# Types of mortgage loans, compared

> Compare mortgage loan types: conventional, FHA, VA, USDA and jumbo loans, fixed vs adjustable rates, and specialty loans, with 2026 limits and costs.

URL: https://mortgage-math-us.com/loan-types/  
Last reviewed: 2026-10-28 · By the MortgageMath US Editorial team

## Quick answer

The main mortgage types are **conventional** loans (from 3% down, private mortgage insurance below 20% down), **FHA** loans (3.5% down with a 580+ credit score, mortgage insurance usually for the life of the loan), **VA** loans (0% down for eligible veterans and service members, a one-time funding fee and no monthly insurance) and **USDA** loans (0% down in eligible rural areas for moderate incomes). Loans above the $832,750 conforming limit are **jumbo** loans.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Lowest conventional down payment | 3% | [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) | Oct 28, 2026 |
| Lowest FHA down payment (580+ score) | 3.5% | [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) | Oct 28, 2026 |
| VA down payment (eligible borrowers) | 0% | [U.S. Department of Veterans Affairs](https://www.va.gov/housing-assistance/home-loans/loan-types/purchase-loan/) | Jan 7, 2026 |
| USDA income limit (share of area median) | 115% | [USDA Rural Development](https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program) | Oct 28, 2026 |
| 2026 conforming limit, most counties | $832,750 | [FHFA](https://www.fhfa.gov/news/news-release/fhfa-announces-conforming-loan-limit-values-for-2026) | 2026 limit |
| 2026 conforming limit, high-cost areas | $1,249,125 | [FHFA](https://www.fhfa.gov/news/news-release/fhfa-announces-conforming-loan-limit-values-for-2026) | 2026 limit |

## The four main loan programs

Every mortgage has two layers: the **program** that sets the rules — who backs the loan, how much you must put down, what insurance you pay — and the **product**, such as a 30-year fixed rate or a 5/6 adjustable rate. Start with the program, because it decides how much cash you need.

*Main mortgage programs at a glance (2026 rules)*

| | Conventional | FHA | VA | USDA |
|---|---|---|---|---|
| Who backs it | Nobody; most follow Fannie Mae and Freddie Mac rules | Federal Housing Administration (HUD) | Department of Veterans Affairs | USDA Rural Development |
| Who can use it | Anyone who qualifies | Anyone buying a principal residence | Eligible veterans, service members and some surviving spouses | Moderate incomes, up to 115% of area median, in eligible rural areas |
| Minimum down payment | 3% | 3.5% (580+ score) | 0% | 0% |
| Credit score floor | 620 on manual underwriting; set by the automated system otherwise | 500 | No VA minimum; lenders set one | No USDA minimum; lenders set one |
| Mortgage insurance | PMI below 20% down; cancellable | Upfront 1.75% plus annual MIP | None; one-time funding fee instead | Upfront 1% plus 0.35% a year |
| One-unit loan limit | $832,750 ($1,249,125 in high-cost areas) | $541,287 to $1,249,125 by county | No VA limit with full entitlement | Set by income and repayment ability |

Lenders can set stricter rules than the program — called overlays — so it pays to ask more than one. Each program has its own guide: [conventional loans](https://mortgage-math-us.com/loan-types/conventional-loans/), [FHA loans](https://mortgage-math-us.com/loan-types/fha-loans/), [VA loans](https://mortgage-math-us.com/loan-types/va-loans/) and [USDA loans](https://mortgage-math-us.com/loan-types/usda-loans/).

## Government-backed vs conventional

FHA, VA and USDA loans are made by private lenders but insured or guaranteed by a federal agency. If the borrower defaults, the agency covers part of the lender’s loss, which is why these programs accept small or zero down payments and more flexible credit. You pay for that protection: FHA through mortgage insurance premiums, VA through a funding fee, USDA through guarantee fees.

Conventional loans have no government backing. Most are “conforming” — they follow the rules of Fannie Mae and Freddie Mac, which buy them from lenders — and stay within the conforming loan limit. Below 20% down, a private mortgage insurer protects the lender instead. That insurance is priced on your credit score and, unlike most FHA insurance, it ends: you can ask to cancel it at 80% of the home’s original value, and it stops automatically at 78%.

## What each loan costs on the same home

> **Worked example: $360,000 home (near the US median value), smallest down payment on each program, 30-year fixed at an example rate of 7.24%**
>
> | Program | Down payment | Principal and interest | Insurance or fee | Monthly total |
> |---|---:|---:|---:|---:|
> | Conventional | $10,800 | $2,380 | $175 | $2,968 |
> | FHA | $12,600 | $2,409 | $159 | $2,982 |
> | VA (first use) | $0 | $2,506 | $0 | $2,920 |
> | USDA | $0 | $2,478 | $106 | $2,998 |
> 
> Loan amounts, with financed fees: conventional $349,200, FHA $353,480, VA $367,740 and USDA $363,600. The monthly total adds property tax (0.89% a year) and insurance at national averages. Every row uses Freddie Mac’s weekly conventional average so the programs are compared on the same rate; actual FHA, VA and USDA quotes are often different. Conventional PMI is the midpoint of Freddie Mac’s typical range and FHA’s annual MIP is 0.55%; FHA’s upfront premium, the VA funding fee of 2.15% (first use, under 5% down) and USDA’s 1% guarantee fee are added to the loan.

The table hides two differences that matter over time. FHA’s mortgage insurance usually lasts for the life of the loan, while conventional PMI ends; and VA borrowers who receive VA disability compensation are exempt from the funding fee. Compare the cost over the years you expect to keep the loan, not just the first payment.

## Which loan fits your situation?

| If you… | Look first at | Why |
|---|---|---|
| Have a credit score in the 700s and 5–20% down | Conventional | PMI is cheaper with strong credit and can be cancelled |
| Have a score in the 500s or low 600s, or higher debts | FHA | Lower score floor and flexible debt ratios |
| Are an eligible veteran or service member | VA | No down payment, no monthly mortgage insurance |
| Are buying in a rural or small-town area with a moderate income | USDA | No down payment and low annual fee |
| Need to borrow more than your county’s conforming limit | Jumbo | Conforming and FHA loans can’t go that high |
| Own your home outright or nearly so and are 62 years or older | Reverse mortgage (HECM) | Turns equity into income without monthly payments |

Many buyers qualify for more than one. Ask lenders for a Loan Estimate on two programs on the same day, then compare the payment, the cash to close and how long the mortgage insurance lasts. The [affordability calculator](https://mortgage-math-us.com/tools/affordability-calculator/) shows what price each debt-to-income limit supports.

## Fixed rate or adjustable rate?

Any of the programs above can come as a fixed-rate loan, which keeps the same rate and principal-and-interest payment for the whole term, and most can come as an adjustable-rate mortgage (ARM). An ARM starts with a fixed rate for a set period, then resets to an index plus a margin. Fannie Mae’s ARMs use 30-day average SOFR, and caps limit each change: on a standard 5/6 ARM the caps are 2/1/5 — the most the rate can rise at the first reset, at each later reset and over the life of the loan, in percentage points.

An ARM can make sense if you are confident you will sell or refinance before the first reset and the starting rate is meaningfully lower. If you plan to stay, or a higher payment would strain your budget, a fixed rate removes the risk. [Fixed vs adjustable-rate mortgages](https://mortgage-math-us.com/loan-types/fixed-vs-adjustable-rate/) works through a worst-case reset in dollars.

Term matters too. The 30-year fixed averaged 7.24% and the 15-year 6.6% in Freddie Mac’s latest survey; the shorter term costs more each month but far less in total interest. The [mortgage payment calculator](https://mortgage-math-us.com/tools/mortgage-payment-calculator/) compares both.

## Loan size: conforming, high-balance and jumbo

The Federal Housing Finance Agency sets the conforming loan limit each year. For 2026 it is $832,750 for a one-unit home in most counties, up from $806,500 in 2025, and up to $1,249,125 in high-cost areas. Loans between the baseline and the local high-cost limit are often called high-balance conforming loans; they follow the same rules but can price slightly differently.

Above your county’s limit, the loan is a [jumbo loan](https://mortgage-math-us.com/loan-types/jumbo-loans/). Fannie Mae and Freddie Mac can’t buy it, so each lender sets its own down payment, credit and cash-reserve requirements — usually stricter than for conforming loans. A larger down payment that brings the loan under the limit can open up conforming pricing and rules.

## Specialty loans

- **[Interest-only mortgages](https://mortgage-math-us.com/loan-types/interest-only-mortgages/)** let you pay only interest for a set period, then the payment jumps when principal is added. They can’t be Qualified Mortgages under the CFPB’s ability-to-repay rule, so they are offered as non-QM loans.
- **[Reverse mortgages](https://mortgage-math-us.com/loan-types/reverse-mortgages/)** let homeowners aged 62 years and older borrow against their equity with no monthly loan payment. The FHA-insured HECM has a 2026 limit of $1,249,125, an initial mortgage insurance premium of 2% and required counseling.
- **[Construction loans](https://mortgage-math-us.com/loan-types/construction-loans/)** fund a build in stages. A single-close loan converts to a permanent mortgage when the home is finished; Fannie Mae limits the construction period to 12 months at a time.
- **[DSCR investor loans](https://mortgage-math-us.com/loan-types/dscr-loans/)** qualify a rental property on its rent rather than your income. They are business-purpose, non-QM loans with lender-set terms; a conventional investment-property loan, by contrast, goes up to 85% of the price under Fannie Mae’s rules.

> **Watch out: Know what kind of loan you’re signing**
>
> A Qualified Mortgage can’t have interest-only payments, negative amortization or a term over 30 years, and caps points and fees at 3% on most loans. Loans outside those rules aren’t illegal, but they carry more risk — read the Loan Estimate’s “Loan Terms” table for a balloon payment, a prepayment penalty or a payment that can rise.

## How to choose, step by step

**How to choose a mortgage type**

1. **Check your eligibility** — Military service (VA), a rural address and moderate income (USDA) or a credit score below the conventional comfort zone (FHA) narrow the list quickly.
2. **Count your cash** — Down payment plus closing costs of about 2%–5% of the price, according to the CFPB, plus reserves.
3. **Decide fixed or adjustable** — Match the product to how long you expect to keep the loan.
4. **Check the loan limit for your county** — It decides whether you need a jumbo loan and caps FHA borrowing.
5. **Get Loan Estimates on two programs** — Request them on the same day so rates are comparable, and look at page 1 and the “Comparisons” section on page 3.
6. **Compare total cost over your time horizon** — Include how long mortgage insurance lasts, not only the first payment.

## All guides in this hub

- [Conventional loans](https://mortgage-math-us.com/loan-types/conventional-loans/)
- [FHA loans](https://mortgage-math-us.com/loan-types/fha-loans/)
- [VA loans](https://mortgage-math-us.com/loan-types/va-loans/)
- [USDA loans](https://mortgage-math-us.com/loan-types/usda-loans/)
- [Jumbo loans](https://mortgage-math-us.com/loan-types/jumbo-loans/)
- [Fixed vs adjustable-rate (ARM)](https://mortgage-math-us.com/loan-types/fixed-vs-adjustable-rate/)
- [Interest-only mortgages](https://mortgage-math-us.com/loan-types/interest-only-mortgages/)
- [Reverse mortgages](https://mortgage-math-us.com/loan-types/reverse-mortgages/)
- [Construction loans](https://mortgage-math-us.com/loan-types/construction-loans/)
- [DSCR investor loans](https://mortgage-math-us.com/loan-types/dscr-loans/)

## Frequently asked questions

### What are the main types of mortgage loans?

Conventional loans, FHA loans, VA loans and USDA loans are the four main programs. Each can be fixed-rate or, in most cases, adjustable-rate. Loans above the conforming limit are jumbo loans, and specialty types include interest-only, reverse, construction and investor loans.

### Which mortgage type has the lowest down payment?

VA and USDA loans allow 0% down for eligible borrowers. Conventional loans start at 3% and FHA loans at 3.5% with a credit score of 580 or higher.

### Is FHA or conventional better?

With strong credit and at least 5% down, a conventional loan is usually cheaper because PMI is priced on your score and can be cancelled. With a lower score or higher debts, FHA can be easier to qualify for. Compare Loan Estimates for both.

### What is the conforming loan limit for 2026?

$832,750 for a one-unit home in most of the country and up to $1,249,125 in high-cost areas, set by the Federal Housing Finance Agency.

### Do VA loans have mortgage insurance?

No monthly mortgage insurance. Most borrowers pay a one-time funding fee — 2.15% of the loan on a first purchase with less than 5% down — which can be financed. Veterans receiving VA disability compensation are exempt.

### Who qualifies for a USDA loan?

Buyers of a principal residence in a USDA-eligible rural area whose household income is no more than 115% of the area median, and who can show they can repay. USDA’s eligibility website checks both the address and the income.

### Should I choose a fixed or adjustable rate?

A fixed rate suits most buyers who plan to stay, because the payment never changes. An ARM can cost less if you are confident you will sell or refinance before the first rate reset, but its payment can rise up to the lifetime cap.

## Sources

- [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) — 30-year fixed rate, national weekly average; 15-year fixed rate, national weekly average (Week of Oct 29, 2026)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=010XX00US) — Median value of owner-occupied homes (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=010XX00US) — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- [Freddie Mac Research](https://www.freddiemac.com/research/insight/homeowners-insurance-costs) — Average homeowners insurance premium per $1,000 of home value (2023 data)
- [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) — Minimum down payment on some conventional loans; Minimum FHA down payment; Typical closing costs, low end (share of purchase price) (Oct 28, 2026)
- [Freddie Mac My Home](https://myhome.freddiemac.com/buying/breaking-down-pmi) — Typical PMI cost, low end; Typical PMI cost, high end (Oct 28, 2026)
- [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) — FHA upfront mortgage insurance premium; FHA annual MIP, 30-year loan, more than 95% LTV (Feb 22, 2023)
- [U.S. Department of Veterans Affairs](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/) — VA funding fee, first use, less than 5% down (Apr 7, 2023)
- [USDA Rural Development](https://www.rd.usda.gov/media/file/download/usda-rd-sfh-guarantee-loan-program-101-jan-2026.pdf) — USDA guaranteed loan upfront guarantee fee; USDA guaranteed loan annual fee (FY2026)
- [HUD Mortgagee Letter 2026-11](https://www.hud.gov/sites/default/files/hudclips/documents/2026-11hsgml.pdf) — FHA minimum score for maximum financing; FHA minimum decision credit score (90% LTV cap from 500 to 579) (Oct 8, 2026)
- [U.S. Department of Veterans Affairs](https://www.va.gov/housing-assistance/home-loans/loan-types/purchase-loan/) — VA purchase loan down payment (price at or below appraised value) (Jan 7, 2026)
- [USDA Rural Development](https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program) — USDA guaranteed loan down payment; USDA guaranteed loan income limit (share of area median income) (Oct 28, 2026)
- [FHFA](https://www.fhfa.gov/news/news-release/fhfa-announces-conforming-loan-limit-values-for-2026) — 2026 baseline conforming loan limit (one-unit); 2026 high-cost area conforming ceiling (one-unit); 2025 baseline conforming loan limit (one-unit) (2026 limit)
- [Fannie Mae Selling Guide B3-5.1-01](https://selling-guide.fanniemae.com/sel/b3-5.1-01/general-requirements-credit-scores) — Fannie Mae minimum score, manually underwritten fixed-rate loans (Apr 22, 2026)
- [HUD](https://www.hud.gov/news/hud-no-25-145) — 2026 FHA loan limit floor (one-unit, low-cost areas); 2026 FHA loan limit ceiling (one-unit, high-cost areas) (2026 limit)
- [CFPB](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/) — Ask your servicer to cancel PMI at this share of original value; PMI ends automatically at this share of original value (Oct 28, 2026)
- [24 CFR 206.33](https://www.ecfr.gov/current/title-24/subtitle-B/chapter-II/subchapter-B/part-206/subpart-B) — HECM reverse mortgage: youngest borrower must be at least (Oct 7, 2026)
- [Fannie Mae Selling Guide B2-1.4-02](https://selling-guide.fanniemae.com/sel/b2-1.4-02/adjustable-rate-mortgages-arms) — Index on Fannie Mae ARMs (Dec 10, 2025)
- [Fannie Mae Standard ARM Plan Matrix](https://singlefamily.fanniemae.com/media/6951/display) — Rate caps on a Fannie Mae 5/6 ARM (first/periodic/lifetime) (Oct 1, 2021)
- [HUD Mortgagee Letter 2025-22](https://www.hud.gov/sites/dfiles/hudclips/documents/2025-22hsgml.pdf) — 2026 HECM maximum claim amount (2026 limit)
- [HUD Mortgagee Letter 2017-12](https://www.hud.gov/sites/documents/17-12ml.pdf) — HECM initial mortgage insurance premium (share of maximum claim amount) (Oct 2, 2017)
- [Fannie Mae Selling Guide B5-3.1-02](https://selling-guide.fanniemae.com/sel/b5-3.1-02/conversion-construction-permanent-financing-single-closing-transactions) — Fannie Mae single-closing construction loan: longest single construction period (May 6, 2026)
- [Fannie Mae Eligibility Matrix](https://singlefamily.fanniemae.com/media/20786/display) — Fannie Mae maximum LTV, one-unit investment property purchase (Apr 1, 2026)
- [CFPB](https://www.consumerfinance.gov/ask-cfpb/what-is-a-qualified-mortgage-en-1789/) — Longest term allowed on a Qualified Mortgage (Jan 7, 2025)
- [CFPB, Federal Register 90 FR 57890](https://www.federalregister.gov/documents/2025/12/15/2025-22773/truth-in-lending-regulation-z-annual-threshold-adjustments-credit-cards-hoepa-and-qualified) — Qualified Mortgage points-and-fees cap (loans of $137,958 or more) (2026 threshold)
- [CFPB: Understand loan options](https://www.consumerfinance.gov/owning-a-home/loan-options/)
- [FHFA: Conforming loan limit values for 2026](https://www.fhfa.gov/news/news-release/fhfa-announces-conforming-loan-limit-values-for-2026)
- [VA: Purchase loan](https://www.va.gov/housing-assistance/home-loans/loan-types/purchase-loan/)
- [USDA Rural Development: Single Family Housing Guaranteed Loan Program](https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program)

_General information, not financial advice._