Conventional, FHA, VA, USDA and jumbo loans: which mortgage type fits you?
Conventional loans aren't government-backed and usually need private mortgage insurance (PMI) with less than 20% down. FHA loans (insured by HUD) allow lower credit scores and 3.5% down but charge mortgage insurance premiums. VA loans are for eligible veterans and service members, usually need no down payment or monthly mortgage insurance, and charge a one-time funding fee. USDA guaranteed loans serve eligible rural areas and incomes. Jumbo loans are conventional loans above the conforming limit, which is $832,750 for a one-unit home in most of the US in 2026.
The loan "type" (also called the loan program) decides who backs the loan, how much you must put down, what kind of mortgage insurance you pay and how strict the credit rules are. The interest rate and fees still vary from lender to lender within each type, so the type is only the first decision.
Side-by-side comparison
| Loan type | Backed by | Minimum down payment | Insurance or fee | Best known for |
|---|---|---|---|---|
| Conventional (conforming) | Not government-backed; most are sold to Fannie Mae or Freddie Mac | Some programs allow 3% | PMI usually required under 20% down; can be cancelled later | Strong credit, flexible property types |
| FHA | Insured by the Federal Housing Administration (HUD) | 3.5% with a credit score of 580 or higher | Upfront MIP of 1.75% of the base loan plus an annual MIP | Lower credit scores, smaller down payments |
| VA | Guaranteed by the U.S. Department of Veterans Affairs | Often none | One-time VA funding fee (some borrowers are exempt); no monthly mortgage insurance | Eligible veterans, service members and some surviving spouses |
| USDA guaranteed | Guaranteed by USDA Rural Development | Often none | Upfront guarantee fee plus an annual fee | Eligible rural and suburban areas, income limits apply |
| Jumbo | Not government-backed; above the conforming limit | Set by each lender | Set by each lender | Higher-priced homes |
Sources: CFPB loan-option guides, HUD Mortgagee Letter 2023-05, VA, USDA and FHFA (listed below).
Conventional loans
A conventional loan is any mortgage not insured or guaranteed by a government agency. According to the CFPB, some conventional loans allow as little as 3% down, but if you put down less than 20% you will usually pay private mortgage insurance. Unlike FHA mortgage insurance, PMI on a conventional loan can be cancelled once you build enough equity (see our PMI guide).
"Conforming" conventional loans stay at or below the limit set each year by the Federal Housing Finance Agency (FHFA). For 2026 the baseline limit for a one-unit property is $832,750 in most of the country, with higher limits in designated high-cost areas.
FHA loans
FHA loans are made by private lenders and insured by HUD's Federal Housing Administration. The CFPB notes they allow lower credit scores and down payments as low as 3.5% for borrowers with a credit score of 580 or higher. You pay two kinds of mortgage insurance premium (MIP): an upfront premium of 1.75% of the base loan amount, which can be financed, and an annual premium paid monthly. Under HUD Mortgagee Letter 2023-05, the annual MIP for most 30-year FHA loans of $726,200 or less with under 5% down is 0.55% a year. If you put down less than 10%, the annual MIP generally lasts for the life of the loan; with 10% or more down it lasts 11 years.
VA loans
VA-backed loans come from private lenders and are guaranteed by the Department of Veterans Affairs. Eligible veterans, service members and some surviving spouses can often buy with no down payment and no monthly mortgage insurance. Instead, most borrowers pay a one-time VA funding fee. For a first-time purchase with less than 5% down, VA's current chart (effective April 7, 2023) sets the fee at 2.15% of the loan amount; it drops to 1.5% with 5% down and 1.25% with 10% down. Veterans receiving VA disability compensation, and some others, are exempt.
USDA guaranteed loans
USDA Rural Development guarantees loans from approved lenders for homes in eligible rural areas, for households within the program's income limits. For fiscal year 2026 USDA set the upfront guarantee fee at 1% of the loan and the annual fee at 0.35% of the average unpaid balance. USDA publishes new fee rates each fiscal year, so check its current notice.
Jumbo loans
A jumbo loan is a conventional mortgage larger than the conforming limit. Because Fannie Mae and Freddie Mac can't buy it, each lender sets its own credit, down payment and cash-reserve rules, so terms can vary more between lenders than for conforming loans.
How to choose
- Check eligibility first. VA and USDA can be the cheapest options if you qualify; check VA eligibility and USDA's property and income maps.
- Compare total cost, not just the rate. An FHA loan can have a lower rate than a conventional loan but cost more once lifetime MIP is included. Ask lenders for Loan Estimates on two loan types and compare them line by line.
- Think about how long you'll keep the loan. Removable PMI matters more if you'll stay in the home for years.
- Use the calculators. Try the mortgage payment calculator with each type's insurance cost.
Frequently asked questions
What is the minimum down payment for an FHA loan?
The CFPB says FHA loans allow down payments as low as 3.5% for borrowers with credit scores of 580 or higher. Lenders can set stricter requirements.
What is the 2026 conforming loan limit?
FHFA set the 2026 baseline conforming loan limit for a one-unit property at $832,750 in most of the United States. High-cost areas have higher limits.
Do VA loans have mortgage insurance?
VA loans don't require monthly mortgage insurance, but most borrowers pay a one-time VA funding fee. It is 2.15% of the loan for a first-time purchase with less than 5% down, under VA's chart effective April 7, 2023.
Can I cancel FHA mortgage insurance?
Under HUD's current rules, annual FHA MIP lasts 11 years if you put at least 10% down, and generally for the life of the loan with less than 10% down. Many borrowers later refinance into a conventional loan to drop it.
Is Express Approvals a lender?
No. Express Approvals is an educational website. We don't make loans, take applications or make credit decisions.
Sources
- CFPB: Understand loan options (accessed October 29, 2026)
- CFPB: Conventional loans (accessed October 29, 2026)
- CFPB: FHA loans (accessed October 29, 2026)
- CFPB: Special loan programs (VA, USDA) (accessed October 29, 2026)
- HUD Mortgagee Letter 2023-05: FHA annual MIP rates (PDF) (accessed October 29, 2026)
- VA: Funding fee and loan closing costs (accessed October 29, 2026)
- USDA Rural Development: Single Family Housing Guaranteed Loan Program (accessed October 29, 2026)
- Federal Register: USDA OneRD guarantee fee rates for FY2026 (accessed October 29, 2026)
- FHFA: Conforming loan limit values for 2026 (accessed October 29, 2026)
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