Loan Programs

Conventional mortgages are the most popular and common of all home loans. Fixed rate and adjustable-rate loans can be financed for 10 to 30 years. The longer the loan term, the lower the payment. Down payments can be as little as 3%, but 5% to 20% down payments are more common.

Conventional mortgage loans can be used for almost any type of residential property and occupancy (primary residence, secondary residence, or investment property).

Federal Housing Administration loans often allow more credit and qualification flexibility than conventional loans for low- and moderate-income borrowers. Interest rates are typically competitive with conventional loans, but mortgage insurance requirements are higher and can lead to more expense over the life of the loan.

A minimum 3.5% down payment and the possibility of seller contributions toward closing costs can keep total upfront, out-of-pocket expenses relatively low.

Veterans Administration loans are available only to veterans or active-duty members of the U.S. Armed Forces.

Terms can vary based on service history and eligibility. The primary benefits include zero down payment loans, no requirement for monthly mortgage insurance, and greater flexibility in qualification.

The VA can be particular about the condition of the property being financed, so be mindful of this when shopping. Things such as peeling paint, missing handrails, broken steps or any safety related issues will typically require repair prior to purchase, and some sellers are unwilling to accommodate.

USDA mortgages are typically thought of as a rural area loan since they are backed by the U.S. Dept. of Agriculture, yet some smaller suburbs of metropolitan areas qualify too. Fixed rate loans are available to buyers with low to average income for the area. These loans are available with no down payment and reduced mortgage insurance.

 Jumbo mortgage loans are much like conventional financing in loan terms, property and occupancy options. They typically exceed the loan limits set by the major government-sponsored mortgage agencies (Fannie Mae or Freddie Mac) and are not secured through them. Down payment requirements start at 10% but will be higher as the loan amounts get larger. 

Down payment assistance (DPA) programs help home buyers with loans or grants that reduce the amount they need to save for a down payment. Provided you qualify, you could receive an outright grant or a low- or no-interest loan to cover your down payment. Some DPA funds can be used for closing costs, too.