Quick takeaways
- These four loan types differ mainly in who insures or guarantees them, how mortgage insurance works, and general eligibility concepts.
- None of these structural differences make one type universally “better” — the right fit depends on an individual's own circumstances.
- This page is a neutral comparison only, not a recommendation of any kind.
The big picture
Think of it this way: these four names describe different structures behind a loan — basically, who stands behind it and under what general rules — not different lenders. Many individual lenders can offer more than one of these loan types.
At a glance
| Feature | Conventional | FHA | VA | USDA |
|---|---|---|---|---|
| Backed by | Not government-insured | Federal Housing Administration | U.S. Department of Veterans Affairs | U.S. Department of Agriculture |
| Typical down payment range | Commonly around 3%–20% | Commonly around 3.5% and up | Can be 0% for eligible borrowers | Can be 0% in eligible areas |
| Mortgage insurance style | Private mortgage insurance (PMI), often removable over time | Mortgage insurance premium (MIP), which may apply for the life of the loan depending on terms | Generally no monthly mortgage insurance, though a funding fee often applies | A guarantee fee structure, generally different from conventional PMI |
| General eligibility concept | Broadly available; often considers credit and income factors set by the loan program | Designed to be broadly accessible, with its own credit and down-payment framework | Generally tied to military service history | Generally tied to income limits and property location |
| Property location notes | No specific location requirement | No specific location requirement | No specific location requirement | Generally limited to USDA-eligible rural and some suburban areas |
These figures describe common general ranges for educational purposes only. Actual terms, percentages, and eligibility rules vary by lender, program updates, and individual circumstances.
Conventional loans
A conventional loan isn't insured or guaranteed by a government agency. Down payments can range fairly widely, and private mortgage insurance (PMI) is generally required when the down payment is below a certain threshold — but PMI on a conventional loan can often be removed later once enough equity builds up.
FHA loans
FHA loans are insured by the Federal Housing Administration and are generally structured to be accessible with a relatively lower down payment. Mortgage insurance on FHA loans (called MIP) works differently from PMI — depending on the loan's terms, it may stick around for the life of the loan rather than dropping off automatically. (See our PMI & MIP guide for the fuller picture.)
VA loans
VA loans are guaranteed by the U.S. Department of Veterans Affairs and are generally available to eligible veterans, active-duty service members, and some surviving spouses. A notable structural feature is that they can allow for 0% down for eligible borrowers, and they generally don't require monthly mortgage insurance — though a one-time funding fee often applies instead.
USDA loans
USDA loans are backed by the U.S. Department of Agriculture and are generally designed for income-eligible buyers purchasing in USDA-designated rural or certain suburban areas. Like VA loans, they can allow for 0% down, and they use their own guarantee fee structure instead of conventional PMI.
A note on how these compare
Here's the part that surprises a lot of people: there isn't a single “best” loan type in general. Each one is structured around a different purpose — broad accessibility, military service, rural development, or general flexibility — and which structural features matter most depends entirely on an individual's own eligibility and circumstances.
What this guide is not
This is a general, educational, structural comparison only. It does not rank these loan types, does not recommend any of them, and isn't financial, legal, or real-estate advice. Program rules and figures change over time, so for current eligibility and terms, it's always a good idea to speak with licensed professionals about your specific situation.