There are five main programmes. Which one fits depends on your down payment, your credit, where you are buying and how long you plan to stay. Start with your situation rather than the product names.
Narrow it down
Conventional
The default for buyers with solid credit.
Down payment from
3%
Credit score
620+
Mortgage insurance
Until 80% LTV
Private-sector loans that are not government guaranteed but conform to Fannie Mae and Freddie Mac guidelines. The most common loan in the country, and usually the cheapest if your credit is strong.
Pros, cons and who it suits
Advantages
No mortgage insurance at all once you reach 20% equity, unlike FHA
Down payments from 3% for qualifying first-time buyers
Flexible terms and the widest range of lenders competing for the loan
Lower total borrowing cost than government programmes for strong credit
Trade-offs
Higher credit and down payment bar than government-backed options
More stringent income and asset documentation
Mortgage insurance is priced on your credit score, so weaker credit costs more
Best suited for: Borrowers with strong credit, steady employment, and enough saved to put down at least 5%.
Loan amounts above the annual conforming limit become jumbo loans. That limit changes every January.
FHA
The most forgiving on credit.
Down payment from
3.5%
Credit score
580+
Mortgage insurance
Usually for the life of the loan
Insured by the Federal Housing Administration and designed to get lower-income and lower-credit buyers into homes. The government insurance is what lets lenders say yes at credit scores conventional would decline.
Pros, cons and who it suits
Advantages
3.5% down with a credit score of 580, and 10% down as low as 500
Far easier to qualify for than conventional
More tolerant of past credit problems and higher debt-to-income
Assumable, which can be valuable when you sell in a higher-rate market
Trade-offs
Upfront mortgage insurance premium, plus an annual premium
On most FHA loans the annual premium lasts the whole loan term
County-by-county loan limits, often lower than conventional
The property itself must meet FHA condition standards
Best suited for: First-time buyers, and anyone whose credit is still recovering.
Many FHA borrowers refinance to conventional once credit and equity improve, specifically to shed the insurance.
VA
The best terms available, if you qualify.
Down payment from
0%
Credit score
Typically 620+
Mortgage insurance
None, ever
Backed by the Department of Veterans Affairs for eligible service members, veterans and some surviving spouses. On almost every measure this is the strongest loan programme in the market.
Pros, cons and who it suits
Advantages
No down payment required on most purchases
No monthly mortgage insurance at any loan-to-value
Competitive rates, typically at or below conventional
More lenient credit and debt-to-income treatment
Reusable: the entitlement can be restored and used again
Trade-offs
A one-time funding fee, though it is waived for veterans with a service-connected disability
Only available to eligible service members and their families
The property must meet VA condition requirements
Best suited for: Any eligible service member or veteran. If you qualify, this is almost always the loan to compare everything else against.
Eligibility is established with a Certificate of Eligibility, which we can pull for you.
USDA
Zero down, if the address qualifies.
Down payment from
0%
Credit score
Typically 640+
Mortgage insurance
Guarantee fee, below FHA
Guaranteed by the Department of Agriculture to support buyers in rural and many suburban areas. The eligibility map is far broader than most people expect, and plenty of commuter towns qualify.
Pros, cons and who it suits
Advantages
No down payment required
Below-market interest rates
Mortgage insurance costs less than FHA
Trade-offs
The property must sit inside an eligible area
Household income caps apply, based on county and family size
Primary residences only
Best suited for: Buyers purchasing outside dense urban areas who meet the income limits.
Worth checking the map before ruling it out. Eligible areas and income caps are revised periodically.
Jumbo
For loans above the conforming limit.
Down payment from
10%
Credit score
700+
Mortgage insurance
Often none, priced into the rate
Any loan larger than the annual conforming limit for the county. Because these cannot be sold to Fannie or Freddie, the lender holds more risk and underwrites accordingly.
Pros, cons and who it suits
Advantages
Finances higher-priced property in a single loan
Competitive rates for strong borrowers
Often avoids mortgage insurance entirely
Trade-offs
Larger down payments and cash reserve requirements
Stricter credit and appraisal standards, sometimes two appraisals
Fewer lenders, so shopping matters more
Best suited for: Buyers of higher-value homes with strong income, credit and reserves.
Whether a loan is jumbo depends on the county limit, so the same loan amount can be conforming in one market and jumbo in another.
Nothing matches that combination on its own — but it does not mean you have no options.
That is exactly the conversation worth having.
Side by side
Comparison of loan programmes by down payment, credit score and mortgage insurance
Programme
Conventional
FHA
VA
USDA
Jumbo
Down payment from
3%
3.5%
0%
0%
10%
Credit score
620+
580+
Typically 620+
Typically 640+
700+
Mortgage insurance
Until 80% LTV
Usually for the life of the loan
None, ever
Guarantee fee, below FHA
Often none, priced into the rate
Who it suits
The default for buyers with solid credit.
The most forgiving on credit.
The best terms available, if you qualify.
Zero down, if the address qualifies.
For loans above the conforming limit.
Typical industry guidelines, not underwriting standards. Down payment, credit and insurance
requirements vary by lender, property and borrower. Conforming and county loan limits change
annually. Every figure here is worth confirming against your own file.
Fixed or adjustable?
This is a second, independent choice. You pick a programme, then you pick how the rate behaves. Most loans above are available either way.
Fixed rate
The rate never changes. Your principal and interest payment on day one is the same
in year twenty. Costs slightly more at the start than an adjustable, and you refinance
if rates fall.
Suits anyone planning to stay put, and anyone
who would rather not think about it again.
Adjustable rate
A lower fixed rate for an opening period — commonly five, seven or ten years —
then it adjusts on a schedule within defined caps. Cheaper up front, uncertain later.
Suits buyers who expect to move or refinance
before the fixed period ends, and who could absorb the payment if they did not.
Over 62 and thinking about equity?
A reverse mortgage converts equity into income without a monthly mortgage payment. It suits a narrow set of circumstances well and most others poorly, so it has a page of its own.
That is the normal state of affairs, and it is a fifteen minute conversation rather than a research project. One credit pull tells us which programmes you actually qualify for and what each would cost.
