Orlando Mortgage Types: Conventional vs FHA vs VA — Which Wins in 2025? By People’s Industry Investments — Orlando buyer agents & licensed real estate pros(General info, not legal/financial advice.

• Conventional → most competitive with sellers; PMI can drop off; best for 620+ credit (ideally higher), condos, and strong DTI.

• FHA → 3.5% down entry path with flexible credit & DTI; MIP stays for most loans; stricter property condition.

• VA → often $0 down for eligible service members/vets/surviving spouses; no monthly MI (funding fee may apply/waivers exist); condo must be VA-approved; very strong if structured well.

Quick-pick matrix (which wins when)

Scenario	Best bet	Why
You want the strongest offer in multiple bids	Conventional	Perceived as cleaner by sellers; easier condo approvals; flexible property condition
You need lowest down and have mid credit	FHA (3.5% down)	Lower credit/FICO tolerance; forgiving DTI; predictable pricing
You’re eligible veteran and want minimal cash outlay	VA (often 0% down)	No monthly MI; competitive payment even at 0% down
You’re buying a condo	Conventional(often)	FHA requires HUD approval/spot-approval; VA requires VA approval; conventional is typically smoother
Home has minor wear & tear	Conventional	FHA/VA appraisers flag safety/livability issues; fixes can be required pre-close
Plan to keep the loan long-term	Conventional	PMI can cancel at 80% LTV; FHA MIP usually sticks (unless large down payment/term rules)
You expect rates to drop and will refi soon	Any	Focus on lowest cash to close today, then refi later

The big differences (plain-English)

Down payment & mortgage insurance

• Conventional: as low as 3%–5% down (program-dependent). PMI required under 20% down, but cancels when you hit ~80% LTV (or by request with appraisal/seasoning).

• FHA: 3.5% down at typical credit tiers. Upfront MIP is financed; annual MIP added to the payment and usually does not drop off (except certain down-payment/term cases).

• VA: Often 0% down with no monthly mortgage insurance. A funding fee may apply (varies by service history & down payment) and is often financed; waived for many with disability eligibility.

Credit, DTI, and pricing feel

• Conventional: Best pricing as scores rise and DTI stays moderate. Lower scores can push PMI/rate up.

• FHA: More forgiving of lower scores and higher DTI; keeps payment competitive at entry price points.

• VA: Flexible DTI, uses residual income test; very competitive total payment because no monthly MI.

Property condition & appraisal posture

• Conventional: Most flexible on as-is condition (still must be safe, sound, and marketable).

• FHA/VA: Appraisals check health/safety/livability more strictly (peeling paint at older homes, missing handrails, active leaks, exposed wiring, etc.). Expect repairs or credits before clear-to-close.

Condos, docs & approvals

• Conventional: Typically the easiest path for condos; still needs a condo questionnaire & budget/reserves review.

• FHA: Requires HUD-approved project or spot approval with documentation—can be doable if the association cooperates.

• VA: Condo must be VA-approved (you can request project approval, but it adds time).

“Which wins the house?” — Seller-perception (and how to counter it)

Typical strength ranking sellers use: Cash → Conventional → VA → FHA.You can win with any loan by tightening terms:

• Short, specific inspection (5–7 days, access day 1).

• Strong EMD (earnest money) and fully underwritten pre-approval (not just pre-qual).

• Appraisal strategy: gap language (capped), extra down payment, or pre-appraisal data for comps.

• Flexible closing + post-occupancy if seller needs time.

• Condo prep: ask the association for docs before you write the offer.

Example offers (how we make each loan type “play bigger”)

• Conventional: DU/LP Approve/Eligible letter attached, short inspection, small appraisal gap, 30-day close.

• FHA: 3.5% down with seller credit earmarked for a rate buydown, 7-day inspection, contractor on standby for small safety fixes.

• VA: Full pre-underwrite + residual income documented, no monthly MI call-out in the cover letter (lower payment = stronger file), willingness to close fast if condo is already VA-approved.

Orlando-specific wrinkles to plan for

• Insurance: Roof age & 4-point/wind-mit inspections affect coverage & price; bind early to avoid lender delays—especially during named storms.

• Condo/HOA timelines: Estoppels and document packages take time; schedule closing after any statutory condo-doc review period in your contract.

• CDD lines (newer communities): Budget them in your monthly comfort number.

• Property taxes: Paid in arrears here—escrows change seasonally; ask your lender for a realistic monthly estimate.

Q&A (crisp answers)

Q: Which is “best”: Conventional, FHA, or VA?A: It depends. Conventional wins multiple-offer optics, FHA wins entry affordability with lower scores/DTI, and VAwins total payment for eligible buyers thanks to no monthly MI.

Q: Can FHA/VA beat conventional in a bidding war?A: Yes—use short inspections, fully underwritten approvals, clean timelines, and, if needed, appraisal gap language or extra down to calm seller concerns.

Q: Do FHA/VA appraisals stick with the property?A: Often yes for a period (commonly around 120 days). If you switch buyers quickly, the prior appraisal can follow—ask your lender about current rules.

Q: When does PMI go away on conventional?A: It cancels around 80% LTV (by schedule) and can be removed earlier with an appraisal & seasoning if your equity jumps.

Q: Does FHA mortgage insurance ever drop off?A: Usually no for typical down payments/terms (you’d refi to remove). Certain high-down/short-term cases may differ—ask your lender.

Your action plan (simple)

1. Payment-first budget: Tell us your monthly comfort; we’ll reverse-engineer price & program.

2. Get a real pre-approval: We’ll connect you to lenders for fully underwritten letters (the strong kind).

3. Pick loan + offer strategy: We’ll tailor terms that win your house: Conventional, FHA, or VA.

4. Pre-flight the address: We check insurance, title, and HOA/condo factors before you submit.

People’s Industry Investments (Orlando, FL)Buyer agency • New-build representation • Sell-to-buy cash options