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The 4 Major Home Mortgage Loans Explained

We get a lot of questions about loans and what types of loans there are, so we’ve put together a little info on the four major types of loans. 

Conventional Loan

A conventional loan is a mortgage loan that is not backed by a government agency. There are two categories: conforming and non-conforming. A confirming loan follows lending rules set by the FNMA (Fannie Mae) and the FHLM (Freddie Mac). Some lenders will or may offer non-conforming conventional loans that offer more flexibility. These loans are originated and serviced by private mortgage lenders like banks, credit unions, and other financial institutions. 

VA Loans

A VA loan is a mortgage loan guaranteed by the United States Department of Veterans Affairs. This program is only for military members currently serving in the US Military, reservists, and select surviving spouses, and can be used to purchase single-family homes, condos, multi-unit properties, manufactured homes, and new construction. If you are interested in a VA loan, the VA sets the rules for who may qualify, sets the guidelines, and requirements for how the mortgages can be offered financially under the program. 

FHA Loan

A FHA loan is a government-backed mortgage insured by the Federal Housing Administration. This loan is popular with first time home owners because it requires lower minimum credit scores and down payments than many other conventional loans. You can only get these loans through an FHA approved mortgage lender. The FHA loan comes in fixed rate terms of 15 and 30 years.


A USDA loan, also known as the USDA Rural Development Guaranteed Housing Loan Program, is a mortgage loan offered to rural property owners by the United States Department of Agriculture. USDA home loans have a zero down payment mortgage for eligible rural and suburban home buyers. There are three types of USDA loan programs.

Loan guarantees – this is where the USDA guarantees a mortgage issued by a participating local lender. 

Direct loans are issued by the USDA, these mortgages are for low and very low income applicants. 

Home improvement loans and grants – these loans permit homeowners to repair or upgrade their homes. 

If you have any questions about the different types of loans outlined above, please reach out to us! We would be happy to get you in touch with our preferred mortgage lender. 

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