Buyer education
Types of home loans, and how coastal property changes them
Most loan guides describe programs as though every house were the same. On this coast they are not. A condo on the ocean, a dock property on the Intracoastal and a second home at Vilano each break a different rule.
The default
Conventional financing
Conventional means a loan written to Fannie Mae or Freddie Mac guidelines. On the coast it is the most common product simply because price points here sit above where the government programs are comfortable, and because a lot of coastal buyers are not first-time buyers.
- Down payments start at 3% on some first-time buyer products; 5% to 20% is the normal working range.
- Private mortgage insurance applies below 20% down, and unlike FHA insurance it can be cancelled once you hold enough equity.
- Pricing is credit-sensitive, and the gap between a 680 and a 760 file is real money every month.
- Second homes and investment properties are conventional territory. FHA, VA and USDA all require you to occupy the property. If you are buying a beach place you will not live in year-round, this is the aisle you are shopping in, and the down payment and rate will both be higher than for a primary residence.
The 2026 baseline conforming limit for a one-unit property is $832,750 in most of the country, announced by the Federal Housing Finance Agency in November 2025. Above that you are into jumbo financing, which is a different conversation and which I have written up separately on my jumbo and condo financing page.
For the military community
VA loans
I served six years in the Navy and I hold the Military Relocation Professional designation, and between Mayport, NAS Jacksonville and Kings Bay a large share of my buyers are eligible. The VA benefit is the strongest financing tool in this market and it is regularly left on the table.
- No down payment on most purchases, and no monthly mortgage insurance ever — the second point is worth more over thirty years than the first.
- A funding fee instead. Per the Department of Veterans Affairs, first use with no down payment is 2.15% of the loan amount, and subsequent use is 3.3%, financed into the loan. Veterans receiving compensation for a service-connected disability are exempt.
- The appraisal doubles as a condition review against VA Minimum Property Requirements. On older beach houses, roof age and wood-destroying organism damage are the two that bite.
- Condos must be on the VA-approved list. This is the single biggest coastal complication. A gorgeous oceanfront building that is not approved simply cannot be bought with a VA loan, and approval is a project measured in months, not days.
Funding fee figures are current as of August 2026; confirm yours at va.gov.
The entry point
FHA loans
FHA asks 3.5% down at the standard tier and tolerates lower credit scores than conventional financing. The trade is mortgage insurance: an upfront premium financed into the loan, plus an annual premium collected monthly that on most modern FHA loans lasts the life of the loan.
FHA loan limits are set county by county by HUD and change annually. Look yours up at the HUD FHA mortgage limits tool rather than trusting any figure you read online, including on this page.
Two coastal cautions. First, FHA condominium projects also require approval, and the approved list here is short. Second, the appraiser holds the property to minimum standards — on an older beach cottage with an aged roof, soft decking, or salt-damaged railings, that becomes a repair list before closing rather than a negotiation after it.
Further inland
USDA Rural Development loans
USDA does not apply at the beaches, but it very much applies once you move inland — parts of Clay, Putnam, Baker and western Nassau sit inside eligible areas, and a lot of my buyers end up looking there when the coastal numbers do not work.
- No down payment for qualifying buyers.
- Two separate tests: the property must be inside an eligible area, and household income must be under the county limit for your household size.
- Upfront and annual guarantee fees apply in place of conventional mortgage insurance.
- Owner-occupied primary residences only. Not for second homes, not for investment.
Check the address on the USDA property eligibility map before you get attached. Boundaries are redrawn periodically.
What is actually different here
Four things that change the loan on a coastal property
Flood insurance is a loan condition
If the property is in a Special Flood Hazard Area and you have a federally backed mortgage, flood insurance is required, not optional. It goes into your debt-to-income ratio, so it changes what you qualify for. Get an elevation certificate and a real quote during the inspection period, not after.
Condos have a second underwriting
The building gets underwritten as well as you. Owner-occupancy ratio, reserves, litigation, the master insurance policy, and any special assessment can all sink a loan on a unit you would qualify for easily as a house.
Docks, seawalls and boat lifts
Appraisers vary enormously in how they treat marine improvements, and some lenders will not lend value against a dock at all. Riparian rights, submerged land leases and permit status can all become underwriting conditions.
Wind and roof age drive insurance
On the coast the insurance premium can be the deciding number in the whole deal. A roof near the end of its life is a financing problem, not just a maintenance one, because the loan needs an insurable house.
More on how the inspection interacts with all of this on my coastal home inspection guide.
Assistance
Florida Hometown Heroes and down payment assistance
Florida Housing Finance Corporation's Hometown Heroes program is a second mortgage covering down payment and closing costs for full-time employed Floridians buying a primary residence. It sits on top of a first mortgage — it is not a loan program on its own.
As published by the program administrator, eHousingPlus, in August 2026: 5% of the first mortgage amount up to $35,000, a minimum 640 credit score, and it can be layered on FHA, VA, USDA-RD or conventional HFA products. Funding is limited and rounds close. Confirm current terms with a participating lender and see floridahousing.org.
There is a fuller treatment of the program on my existing Hometown Heroes guide.
Side by side
The short comparison
| Program | Typical minimum down | Second homes? | Condo complication |
|---|---|---|---|
| Conventional | 3–5% | Yes, with a larger down payment | Project review, warrantable vs non-warrantable |
| Jumbo | Often 10–20% | Yes | Lender-specific, usually the strictest |
| VA | 0% | No, primary only | Building must be on the VA-approved list |
| FHA | 3.5% | No, primary only | Project must be FHA-approved |
| USDA | 0% | No, primary only | Rarely relevant at the coast |
Common questions
Can I buy an oceanfront condo with a VA loan?
Only if the project appears on the VA-approved condominium list. Plenty of coastal buildings are not on it. Check before you write, not after — this has ended more than one deal I have watched.
Does flood insurance affect how much I can borrow?
Yes. It is part of your monthly housing expense, so it counts in your debt-to-income ratio. On a low-elevation property a high flood premium can reduce your purchase power meaningfully.
Is a second home financed like an investment property?
No, they are separate categories with separate rules and pricing. A true second home you occupy part of the year prices better than a pure rental. Be accurate with your lender about which one it is — the occupancy you certify is a legal statement.
Does the dock add to the appraised value?
Sometimes, and less than owners expect. Marine improvements are difficult comparables and some lenders exclude them. If a dock is a large part of what you are paying for, discuss it with the lender before the appraisal is ordered.
Which lender should I use?
Whichever one gives you the best Loan Estimate for your file. Get at least three, in the same week, and compare page two. There is a factual directory of local lenders on my lender page.
Buying on the water, or trying to work out if you can?
I have owned the maintenance bill on a dock. Tell me the property and I will tell you honestly what the financing and the insurance are likely to do to the deal — even if the answer is that now is not the time.
Important notices
This page is general information for buyers on the First Coast. It is not financial, tax, legal, insurance or lending advice, and it is not a commitment to lend. Tim Sherman is a licensed Florida real estate sales associate, not a licensed mortgage loan originator or insurance agent.
Loan programs, limits, fees, credit requirements and eligibility rules change frequently. Figures on this page carry the date they were checked. Confirm all of them with a licensed lender and the official program source.
No lender or program provider is endorsed on this page. Tim Sherman receives no compensation of any kind for directing business to any lender, and you are free to use any lender you choose.
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