Types of Mortgage Loans Compared: Which Mortgage Is Right for You?

There are six main types of mortgage loans in the US: conventional, FHA, VA, USDA, jumbo and non-QM. Each one can be set up as a fixed-rate or an adjustable-rate loan, usually over 15 or 30 years. The best type for you depends on your credit score, savings, income, military service, where you want to live and your immigration status.

The quickest way to narrow it down is to ask three questions. Are you a veteran or service member? Are you buying in a rural or small-town area? How much can you put down? Those answers usually point to VA, USDA, FHA or conventional. Jumbo and non-QM loans fill the gaps for very large loans or unusual income.

This guide puts every main program in one comparison table, then explains fixed vs adjustable rates, 15 vs 30 years, government vs conventional loans, and a simple decision guide. Figures are for 2026 and come from FHFA, HUD, VA, USDA, Fannie Mae and the CFPB.

What are the main types of mortgage loans?

The six main types are conventional (conforming) loans, FHA loans, VA loans, USDA loans, jumbo loans and non-QM loans. FHA, VA and USDA are backed by the federal government. Conventional and jumbo loans are not. Non-QM loans fall outside federal Qualified Mortgage rules and serve borrowers with unusual income or status.

Our mortgage requirements by loan type guide goes deeper on credit, DTI and down payment rules for each program.

Conventional loans

A conventional loan is a mortgage with no government insurance, usually sold to Fannie Mae or Freddie Mac. In 2026, the baseline conforming loan limit is $832,750 for a one-unit home. Down payments can start at 3%, and PMI is required below 20% down but can be removed later.

The FHFA’s 2026 announcement sets the one-unit ceiling in high-cost areas at $1,249,125. Fannie Mae’s credit score section says no minimum score is required for loans run through its Desktop Underwriter (DU) system. Manually underwritten loans need at least 620 for fixed rates and 640 for ARMs.

The CFPB’s PMI guide explains the cancellation rules. Read more in our conventional loans guide.

FHA loans

FHA loans are insured by the Federal Housing Administration. They allow 3.5% down with a credit score of 580 or higher, or 10% down with a score from 500 to 579. Borrowers pay a 1.75% upfront premium plus an annual premium. In 2026, one-unit FHA limits run from $541,287 to $1,249,125 by county.

HUD’s Mortgagee Letter 2025-23 sets those 2026 limits. Under Mortgagee Letter 2023-05, most 30-year FHA loans at or below $726,200 pay an annual premium of 0.50% or 0.55%. It lasts 11 years if you put at least 10% down, otherwise for the life of the loan. HUD’s Mortgagee Letter 2026-11 adds new credit score models from January 1, 2027 but keeps the same minimum scores.

Compare FHA with conventional loans in our FHA vs conventional guide.

VA loans

VA loans are guaranteed by the Department of Veterans Affairs for eligible veterans, service members and some surviving spouses. Most need no down payment. There is no VA loan limit if you have full entitlement, but the lender must still approve you, and most borrowers pay a one-time funding fee.

The VA funding fee for a purchase is 2.15% on first use with less than 5% down, and 3.3% after first use. It falls to 1.5% with 5% down and 1.25% with 10% down. Veterans who receive VA disability compensation are among those exempt. VA loans have no monthly mortgage insurance. See our VA loans guide.

USDA loans

USDA guaranteed loans help moderate-income buyers in eligible rural and some suburban areas. Most need no down payment. Your household income must be under the program’s moderate-income limit, the home must be your primary residence, and you pay upfront and annual guarantee fees.

Under 7 CFR 3555, applicants must be US citizens, US non-citizen nationals or qualified aliens, and the annual fee cannot exceed 0.5% of the average unpaid balance. USDA sets the current fee rates each year. Check addresses and income limits on the USDA eligibility site.

Jumbo and non-QM loans

Jumbo loans are mortgages above the conforming limit, so Fannie Mae and Freddie Mac do not buy them. Non-QM loans fall outside federal Qualified Mortgage rules. Both are set by each lender, and both usually ask for more down, stronger reserves or higher rates than conforming loans.

A jumbo loan suits a high-income buyer in an expensive market, as long as they can show strong credit and reserves. Non-QM loans suit self-employed people paid through bank deposits, real estate investors, ITIN filers and foreign nationals. The CFPB explains that Qualified Mortgages cannot have interest-only payments, negative amortization, most balloon payments or terms longer than 30 years. Expect higher rates and fees in exchange for that flexibility.

Fixed-rate vs adjustable-rate mortgages

A fixed-rate mortgage keeps the same interest rate for the whole loan. An adjustable-rate mortgage (ARM) starts with a set rate for an introductory period, then changes at regular intervals based on an index plus a margin. Fixed rates give certainty; ARMs may start lower but carry payment risk.

The CFPB’s comparison warns, “Don’t assume you’ll be able to sell your home or refinance your loan before the rate changes.” Ask the lender for the caps on each change and over the life of the loan, and the highest payment you could face.

15-year vs 30-year mortgages

A 15-year mortgage has a higher monthly payment but a lower rate and far less total interest. A 30-year mortgage spreads payments out, so each month is cheaper, but you pay much more interest over time. Most buyers choose 30 years for flexibility.

You can also take a 30-year loan and pay extra toward principal when you can. That keeps the required payment low while cutting interest. Check that your loan has no prepayment penalty first.

Government-backed vs conventional loans

Government-backed loans (FHA, VA, USDA) are insured or guaranteed by a federal agency, so lenders accept lower down payments and credit scores. Conventional loans have no government backing and follow Fannie Mae or Freddie Mac rules. They usually reward higher scores and larger down payments with lower costs.

Our mortgage insurance guide compares PMI, MIP, the VA funding fee and USDA fees side by side.

What do you need to apply for any type of mortgage?

Every loan type asks for the same basic proof: who you are, what you earn, what you owe, and where your down payment comes from. The program changes the limits, not the paperwork. Gathering documents before you talk to lenders makes preapproval faster and comparisons fairer.

1. Identity and status: photo ID, Social Security number or other tax number, and residency documents if you are not a citizen.
2. Income: recent pay stubs, W-2s or 1099s, and usually two years of federal tax returns.
3. Assets: two or more months of bank and investment statements, plus a gift letter if family is helping.
4. Debts: the lender pulls your credit report, but list any debts that may not appear, such as personal loans from family.
5. Program proof: a VA Certificate of Eligibility, a USDA-eligible address, or a down payment assistance approval.

Which mortgage is right for me?

Start with the programs you qualify for by status, then compare cost. Veterans should price VA first. Rural buyers should check USDA. Buyers with scores under about 620 or very small savings often compare FHA. Strong-credit buyers with 3% or more down usually compare conventional.

1. Are you a veteran, service member or eligible surviving spouse? Get a VA quote first.
2. Is the home in a USDA-eligible area, and is your income under the limit? Get a USDA quote.
3. Is your credit score under the conventional sweet spot, or your savings very small? Compare FHA with a 3% down conventional loan.
4. Is your loan above $832,750 (or your county’s higher limit)? Look at jumbo loans.
5. Is your income hard to document, or do you file with an ITIN? Look at non-QM or ITIN mortgages.
6. Need help with the down payment? Check down payment assistance programs in your state.
7. Compare at least three Loan Estimates for the same loan type and term.