Understanding the 4 Main Types of Home Loans: VA, USDA, FHA & Conventional

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When it comes to buying a home 🏡, one of the biggest questions buyers face is which type of loan is right for them. Choosing the wrong loan can lead to delays, surprises, or even losing out on a home.

💰 The 4 main home loans — VA, USDA, FHA, and Conventional — each serve different buyers.

• VA & USDA: 100% financing, strict property rules, for military members or rural areas.

• FHA: 97% financing, flexible for first-time buyers with lower credit.

• Conventional: More flexibility, higher down payments, lenient on property condition.

✅ Understanding which loan fits you saves time, stress, and money when buying a home.

🇺🇸 VA Loans – 100% Financing for Military Members

VA loans offer 100% financing, meaning:
✅ No down payment required
✅ Competitive interest rates
✅ No private mortgage insurance (PMI)

⚠️ Important:

• You must be an active-duty service member, veteran, or eligible spouse
  
  

• The home must meet strict condition standards
  
  

Because the lender is financing all the money, they are much more careful about the property’s condition.

🌾 USDA Loans – 100% Financing for Rural Areas

USDA loans also provide 100% financing, but eligibility is based on location, not military service.

🔑 Key things to know:

• Many areas in Upstate New York qualify
  
  

• Some entire counties are USDA-eligible
  
  

• The home itself must qualify, not just the buyer
  
  

⚠️ Like VA loans, USDA loans are strict on property condition.

🏠 FHA Loans – Ideal for First-Time Homebuyers

FHA loans typically finance about 97% of the home’s value, meaning:
💰 Buyers usually put down 3.5%

✅ Great for buyers who:

• Don’t have a lot of cash saved
  
  

• Are buying their first home
  
  

• Need more flexible credit guidelines
  
  

⚠️ FHA still has rules:

• No peeling paint
  
  

• No rotted wood
  
  

• No safety hazards
  
  

💼 Conventional Loans – More Flexibility for Stronger Buyers

Conventional loans usually require:

• 5%, 10%, or 20% down
  
  

• Stronger credit history
  
  

🔥 Big advantage:
Putting 20% down avoids PMI and gives buyers more flexibility on inspections and repairs.

💡 Most lenient loan type when it comes to home condition.

✅ The Big Picture

📌 The more money the bank gives you, the stricter they become.
📌 The more money you put down, the more flexibility you have.

Understanding this upfront helps buyers move faster and with confidence.

Want to Take a Deeper Dive?

Team Taylor has amazing mortgage professionals ready to take this conversation to the next level and make it personal to YOU and your needs.  Reach out and let us make a connection

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