Mortgage Guide
Mortgage options for Sarasota
home buyers.
Understanding your financing options is one of the most important steps in the home buying process. Whether you are a first-time buyer, relocating from out of state, downsizing, or purchasing a luxury home, knowing what loan programs are available and which one fits your situation can save you time, money, and stress. I work with trusted local lenders who can guide you through every option with clear, honest advice.
A Resource from Kim Donahue
Why understanding mortgage options matters before you start looking.
Most buyers start their home search by looking at listings online. That is natural, but it can also lead to frustration when you fall in love with a home and only then discover it does not fit your financing options or budget.
The smarter approach is to understand your mortgage options first. When you know what loan programs you qualify for, what your monthly payment would actually look like, and how much cash you need at closing, you can shop for homes with confidence and clarity.
I am not a lender and do not make financing decisions. But I have spent more than 30 years helping buyers navigate the mortgage process, and I connect every client with trusted local lenders who can explain the details and answer your specific questions. This guide covers the most common programs and options available to buyers in Florida.
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Loan programs available for Florida home buyers.
Every buyer's situation is different. The right loan program depends on your credit, income, down payment savings, military service, and the type of property you are buying. Here is an overview of the most common programs my clients use.
Conventional Loans
Conventional loans are not backed by a government agency and are the most common type of mortgage. They are ideal for buyers with good credit and a stable income who can put at least 3% down.
FHA Loans
Insured by the Federal Housing Administration, FHA loans offer more flexible qualification standards, making them popular with first-time buyers and those with lower credit scores.
VA Loans
Backed by the U.S. Department of Veterans Affairs, VA loans are one of the strongest homeownership benefits available to those who have served our country.
USDA Loans
The USDA Single Family Housing Guaranteed Loan Program helps qualified buyers in eligible rural and suburban areas purchase a home with no down payment.
Jumbo Loans
Jumbo loans are used when the loan amount exceeds the conforming loan limit. They require stronger credit and larger down payments.
Section 2 of 5
Florida down payment and closing cost assistance programs.
Florida Housing offers several programs designed to help qualified buyers with down payments and closing costs. These programs can reduce the cash you need to bring to closing by thousands of dollars.
FL Assist
Up to $10,000 as a deferred 0% interest second mortgage for down payment and closing costs. No monthly payments required. Repaid when you sell, refinance, or no longer use the home as your primary residence.
Eligibility
Must use a Florida Housing first mortgage (FHA, VA, USDA, or conventional). Minimum 640 credit score. First-time homebuyer or repeat buyer in targeted areas.
Florida Homeownership Loan Program (FL HLP)
Up to $12,500 in down payment and closing cost assistance as a 3% fully amortizing 30-year second mortgage with a modest monthly payment (approximately $52 per month).
Eligibility
Same as FL Assist. For buyers who can handle a small second mortgage payment in exchange for higher assistance.
HFA Preferred / HFA Advantage PLUS
Conventional first mortgage (Fannie Mae HFA Preferred or Freddie Mac HFA Advantage) paired with a forgivable second mortgage. Receive 3%, 4%, or 5% of the first mortgage amount (up to $35,000). The second mortgage forgives 20% per year over five years.
Eligibility
Income at or below 80% Area Median Income. Minimum 640 credit score. Homebuyer education required. Forgiveness after 5 years of occupancy.
Florida Hometown Heroes Program
Up to $35,000 (or 5% of the loan amount, whichever is less) in down payment and closing cost assistance as a 0% interest, 30-year deferred second mortgage. For essential workers — healthcare, first responders, educators, military, and more.
Eligibility
Income limits vary by county (up to $158,100 in some areas). Must be a qualified workforce buyer. Subject to funding availability.
Programs can be stacked
Many buyers can combine a Florida Housing first mortgage with FL Assist or HFA Preferred PLUS, then add county-specific DPA programs for additional assistance. Program funding and requirements can change, so availability must be verified when you are ready to apply. All programs require completion of a homebuyer education course.
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Refinance options for Florida homeowners.
If you already own a home, refinancing can lower your monthly payment, reduce your interest rate, or help you access your equity. Here are the most common refinance options available in Florida.
Rate-and-Term Refinance
Lower your interest rate or change your loan term to reduce monthly payments or pay off your loan faster. Requires minimum 620 credit score and typically 5% equity.
Cash-Out Refinance
Access your home equity for home improvements, debt consolidation, or other financial goals. Maximum LTV of 80% for conventional loans, 85% for FHA, and 100% for VA.
FHA Streamline Refinance
For existing FHA loan holders. No appraisal required, minimal documentation, and must provide a net tangible benefit such as a 0.5% rate reduction. Requires 6+ months of on-time payments.
VA IRRRL (Interest Rate Reduction Refinance Loan)
For veterans with existing VA loans. No appraisal, no income verification required. Funding fee of 0.5%. New rate must be at least 0.5% lower than the current rate for fixed-to-fixed refinancing.
USDA Streamline Refinance
For existing USDA loan holders. Requires 12+ consecutive on-time payments and must reduce monthly payment by at least $50. No new appraisal needed. Income must stay within USDA limits.
Current refinance rates
As of August 2026, 30-year fixed refinance rates in Florida are approximately 6.50% to 7.00%, depending on credit score, equity, and loan amount. Credit unions may offer more competitive rates. Contact a lender for a personalized quote based on your specific situation.
Section 4 of 5
Closing costs and current rates in Florida.
Knowing what to expect for closing costs and current interest rates helps you budget realistically and avoid surprises at the closing table.
Typical closing costs for buyers
Buyers in Florida typically pay 2% to 5% of the purchase price in closing costs. On a $420,000 home, that is roughly $8,400 to $21,000.
Florida has above-average closing costs due to state-specific documentary stamp and intangible taxes. Costs vary by loan type, purchase price, county, and lender.
Approximate current mortgage rates
Rates as of August 2026. These are approximate ranges — your actual rate depends on credit score, down payment, loan amount, and lender.
Sources: Bankrate, Zillow, Rocket Mortgage, Redfin, Alpine Banker. Rates change daily and vary by lender. Contact a local lender for a personalized quote.
Understanding mortgage insurance
Mortgage insurance protects the lender, not you, if you default. But understanding when it applies, how much it costs, and when it can be removed is essential for budgeting. On conventional loans, private mortgage insurance (PMI) is required when your down payment is less than 20%. PMI can typically be removed once you reach 20% equity through payments or appreciation. FHA loans require mortgage insurance premiums (MIP) for the life of the loan regardless of down payment. VA loans have no mortgage insurance. USDA loans have guarantee fees that function similarly but at lower rates than conventional PMI or FHA MIP.
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How I help you navigate the mortgage process.
I am not a lender, but I have spent three decades helping buyers understand their options and connect with professionals who can make the process clear. Here is what working with me looks like.
Start with a Strategy
Before you look at homes, we sit down to understand your financial picture. We look at your current housing costs, your comfortable monthly budget, and what you can realistically afford including taxes, insurance, and HOA fees.
Connect with a Trusted Lender
I refer you to local lenders who know the Sarasota market and Florida-specific requirements. They explain your loan options, provide pre-approval, and help you understand the complete picture — not just the interest rate.
Explore Assistance Programs
We research available down payment assistance, Florida Housing programs, and any special financing options you may qualify for. Many buyers are surprised by how much help is available.
Get Pre-Approved
Once you choose the right loan program, your lender issues a pre-approval letter. This shows sellers you are a serious, qualified buyer and gives you a clear budget for your home search.
Find Your Home and Make an Offer
With your pre-approval in hand, we search for homes that fit your criteria. When we find the right one, I prepare a data-backed offer that accounts for financing contingencies and closing cost negotiations.
Close with Confidence
From appraisal to final walkthrough, I coordinate with your lender, title company, and all parties to make sure every document and deadline is handled. You walk into closing knowing exactly what to expect.
Trusted lender referrals
I only refer clients to lenders I know personally and trust. These are professionals who communicate clearly, close on time, and understand the specific challenges of Florida real estate — insurance requirements, flood zones, 55-plus communities, and unique property types. If you need a lender, I can connect you with the right person.
Frequently Asked Questions
Common questions about mortgage financing in Florida.
What credit score do I need to buy a home in Florida?
Credit score requirements vary by loan program. Conventional loans typically require a minimum of 620. FHA loans accept scores as low as 580 with 3.5% down, or 500 to 579 with 10% down. VA loans have no official minimum, though most lenders prefer 580 to 640. USDA loans typically require 640 for automated underwriting. Florida Housing programs require a minimum of 640. A higher credit score generally means a lower interest rate and better loan terms.
How much down payment do I need for a home in Sarasota?
The down payment depends on the loan program. USDA and VA loans offer zero-down financing for qualified buyers. Conventional loans are available with as little as 3% down through Fannie Mae HomeReady and Freddie Mac Home Possible programs. FHA loans require 3.5% down. Down payment assistance programs through Florida Housing can help reduce or eliminate the cash you need from savings. I help clients explore all of these options before they start looking at homes.
What is the Florida down payment assistance program?
Florida Housing offers several programs. FL Assist provides up to $10,000 as a deferred 0% interest second mortgage with no monthly payments. The Florida Homeownership Loan Program (FL HLP) offers up to $12,500 at 3% interest with a small monthly payment. HFA Preferred and HFA Advantage PLUS offer forgivable second mortgages of 3% to 5% of the loan amount that forgive 20% per year over five years. The Florida Hometown Heroes program provides up to $35,000 in assistance for qualified essential workers. Availability and eligibility requirements vary.
What are current mortgage rates in Florida?
As of August 2026, mortgage rates in Florida are approximately 6.61% to 6.75% for a 30-year fixed-rate conventional loan, 5.92% to 6.12% for a 15-year fixed, 5.50% to 6.48% for FHA loans, and 6.28% to 6.49% for VA loans. Rates change daily and vary significantly by lender, credit score, down payment, and loan amount. The best way to get an accurate rate is to speak with a local lender who can evaluate your specific situation.
What closing costs should I expect when buying a home in Florida?
Buyers in Florida typically pay 2% to 5% of the purchase price in closing costs. On a $420,000 home, that is roughly $8,400 to $21,000. Major costs include documentary stamp taxes ($0.35 per $100 of loan amount), intangible tax on the mortgage, title insurance, lender fees, recording fees, appraisal, home inspection, and prepaid items such as property taxes and homeowners insurance. Florida has above-average closing costs due to state-specific transfer taxes.
Can I buy a home in Florida with no money down?
Yes. Qualified veterans and active-duty service members can use VA loans with no down payment. USDA loans offer 100% financing for eligible buyers in approved areas of Sarasota, Manatee, and Charlotte Counties. Down payment assistance programs can also be combined with conventional, FHA, VA, and USDA first mortgages to reduce or eliminate the cash you need at closing. Many first-time buyers are surprised by how many options exist for low- and no-down-payment financing.
How do FHA loans work in Florida?
FHA loans are insured by the Federal Housing Administration and allow qualified buyers to purchase with as little as 3.5% down if their credit score is 580 or higher. They offer more flexible debt-to-income ratios, up to approximately 57% DTI in some cases. FHA loans require mortgage insurance premiums (MIP) for the life of the loan — an upfront premium of 1.75% of the loan amount plus an annual premium. Loan limits vary by county.
What are the benefits of a VA loan?
VA loans offer eligible veterans, active-duty service members, National Guard, Reserves, and qualifying surviving spouses zero-down financing with no private mortgage insurance (PMI). Interest rates are typically lower than conventional loans. The VA funding fee can be rolled into the loan amount. Qualification standards are often more flexible, and there are no prepayment penalties. The VA loan benefit has no expiration and can be used multiple times over your lifetime.
What is mortgage insurance and when do I need it?
Mortgage insurance protects the lender if you default. Conventional loans require private mortgage insurance (PMI) when your down payment is less than 20%. PMI can typically be removed once you reach 20% equity. FHA loans require mortgage insurance premiums (MIP) for the life of the loan regardless of down payment size. VA loans have no PMI. USDA loans have an upfront guarantee fee (1%) and an annual fee (0.35%), which are both lower than conventional PMI or FHA MIP.
Are there refinance options for Florida homeowners?
Yes. Rate-and-term refinancing allows you to lower your interest rate or change your loan term. Cash-out refinancing lets you access your home equity for improvements, debt consolidation, or other needs with maximum LTV of 80% for conventional loans. FHA Streamline, VA IRRRL, and USDA Streamline programs offer simplified refinancing for existing borrowers with reduced documentation and no appraisal required in most cases.
What is the conforming loan limit in Florida for 2026?
The FHFA baseline conforming loan limit for 2026 is $832,750 for a single-unit property. In high-cost counties, limits may reach up to $1,249,125. Loans above these amounts are considered jumbo loans and typically require higher credit scores (700+), larger down payments (10% to 20% or more), and substantial cash reserves.
How do I get pre-approved for a mortgage?
Getting pre-approved starts with choosing a reputable lender and completing a mortgage application. You will provide pay stubs, W-2s or tax returns, bank statements, and identification. The lender reviews your credit, income, assets, and debt-to-income ratio to determine how much you can borrow. A pre-approval letter shows sellers you are a serious, qualified buyer. I can connect you with trusted local lenders who know the Sarasota market and Florida-specific requirements.
More Resources
Continue learning about buying a home in Sarasota.
First-Time Homebuyer Guide
Learn about zero-down financing, DPA, and builder incentives for first-time buyers.
Buying Guide
The complete step-by-step guide to buying a home in Sarasota, Manatee, and Charlotte Counties.
New Construction
Explore new construction communities and builder incentives across the region.
Contact Kim
Schedule a consultation to discuss your mortgage options and home buying goals.
Blog & Articles
Market updates, neighborhood guides, and insights for Sarasota home buyers.
FAQ
Answers to common questions about moving to Sarasota, buying, and selling.
Ready to Get Started?
Have questions about mortgage options?
Contact Kim Donahue to discuss your situation and get connected with trusted lending partners who can help you find the right financing for your next home.