There is no single “best” mortgage for every buyer. The amount you have available, your eligibility, the property, and the total cost of the loan all matter. These are starting points for a conversation, not a determination that a program is available or that you qualify.
| Path | Who may consider it | Key question |
|---|---|---|
| Conventional | Buyers comparing flexible down payment and mortgage insurance choices | What do the rate, insurance, and total closing costs look like together? |
| FHA | Buyers comparing a low down payment and FHA qualification rules | How do upfront and ongoing mortgage insurance affect the cost? |
| VA | Eligible service members, veterans, and some surviving spouses | What are my benefit and funding fee details? |
| USDA | Eligible buyers and homes in qualifying rural areas, subject to income rules | Does the address and household income meet USDA requirements? |
| Down payment assistance | Buyers who may meet a state or local program’s rules | Is the help a grant or a loan, and when might repayment be due? |
| HECM for Purchase | Eligible buyers age 62 or older seeking a new principal residence | How much cash is needed, and what ongoing obligations remain? |
Traditional purchase loan
Conventional mortgages
A conventional loan is not insured by FHA or guaranteed by VA. Some conventional programs can allow a down payment as low as 3% for eligible borrowers. A down payment below 20% often brings mortgage insurance, so compare the full monthly payment as well as the cash needed at closing.
Ask for a side-by-side look at loan terms, mortgage insurance, closing costs, and the payment with taxes and homeowners insurance. The lowest down payment is not automatically the lowest overall cost.
FHA-insured purchase loan
FHA loans
FHA loans are made by approved lenders and insured by the Federal Housing Administration. Eligible buyers may be able to put as little as 3.5% down. FHA has mortgage insurance costs, and loan limits and property requirements can affect the options for a particular purchase.
FHA can be worth comparing with conventional financing, especially when down payment or credit factors are part of the discussion. The better choice depends on actual quotes and your situation, not a blanket rule.
VA-backed purchase loan
VA loans
Eligible veterans, service members, and some surviving spouses may use a VA-backed purchase loan. A down payment may not be required, although closing costs still matter. VA loans do not require monthly mortgage insurance, but a one-time funding fee may apply unless the borrower is exempt.
Eligibility and entitlement, property details, lender approval, and the final terms all need review. Ask how the funding fee, any down payment, and the rest of the closing costs compare in your case.
USDA rural housing programs
USDA home loans
USDA Rural Development has two purchase paths for eligible homes in qualifying rural areas. Its guaranteed loan program works through approved lenders for eligible low- and moderate-income households. Its direct loan program serves eligible low- and very-low-income applicants through USDA. These are different programs with different application and income rules.
Eligible buyers may be able to purchase with no down payment, but no down payment does not mean no closing costs or program fees. Check the property address against USDA’s eligibility map, the household income limit for that area, and which program and lender are available before making plans around USDA financing.
Local and program-specific help
Down payment assistance
State and local housing agencies and other organizations may offer help with a down payment or closing costs. Programs vary by location and can have income, purchase price, education, occupancy, or lender requirements. Some assistance is a grant; some comes as a loan that may be deferred, forgivable under conditions, or repayable.
Before counting on a program, confirm whether it is currently funded, whether it pairs with the mortgage you want, and what happens if you sell or refinance. A buyer who has owned a home before may still qualify for some programs; eligibility is program-specific.
For eligible buyers 62 and older
HECM for Purchase
A Home Equity Conversion Mortgage (HECM) for Purchase is an FHA-insured reverse mortgage that can help an eligible buyer age 62 or older purchase a new principal residence. The buyer combines HECM proceeds with funds they bring to closing, so a meaningful cash contribution is generally needed. HUD-approved HECM counseling is required.
There are no required monthly principal and interest payments while the loan obligations are met, but this does not make the home free to own. Borrowers must continue to live in the property as a principal residence, pay property taxes and insurance, and maintain the home. Interest and fees add to the balance over time, reducing equity unless home values or payments offset that growth. The loan becomes due under circumstances such as the borrower no longer occupying the home as a principal residence or failing to meet loan obligations.
If this is a possibility for you or a parent, compare the cash needed, fees, long-term equity impact, and alternatives with a HECM counselor and a knowledgeable lender before deciding.
How to compare options fairly
Bring the same home price, down payment, estimated taxes, insurance, and expected time in the home to each comparison. Look at total cash to close, monthly cost, mortgage insurance or program fees, and the official Loan Estimate where applicable. Try the payment calculators for rough planning, then discuss actual terms with a loan officer.
Want to see which paths may fit?
Start with the short questionnaire. I’ll follow up to discuss your goals, available cash, and what additional information may be needed.
Start prequalificationSubmitting the questionnaire is not a loan application approval or a commitment to lend.