Close to 40% of Americans take out a mortgage to finance their home purchases. For members of Gen Z, that percentage shoots up to 78%.
But home loans are not a monolith, and understanding the most common types can help you make the best choice for your homebuying journey.
Common mortgage types
Conventional mortgages
A conventional mortgage is any home loan offered by a bank, credit union, fintech or any other and not backed by the government.
In 2023, conventional mortgages made up approximately 73% of new single-family home sales in the U.S.
- Credit score: 620 credit score
- Debt-to-income ratio: Maximum DTI of 43% to 50%
- Down payment: At least 5% down
- Employment: Steady and consistent income, ideally for at least two years at the same job
- Private mortgage insurance: Until you have 20% equity in your home.
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10, 15 or 30 years for fixed-term conventional loans, 30-year VA and FHA loans. Custom mortgages with fixed-rate terms from 8 to 29 years.
620 for conventional, 500 for FHA
0% for VA, 1% for RocketONE+, 3% for conventional, 3.5% for FHA, 10% to 15% for jumbo
10 – 30 years
620
3% for DreaMaker℠ or Standard Agency loan
If a mortgage loan meets the limits set by the Federal Housing Finance Agency, it's considered a "conforming loan." The FHFA limit for conforming loans in 2025 is $806,500 for most counties, although it can be as high as $1,209,750 in certain high-cost counties.
Jumbo loans can be considered conventional loans, but they're nonconforming loans because they exceed that annual limit. Other reasons a loan may be nonconforming are if it doesn't mean standard credit score, down payment or debt-to-income requirements. Non-qualifying mortgages and interest-only loans are also nonconforming.
Because these loans are riskier for the lender, they usually have higher interest rates and fees. However, nonconforming loans can be a lifeline for people in unique financial situations.
Calculate your estimated mortgage payment
FHA loans
Mortgages insured by the Federal Housing Administration are known as FHA loans, although they are available from many commercial lenders. They have benefits that can make homebuying a reality for people who would otherwise be excluded.
For example, a borrower with a 500 credit score (well below the typical 620 needed for a conventional loan) can get approved with 10% down. If your score is at least a 580, you can seal the deal with just 3.5% down.
Rate closes on FHA loans in as little as 10 days and its online application process includes hybrid closings.
Rate
Annual Percentage Rate (APR)
Apply online for rates.
Types of loans
Conventional, FHA loan, VA loan, jumbo loan, physician loan, refinancing, HELOC, reverse mortgage
Terms
15-year and 30-year terms for fixed-rate mortgages; adjustable-rate mortgages have 5-year, 7-year or 10-year introductory periods
Credit needed
620 for conventional, 580 for FHA loans
Minimum down payment
3.5% with FHA loan
While you won't pay private mortgage insurance, you will have to pay a mortgage insurance premium as part of your monthly payment: That can be as much as 0.75% of the loan every year.
If you put down less than 10% you'll have to pay premiums throughout the life of the loan. If you come to the table with between 10% and 20%, you may be able to stop with premiums after 11 years.
VA loans
The Department of Veterans Affairs backs VA loans to active and retired military and some surviving spouses. Again, while the VA guarantees these mortgages and they have special perks, they're issued by conventional lenders.
VA loans usually have lower rates and borrowers can roll closing costs into the overall loan amount, making it easier to buy a home without much cash up front. You can get a VA loan with as little as 0% down and no private mortgage insurance, although lenders usually want to see a 620 credit score.
Navy Federal Credit Union offers VA loans at some of the lowest rates on the market.
USDA loans
The United States Department of Agriculture insures mortgages in specific rural and suburban areas throughout the country. (You can view See eligible areas on the USDA website.)
Like VA loans, USDA loans can be approved with 0% down and borrowers don't have to pay private mortgage insurance. Instead, you make a one-time upfront guarantee fee equal to 1% of the loan, as well as pay 0.35% of the loan every year.
Beyond geographical limits, USDA home loans have income caps: In 2025, a household of four can make as much as $112,450 and be approved.
Normally, USDA loans require a 620 credit score, but Guild will approve borrowers with a score of as low as 540.
Guild Mortgage
Types of loans
Conventional, FHA, VA, USDA, Arrive Home, Zero Down, jumbo, renovation, refinancing, reverse mortgages, home equity loans
Terms
10 to 30 years
Minimum credit score
540 for FHA, VA and USDA loans; 600 for Zero Down; 620 for conventional loans, 680 for jumbo loans. Nontraditional credit options available
Minimum down payment
0% for USDA, VA, Arrive Home™ or Zero Down; 1% for conventional loans, 3.5% for FHA loans
Jumbo loans
Any mortgage over the FHFA's conforming loan limit is considered a jumbo loan. Many banks offer jumbo loans, usually capping them at $3 or $4 million. Chase Bank, however, has financed loans up to $9.5 million
Chase Bank
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, DreaMaker℠ loans and Jumbo loans
Terms
10 – 30 years
Credit needed
620
Minimum down payment
3% if moving forward with a DreaMaker℠ loan
Terms apply.
Offers first-time homebuyer assistance?
Yes — click here for details
Most mortgages are offered as a fixed-rate loan, with an interest rate that remains static, or as an adjustable-rate mortgage (ARM), which sees its interest rate fluctuate.
Fixed-rate mortgage
A fixed-rate mortgage maintains the same interest rate over the life of the loan. A 30-year mortgage with a fixed 5% interest rate will stay at 5% until you make your final mortgage payment. That certainty makes fixed mortgages a popular option, available in terms of 5, 10, 15, 20 or 30 years..
Adjustable-rate mortgage
An adjustable-rate mortgage (or ARM) starts with a fixed rate (usually for 5, 7, or 10 years) but then it starts to fluctuate based on market conditions and can change every six months to a year.
The starting rate for an ARM is typically lower than a fixed rate loan, but it's less predictable later on.
An ARM may make sense in a high-interest-rate market or if you plan to move before the fixed period ends.
Picking the right mortgage
The home loan type you choose will have a huge impact on your homebuying experience, from the interest rate you get to the requirements for your credit score, income and down payment. It will also determine what lender you choose and your options.
| Minimum credit score | Minimum down payment | Best for | |
|---|---|---|---|
| Conventional | 620 | 3% to 5% | Flexibility and diversity in loan options |
| Jumbo | 680 | 10% | High-priced home purchase |
| FHA loans | 500 | 3.5% | Borrower with less-than-perfect credit |
| VA loans | 620 | 0% | Veterans and active military personel |
| USDA loans | 620 | 0% | Purchases in certain rural and suburban areas |
Mortgage types FAQ
What type of mortgage should I get if I have bad credit?
FHA loans are a good option for those who have bad credit, since you can get approved with just a FICO 500 with a 10% down payment.
What type of mortgages require no down payment?
VA loans and USDA loans are both available for as little as 0% down. Investigate conventional mortgages, too, since many lenders have proprietary loans with down payment assistance that may get you approved with nothing down.
How long after I take out a mortgage can I refinance?
There is no set amount of time, but most lenders want to see a homebuyer who has made six to 12 months of consistent mortgage payments before they'll approve them for refinancing.
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