Home loan programs: compare your options
Every loan trades something: payment, total interest, credit rules or upfront cost. Here is what each one is built for, in plain words.
The main loan types
Conventional
Not backed by the government. Good credit gets the best pricing. Private mortgage insurance can be removed once you reach enough equity.
FHA
Insured by the Federal Housing Administration. More flexible credit rules and lower upfront cash, with mortgage insurance on the loan.
VA
For eligible veterans, service members and some surviving spouses. No private mortgage insurance.
USDA
For eligible homes in qualifying rural and suburban areas, with income limits.
Jumbo
For loans above the conforming loan limit in your county. Usually needs stronger credit and more savings.
Refinance
Replace the loan you have to lower your payment, shorten your term or take cash out. See how →
Fixed, adjustable, 15 or 30 years
The loan type sets the rules. The term and rate type set your payment.
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30-year fixed. The lowest fixed payment. You pay more interest over the life of the loan.
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15-year fixed. A higher payment, but you usually get a lower rate and pay far less interest.
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Adjustable (ARM). A lower starting rate for a set number of years, then it can go up or down.
Which loan fits you?
- Strong credit and some savings: start with conventional.
- Credit still building: ask about FHA.
- Served in the military: check your VA eligibility first.
- Buying outside the city: ask if the home qualifies for USDA.
- Higher-priced home: you may need a jumbo loan.
Loan program questions
What is the difference between FHA and conventional loans?
FHA loans are insured by the government and have more flexible credit rules, with mortgage insurance on the loan. Conventional loans are not government-backed, reward stronger credit, and private mortgage insurance can be removed once you have enough equity.
What is a conforming loan limit?
It is the largest loan Fannie Mae and Freddie Mac will buy, set each year by county. Loans above it are called jumbo loans.
What is mortgage insurance?
Insurance that protects the lender if a borrower stops paying. It is common when you put less money down, and it adds to your monthly payment.
Can I change loans later?
Yes. You can refinance into a different loan later, for example to drop mortgage insurance or change your term, if you qualify.
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