Types of Mortgages: How Conventional, FHA, VA, USDA and Jumbo Loans Compare

The main types of mortgages are conventional loans, government-backed FHA, VA and USDA loans, and jumbo loans for amounts above conforming limits. They differ mainly in minimum credit score, down payment, mortgage insurance and who is eligible. Separately, any of them can come with a fixed or adjustable interest rate and different term lengths.

Below is how each loan type works, who it fits, and the tradeoffs to weigh before you apply.

Mortgage types at a glance

Requirements vary by lender, and lenders can set stricter standards (called overlays) than the program minimums.

Conventional loans

A conventional mortgage is any home loan not insured or guaranteed by a federal agency. Most are conforming loans, meaning they meet Fannie Mae and Freddie Mac guidelines and fall under the conforming loan limit set each year by the Federal Housing Finance Agency. For 2026 the baseline limit for a one-unit home is $832,750, with higher limits in designated high-cost areas.

What to know:

• Credit scores around 620 are a common minimum, and better scores earn better pricing.
• Down payments can be as low as 3% through certain programs for eligible buyers.
• If you put down less than 20%, you will usually pay private mortgage insurance, which can be removed once you reach enough equity.
• Conventional loans can be used for primary homes, second homes and investment properties.

For borrowers with good credit, conventional loans are often the lowest-cost option over time, largely because PMI goes away.

Government-backed loans: FHA, VA and USDA

Three federal programs insure or guarantee mortgages so lenders can accept smaller down payments or lower credit scores. Each has its own eligibility rules and fees.

FHA loans

FHA loans are insured by the Federal Housing Administration, which lets lenders accept borrowers with lower credit scores or higher debt loads. Program guidelines allow a score as low as 580 with 3.5% down, or 500 to 579 with 10% down, though many lenders set higher minimums.

The main cost is FHA mortgage insurance premium (MIP). You pay an upfront premium, usually financed into the loan, plus an annual premium split into your monthly payments. With less than 10% down, annual MIP generally lasts for the life of the loan; with 10% or more down, it typically ends after 11 years. That is why many FHA borrowers later refinance into a conventional loan.

FHA loans also have their own loan limits, which vary by county, and the home must meet minimum property standards.

VA loans

VA loans are guaranteed by the Department of Veterans Affairs and available to eligible active-duty service members, veterans, certain National Guard and Reserve members, and some surviving spouses. You will need a Certificate of Eligibility.

Key features:

• No down payment is often required.
• No monthly mortgage insurance.
• A one-time VA funding fee usually applies, which can be financed; it varies with down payment and prior use, and some borrowers, such as many receiving VA disability compensation, are exempt.
• The home must be your primary residence.

For eligible borrowers, a VA loan is frequently the most affordable path to ownership.

USDA loans

USDA guaranteed loans help low- and moderate-income buyers purchase homes in eligible rural and some suburban areas. Many locations outside major cities qualify, so it is worth checking the USDA eligibility map even if you do not consider your area rural.

USDA loans often require no down payment. Instead of PMI, borrowers pay an upfront guarantee fee and an annual fee. Household income must fall under the program's limit for your area, and the home must be your primary residence.

Jumbo loans

A jumbo loan is a conventional mortgage larger than the conforming loan limit for your county. Because Fannie Mae and Freddie Mac will not buy them, lenders set their own standards, which usually means:

• Higher credit score minimums, often 700 or above
• Larger down payments, commonly 10% to 20% or more
• Lower maximum debt-to-income ratios
• Significant cash reserves, sometimes many months of payments

Jumbo rates are not always higher than conforming rates, so compare offers.

Fixed-rate vs adjustable-rate loans

Loan type and rate structure are separate choices. A conventional, FHA, VA or jumbo loan can each come with a fixed rate or an adjustable rate (USDA guaranteed loans are fixed-rate). Fixed-rate loans keep the same principal-and-interest payment for the life of the loan, while adjustable-rate mortgages start with an introductory rate that later resets. Our guide to fixed vs adjustable rate mortgages covers ARMs and 15- versus 30-year terms.

How to choose the right type of mortgage

Work through these questions:

1. Are you eligible for VA or USDA? If so, compare them first; no down payment and no monthly PMI are hard to beat.
2. What is your credit score? Below the mid-600s, FHA may be your most realistic option. Higher scores usually favor conventional.
3. How much can you put down? More down lowers your loan balance and mortgage insurance costs.
4. How much does the home cost? If your loan will exceed the conforming limit, you are in jumbo territory.
5. How long will you stay? This affects whether paying for lower mortgage insurance or points makes sense.

If you already have a government-backed loan, a streamline refinance for FHA or VA loans can sometimes lower your rate with less paperwork.

The bottom line

Conventional loans reward good credit and let you drop PMI; FHA loans open the door for lower scores at the cost of longer-lasting mortgage insurance; VA and USDA loans can eliminate the down payment for those who qualify; and jumbo loans cover higher-priced homes with tougher standards. Compare at least two loan types with several lenders before committing.