4 Most Common Types of Home Loans

1. CONVENTIONAL LOANS
A conventional loan is a mortgage that is not guaranteed or insured by any government agency, including the Federal Housing Administration (FHA), Farmers Home Administration (aka, USDA) and Department of Veterans Affairs (VA).

• 3 or 5% minimum down payment
• Good Credit
• No upfront fee
• No private mortgage insurance (PMI) with 20% down
• PMI removed at 78% LTV (primary home)

2. FHA LOANS
An FHA loan is a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low-to-moderate income borrowers who are unable to make a large down payment.

• 3.5% minimum down payment
• Easier to Qualify, more flexible for lower credit scores
• Monthly mortgage insurance
• Max loan amount around $308,500 (varies slightly by State/County)
• Upfront fee to FHA is 1.75% of loan, rolled into loan

3. VA LOANS
A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs. The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry).

• 0% down payment
• Must meet VA enlistment qualifications for program
• Max loan amount around $417,000 (varies slightly by State/County)
• Upfront fee to VA is 0.00% of loan, rolled into loan (VA waives for certain military status/disability ratings)
• No monthly mortgage insurance

4. USDA LOANS
A USDA loan, also known as the USDA Rural Development Guaranteed Housing Loan Program, is a mortgage loan offered to rural property owners by the United States Department of Agriculture.

• 0% down payment
• Property must be located in qualified area
• Maximum household income limit is based on number of occupants (varies by State/County)
• Upfront fee to USDA is 1.0% of loan, rolled into loan
• Minimal monthly mortgage insurance

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