Conventional / FHA / VA Loans
The three most common programs for first-time buyers and primary-home borrowers — qualifications, down payments, and ideal profiles, explained.
Conventional Mortgage
The most common type of U.S. mortgage. Loans backed by Fannie Mae and Freddie Mac that fall under the federal Conforming Loan Limit qualify as Conventional. They offer competitive rates and transparent terms — the standard choice for borrowers with strong credit and stable income.
- Down PaymentFrom 3% (first-time); commonly 5%–20%
- Credit Score620+ recommended (680+ for under 20% down)
- Loan Term10/15/20/25/30-year fixed, or 5/1, 7/1, 10/1 ARM
- Loan LimitConforming Loan Limit (MA single-unit 2026 ≈ $806,500)
- PMIRequired for <20% down; can be removed later
- Income DocumentationW-2s, 2 years of tax returns, 2 months of pay stubs
FHA Federal Housing Administration Loan
Insured by the Federal Housing Administration. Designed for first-time buyers or borrowers with lower credit scores. The standout feature is a low 3.5% down-payment threshold and acceptance of credit scores from 580+. For families with limited savings, FHA is an efficient bridge to homeownership.
- Min. Down Payment3.5% (credit 580+); 10% (credit 500–579)
- Credit ScoreMinimum 500 (with 10% down); 580+ recommended
- Loan Term15- or 30-year fixed
- MIP1.75% upfront + monthly MIP; cannot be removed for the life of the loan in most cases
- DTI RatioGenerally up to 43%; flexibility for strong overall profiles
- Best ForFirst-time buyers with moderate credit and limited savings
VA Veterans Affairs Loan
Guaranteed by the U.S. Department of Veterans Affairs (VA). Available to active-duty, veterans, and qualifying military families. Standout benefits: zero down and no PMI, making it the leading option for military households.
- Down Payment0% (within VA-guaranteed limit)
- Credit ScoreNo official minimum; most lenders look for 580–620+
- MIP / PMINo monthly insurance — only a one-time VA Funding Fee
- EligibilityCertificate of Eligibility (COE) for active duty, veterans, and qualifying spouses
- Loan LimitNo down payment up to county VA limit; proportional down beyond
- Other BenefitsUsed for purchase or refinance (IRRRL streamline)
The Three Programs at a Glance
Quickly find the program best suited to your situation.
| Item | Conventional | FHA | VA |
|---|---|---|---|
| Min. Down Payment | 3% | 3.5% | 0% |
| Recommended Credit | 620+ | 580+ | 580+ |
| Insurance | PMI (removable) | MIP (life of loan / conditional) | One-time Funding Fee |
| Best For | Stable income, strong credit | First-time / mid credit | Active duty / veterans |
| Loan Cap | Conforming Limit | FHA County Limit | VA County Limit |