Home Loan Programs 101

Conventional mortgages are the most common of all home loans. Fixed and adjustable-rate loans can be financed for 10 to 30 years, with lower payments for longer terms. Down payments can be as little as 3% or 5%.

Federal Housing Administration (FHA) loans often allow more credit and qualification flexibility for low- and moderate-income borrowers. Interest rates are competitive with conventional loans, but mortgage insurance requirements can lead to more expenses over the life of the loan. A minimum 3.5% down payment and possible seller contributions toward fees can keep total upfront expenses relatively low.

U.S. Dept. of Agriculture (USDA) mortgages are generally thought of as rural area loans, yet some smaller suburbs of metropolitan areas qualify too. Fixed-rate loans are available for low- to average-income buyers, typically with no down payment and reduced mortgage insurance.

Veterans Administration (VA) loans are available to veterans or active-duty members of the U.S. Armed Forces. The primary benefits include zero down payment loans, no monthly mortgage insurance, and flexibility in qualification. Terms vary based on service history and eligibility.

Jumbo mortgage loans are much like conventional financing, except they can exceed those loan limits. Down payment requirements start at 5% but will be higher for larger loans.