Conventional vs. Government Loans

Conventional vs. Government Loans

FHA, VA, and RHS mortgages are government loans. All other mortgages are conventional loans.

FHA loans are administered by the Federal Housing Administration (FHA), part of the U.S. Dept. of Housing and Urban Development (HUD). FHA administers mortgage loan programs with lower down payment requirements that are easier to qualify for than conventional loans. FHA loans can't exceed the statutory limit. The loans are made by private lenders and insured by FHA. FHA loans are attractive to first-time home buyers, lower-income borrowers, and those with limited down payments.

VA loans are also made by private lenders, but are guaranteed by the U.S. Dept. of Veterans Affairs (VA). This guarantee allows veterans and service personnel to obtain a home loan with favorable terms and usually without a down payment. It's easier to qualify for a VA loan than a conventional one, but lenders generally limit the maximum amount. The VA determines your eligibility, but you still apply to private lending institutions.

RHS loans are guaranteed by the U.S. Dept. of Agriculture for rural properties. Let us help you determine if you qualify. Conventional loans are either conforming or non-conforming. Conforming mortgages offer a lower rate, but must conform to certain maximum limits and guidelines. Non-conforming, jumbo mortgages are for amounts above the conforming loan limits and have a higher interest rate.

If you'd like more information about any of these loans for your home purchase or refinance, please call us or reply to this post. We're happy to put together the perfect solution for your special situation...and best wishes in this and all your endeavors!