Types of home loans, explained for Northeast Florida buyers

Before the programs

Start with what you have, not with what a program is called

Buyers usually arrive having already decided which loan they want, based on something they read. That is backwards. The loan follows three facts about you and one fact about the house.

Program one

VA loans

Jacksonville has NAS Jacksonville, NS Mayport, Blount Island and Kings Bay just over the Georgia line, plus Camp Blanding out past Middleburg. A very large share of the buyers I work with are eligible for a VA loan and do not fully understand what it is worth.

• No down payment required on most purchases, and no monthly mortgage insurance at all — that second point is the one people miss, and over thirty years it is worth more than the first.
• A funding fee instead. The VA publishes the schedule; first use with no down payment is 2.15% of the loan amount and subsequent use is 3.3%, financed into the loan rather than paid at the table. Veterans receiving compensation for a service-connected disability are exempt from it entirely.
• The appraisal is also a condition review. A VA appraiser checks the property against Minimum Property Requirements. That is a separate matter from your own home inspection, and it catches different things.
• Entitlement is reusable. Having used a VA loan before does not mean you cannot use one again.

Funding fee percentages above are from the Department of Veterans Affairs, current as of August 2026. Confirm your own figure at va.gov — the rate varies with down payment and prior use.

There is more detail on the VA appraisal and how it interacts with your inspection on my VA appraisal and inspections page.

Program two

FHA loans

FHA is the workhorse for buyers whose credit is real-world rather than pristine. It allows a lower score than conventional financing and asks 3.5% down at the standard tier.

The trade is mortgage insurance. FHA charges an upfront premium financed into the loan and an annual premium collected monthly, and on most modern FHA loans that annual premium stays for the life of the loan. Refinancing out of it later is the usual exit. That is not a reason to avoid FHA — it is a reason to price it honestly against a conventional loan before you choose.

FHA loan limits are set county by county by HUD and change every year. Do not trust a figure you read on a blog, including this one — look yours up on the HUD FHA mortgage limits lookup or ask your lender.

Program three

USDA Rural Development loans

The most underused program in this market, because the word rural makes people assume it means a farm. It does not. USDA eligibility is drawn on a map, and large parts of Baker and Bradford counties, the outer edges of Clay County past Middleburg, and stretches of Putnam and Nassau are inside it.

• No down payment for buyers who qualify.
• Two tests, both of which must pass. The property has to sit inside an eligible area, and your household income has to sit under the limit for that county and household size.
• Guarantee fees apply, upfront and annual, in place of conventional mortgage insurance.
• Owner-occupied only. This is not an investor program.

Check the address before you fall in love with the house, on the USDA property eligibility map. Boundaries get redrawn, and a house that qualified three years ago may not today.

Program four

Conventional loans

Conventional means a loan written to Fannie Mae or Freddie Mac guidelines rather than backed by a government agency. It is the default for buyers with strong credit, and it has one advantage none of the others can match: the mortgage insurance goes away.

• Down payments start at 3% for some first-time buyer products, and 5% is common.
• Private mortgage insurance applies below 20% down, but it is cancellable once you reach sufficient equity — unlike most FHA mortgage insurance.
• Pricing is credit-sensitive. The gap between a 680 and a 760 borrower is real money every month.
• The 2026 baseline conforming loan limit for a one-unit property is $832,750 in most of the country, per the Federal Housing Finance Agency announcement of November 2025. Above that you are into jumbo territory.

For most Northeast Florida price points, conventional versus FHA comes down to a monthly-payment comparison your lender can run in ten minutes. Ask for it in writing, side by side.

Program five

Jumbo loans

A jumbo loan is simply one above the conforming limit, which means no agency is standing behind it and the lender is holding the risk. Expect a tighter file: larger down payment, deeper reserves, more documentation, and sometimes two appraisals.

In this market that mostly means Ponte Vedra, the Beaches, riverfront, and larger acreage tracts. If you are shopping in that band, get the jumbo conversation started early — the underwriting timeline is not the same as a conventional file, and a thirty-day close is optimistic.

Program six

Florida Hometown Heroes and down payment assistance

Florida Housing Finance Corporation runs the Hometown Heroes program for full-time employed Floridians buying a primary residence. It is a second mortgage that covers down payment and closing costs, layered on top of a first mortgage — it is not a loan program by itself.

As published by the program administrator, eHousingPlus, in August 2026: assistance of 5% of the first mortgage amount up to a maximum of $35,000, a minimum credit score of 640, and it can be paired with FHA, VA, USDA-RD or conventional HFA products. Funding is finite and rounds run out. Confirm the current terms with a participating lender before you plan around it — see the Florida Housing site for the official program page.

Side by side

The short comparison