Types of mortgage loans, and which one fits you
Five programs cover almost every buyer in the country. They differ on credit score, down payment and mortgage insurance, and the gaps between them are wider than most people expect.
No credit check · No documents · About 90 seconds
Your letter names the programs you are likely to use. How the letter works →
Five programmes
Compared on what decides your file
A loan program is the set of rules a mortgage is written under. It decides the minimum credit score, the smallest down payment allowed, whether you pay mortgage insurance, and how long that insurance lasts.
Pick the wrong one and you can end up paying insurance for thirty years that a different program would have let you cancel in six. The program is named on your pre-approval letter, so it's worth settling early.
Narrow it down
Which program are you likely to use?
Four questions. Nothing is stored, and this doesn't touch your credit.
Program matcher
A starting point, not an approval
Have you served in the US military?
Roughly where is the property?
Where does your credit score sit?
How much can you put down?
Solid credit and a modest down payment usually points here first.
Also worth asking about: FHA
See what I qualify forA loan officer confirms the program. This is guidance, not a decision.
Side by side
The five programs compared
| Program | Minimum score | Down payment | Mortgage insurance | Who can use it |
|---|---|---|---|---|
| Conventional | Around 620 | From 3% | PMI below 20% down, cancellable | Anyone who qualifies |
| FHA | 580, or 500 with 10% down | 3.5% | MIP, often for the life of the loan | Anyone who qualifies |
| VA | No VA minimum; lenders often 580–620 | 0% | None monthly. One-time funding fee | Veterans, service members, some spouses |
| USDA | Commonly 640 | 0% | Upfront and annual guarantee fee | Eligible areas, with income limits |
| Jumbo | Typically 700+ | Often 10–20% | Varies by lender | Loans above the conforming limit |
Scroll sideways to see all columns.
These are program floors. Individual lenders add their own requirements on top, called overlays, so a lender may want 640 on a loan the program allows at 580.
In detail
What each program is actually for
Conventional loans are the most common path for buyers with solid credit.
Conventional →FHA opens the door with more flexible credit and down payment options.
FHA →VA offers competitive terms with no monthly mortgage insurance.
VA →USDA makes home ownership possible in eligible rural areas.
USDA →Jumbo loans are for higher-priced homes above conforming loan limits.
Jumbo →The default option
Not backed by a government agency. Sold to Fannie Mae or Freddie Mac, which is why the rules are consistent between lenders.
- Credit score
- Around 620
- Down payment
- From 3%
- Insurance
- PMI, cancellable
Best if your credit is decent and you'd rather stop paying mortgage insurance once you hit 20% equity.
The lower bar
Insured by the Federal Housing Administration. Built for buyers whose credit history has some damage in it.
- Credit score
- 580, or 500 at 10% down
- Down payment
- 3.5%
- Insurance
- MIP, usually permanent
Best if your score rules out conventional today. Many buyers refinance out of FHA later to shed the insurance.
The strongest terms available
Guaranteed by the Department of Veterans Affairs. If you're eligible, it usually beats everything else on this page.
- Credit score
- No VA minimum
- Down payment
- 0%
- Insurance
- None monthly
Best if you've served. No down payment and no monthly mortgage insurance is a combination nothing else offers.
Zero down, outside the city
Backed by the Department of Agriculture. The eligible map is broader than most people assume and includes plenty of commuter towns.
- Credit score
- Commonly 640
- Down payment
- 0%
- Insurance
- Guarantee fee
Best if the address qualifies and your household income sits under the local cap. Worth checking the map before ruling it out.
Above the limit
Any loan larger than the conforming limit, which the FHFA resets each year and which varies by county.
- Credit score
- Typically 700+
- Down payment
- Often 10–20%
- Insurance
- Varies
Best if the price puts you over the local limit. Expect tighter scrutiny and a reserves requirement on top.
Your letter names the program
Get pre-approved and you'll see which one you land on, along with the amount.
Get pre-approvedThe part people miss
Mortgage insurance, and when it goes away
This is the single biggest cost difference between programs, and it's the one buyers notice last.
Cancellable on request at roughly 20% equity, automatic at 22%.
With less than 10% down it runs the life of the loan. Refinancing is the usual exit.
A one-time funding fee at closing, and nothing after that.
Shaded bars show the years you're paying mortgage insurance. Timing depends on your down payment, your rate and how fast prices move.
Conventional: PMI, and you can get rid of it
Private mortgage insurance applies below 20% down. Once you reach roughly 20% equity you can request cancellation, and it drops automatically at 22%. On a long hold, that's tens of thousands of dollars.
FHA: MIP, and usually you can't
There's an upfront premium plus an annual one. With less than 10% down it stays for the life of the loan. The standard escape route is refinancing into a conventional loan once your equity and credit allow it.
VA: no monthly insurance at all
A one-time funding fee instead, which can be rolled into the loan. Borrowers receiving VA disability compensation are generally exempt from it.
USDA: a guarantee fee, upfront and annual
Lower than FHA's annual premium in most cases, but it does run for the life of the loan.
Fixed rate or adjustable
A fixed rate holds for the whole term, so the principal and interest never move. An adjustable rate holds an intro rate for a set period, commonly five, seven or ten years, then adjusts on a schedule within caps.
- Fixed suits anyone planning to stay put, or anyone who'd lose sleep over a moving payment
- An ARM can work if you're confident you'll sell or refinance before the first adjustment
- Caps limit each adjustment and the lifetime rise, but they don't remove the risk
15 years or 30
The term sets how long you're paying and how much interest you hand over in total.
- 30 years: lower payment, considerably more interest across the life of the loan
- 15 years: higher payment, usually a slightly better rate, far less interest
- A 15-year payment raises your debt-to-income ratio, which can lower the amount you qualify for
Reading this
A fixed rate is the flat line: the same rate for the whole term, so the principal and interest never move.
An adjustable rate starts lower, holds that intro rate for a set period, then steps up on a schedule once the intro ends. Caps limit each step and the lifetime rise, but they do not remove it.
Questions
Common questions about loan programs
What's the difference between conventional and FHA?
Conventional isn't government-backed and usually wants around 620, with PMI below 20% down that you can cancel later. FHA is insured by the Federal Housing Administration, allows 580 with 3.5% down, and carries mortgage insurance that often lasts the life of the loan. Lower bar to entry, higher long-run cost.
Which program has the lowest down payment?
VA and USDA both allow zero down for eligible borrowers. If neither applies to you, some conventional programs start at 3% and FHA needs 3.5%.
What counts as a jumbo loan?
Anything above the conforming limit, which the FHFA sets each year and adjusts by county. Because these loans can't be sold to Fannie Mae or Freddie Mac, lenders carry the risk themselves and set their own standards, usually around 700 credit, a larger down payment and cash reserves.
Can I switch programs after getting pre-approved?
Usually yes, before closing. Your letter names a program, so switching means it gets reissued because the qualifying maths differs. Tell your loan officer early, since a change can move both your maximum and your monthly payment. How pre-approval works.
Is USDA only for farms?
No. The eligibility map covers a lot of small towns and outer suburbs that nobody would call rural. Household income limits apply and vary by area. It's worth checking the address before dismissing it.
Does the program affect my chances with a seller?
Sometimes. On a property needing repair, sellers occasionally prefer conventional because FHA and VA appraisals apply condition standards. On a normal listing in good shape, the strength of your letter matters far more than the program on it.
Keep reading
Related guides
Mortgage pre-approval
What's inside the letter and why listing agents call to check it.
Credit score requirements
Program floors, lender overlays and what recent history does to both.
Debt-to-income explained
How the ratio is calculated and why it caps your loan amount.
Down payment and reserves
Sourcing funds, gift letters and what lenders want left over.
Self-employed borrowers
How net income after deductions changes what you qualify for.
All mortgage guides
Timelines, credit inquiries, offer-day tactics and the terminology.
Independent sources
- Consumer Financial Protection Bureau — comparing mortgage types before you apply
Find out which program you land on
Your pre-approval letter names it, along with your amount.
Get pre-approved