A Conventional loan is a type of mortgage that is issued by private lenders like banks, credit unions, or mortgage companies (unlike those that are insured or guaranteed by the government). Conventional loans can be used to by or refinance homes and fall in to two categories: Conforming and Non-conforming.

Conforming loans meet the requirements to be sold to Fannie Mae or Freddie Mac and must not exceed loan amounts set by the Federal Housing Finance Agency (FHFA). For most of the United States, the loan limit in 2024 for a one-unit property is $766,550. Nonconforming loans, on the other hand, do not meet these criteria. A jumbo loan is an example of a nonconforming loan because it exceeds the FHFA loan limits.

Conventional loans typically require a higher credit score and a larger down payment compared to government-backed loans. The minimum down payment is typically 5%; however, first-time homebuyers may put down as little as 3%.

An FHA loan is a type of mortgage that is insured by the Federal Housing Administration (FHA). The FHA is a government agency that protects lenders against losses if borrowers default on the loan. An FHA loan is popular with first-time buyers because it requires a lower down payment and credit score than Conventional loans.

A non-QM is a type of home loan that does not meet the strict criteria of a qualifying mortgage. It is aimed at borrowers with financial profiles that don't fit the requirements of a typical qualified mortgage, such as inconsistent or nontraditional income. Depending on the lender's requirements, borrowers may demonstrate their ability to repay the loan using bank statements, asset qualifiers, or 1099s.

A USDA loan can help make purchasing a new home more affordable for those living in rural areas. The U.S. Department of Agriculture supports homeownership opportunities to low- and moderate-income rural Americans through several loan, grant and loan guarantee programs. These loans have income limits which vary by program and location. USDA loans typically do not require a down payment.

A VA loan is a home loan backed by the Department of Veterans Affairs. It's a mortgage loan option for current or former members of the armed services. VA loans have no or low down payment requirements and lower interest rates than traditional mortgage products.