Government loan programs

FHA loans

An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through Mortgage Insurance Premiums (MIP) in case the borrower defaults on his or her loan obligations.  Available to all buyers, FHA loan programs are designed to help creditworthy low-income and moderate-income families who do not meet requirements for conventional loans.

FHA loan programs are particularly beneficial to those buyers with less available cash and those that need to stretch their debt ratios.  The rates on FHA loans are generally lower than conventional rates.  At this time, there are some conventional loan programs that allow for only 3% down rather than 3.5% for FHA, but the credit scores need to be higher for the conventional loans.  The mortgage insurance is less expensive for the conventional loans. 

Some of the other benefits of FHA financing:

  • Only a 3.5 percent down payment is required.
  • Seller can pay borrowers closing costs up to 6% of the purchase price.
  • More flexible underwriting criteria than conventional loans
  • Loans are assumable to qualified buyers.
  • Loans are for those buyers who will be occupying the home as their primary residence.
  • The MIP stays on the loan for the life of the loan!   

VA Loans

VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan.  In most cases, no down payment is required on a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily conventional loans.

Other benefits of a VA loan include:

  • Closing costs are comparable to other financing types.
  • No private mortgage insurance requirement.
  • Right to prepay loan without penalties
  • The Mortgage can be assumed by the new buyer when a home is sold 

Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount.

A VA loan can be used to buy a home, build a home and even improve a home with energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.

USDA Loans

USDA Loans are available in certain areas of Florida.  They are insured by the United States Department of Agriculture, and designed for more rural areas.  But if you check their map, it is available in parts of the eastern Sarasota and Manatee County areas, east of I-75. 

They are 100% financing, and allow sellers to pay the majority of the buyers closing costs. 

For more information about these great programs, please give me a call, Sherry Bitner, 941-504-1445 or email me at

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