Types of home loans: Finding the mortgage option that fits your goals

Flexible terms and features. A conventional mortgage can mean more options for how your loan is set up, including how long you’ll pay it off and how your interest rate works.

Potential for lower long-term costs. With good credit and a solid down payment, it may be possible to get a lower interest rate.

Option to remove mortgage insurance. Private mortgage insurance can be removed after you’ve paid down a portion of your loan with monthly payments over time or a large initial down payment.

Works for many home types. These loans can finance new construction homes and modern manufactured homes that meet a lender’s condition and home requirements.

Higher credit requirements. Conventional loans often call for stronger credit scores than government-backed programs.

PMI when putting down less than 20%. A down payment below 20% typically comes with a monthly mortgage insurance charge.

Down payment expectations vary. Some lenders may require more than the minimum down payment based on your credit, debt, or finances.

Some home types may not meet conventional loan standards. Depending on the home you want, some restrictions on loan types could apply.

Potential for lower down payments. Buyers with credit scores of 580 and up may be able to put down as little as 3.5%.

More flexible credit guidelines. Some FHA lenders may accept credit scores as low as 500, subject to higher down payments and additional requirements, which helps qualified buyers who may be establishing or rebuilding credit.

Consistent standards. Clear program rules make it easier to compare lenders.

Works for some modern manufactured homes. FHA loans for manufactured homes are possible for properties meeting HUD and foundation standards.

Mortgage insurance is required. FHA loans require both upfront and monthly mortgage insurance premiums, which add to your total costs over time.

Lower loan limits in some areas. FHA sets a maximum amount you can borrow in each county, which may be lower than conventional loan limits.

No down payment for most qualifying buyers. Many VA loans allow 100% financing, reducing upfront home buying costs.

No PMI. VA loans do not require private mortgage insurance, helping keep monthly payments lower and reduce total loan costs.

Competitive rates. Interest rates are often lower than those for other kinds of home loans, supporting long-term affordability.

VA funding fee. Most borrowers pay a funding fee, which helps support the program but adds to the total loan costs.

Property standards apply. Homes must meet VA appraisal and condition requirements, which may rule out certain properties.

Eligibility is limited. Only buyers with qualifying military service or status can use the benefit.

No down payment for most eligible buyers. USDA loans often allow 100% financing, helping to lower upfront costs.

Lower long-term costs. Competitive interest rates can help keep your payments manageable over time.

Consistent program rules. With consistent program rules, it’s simpler for you to compare lenders and understand your options.

More options in rural areas. USDA loans can help you consider homes in rural and some suburban areas you may not have thought were within reach.

Homes must fall within eligible areas. Because USDA loans are location-specific, you’ll need to check whether a home you want is in a qualifying area.

Income requirements. The USDA house loans program sets income limits for each county, which may affect whether you qualify.

Upfront and monthly fees. Guarantee fees add to the cost of your loan over time.

More limited home types. Properties must meet USDA condition and appraisal standards, and some home types may not qualify.

Flexible approval guidelines. Lenders set their own rules and can consider a wider range of financial situations.

More financing paths. Portfolio loans can support home-only purchases or combined home-and-land financing, depending on eligibility.

Tailored loan terms. Rates and terms can be adjusted based on your overall financial picture.

One lender throughout. The same lender services the loan from start to finish, making communication and support more straightforward.

Rates may be higher. Lender-specific guidelines can lead to higher interest rates.

Less uniform requirements. Terms, eligibility, and pricing differ widely, making comparison shopping more important.

Down payment needs may change. Some lenders may require a larger down payment depending on credit, loan amount, or property type.

Not tied to government protections. Not government-insured and may not follow the same standardized guidelines.