fall into each category.
Eligibility and Loan Approval
A Certificate of Eligibility establishes eligibility for the VA home loan benefit. It does not guarantee loan approval.
The lender must also evaluate credit, income, applicable residual-income requirements, and the property.
Loan Assumptions
FHA and VA loans may be assumable, subject to applicable approval requirements. An assumption does not automatically release the seller from liability. For VA loans, it also does not automatically restore the seller’s entitlement.
Compare Your Options
The right financing depends on your eligibility, available funds, monthly budget, and longer-term plans. FHA or VA financing is not automatically the lowest-cost choice for every borrower.
Call Platinum Advantage Mortgage at 407-341-4313 or email rjolley@platinumadm.com.
Platinum Advantage Mortgage is an independent mortgage brokerage and is not a government agency or affiliated with FHA, HUD, or the Department of Veterans Affairs.
Loan approval is subject to lender underwriting requirements. Rates, terms, and program availability are subject to change.