Home loans: buying, FHA, VA and what to expect
Quick Answer
A mortgage is a loan to buy a home, secured by the home itself. The main types are conventional loans, FHA loans insured by HUD and VA loans for eligible service members and veterans. They differ in down payment, mortgage insurance and who can qualify.
Most buyers choose between three kinds of loan.
- Conventional loans aren't backed by a government agency. With less than 20 percent down you'll usually pay private mortgage insurance until you build enough equity.
- FHA loans are made by private lenders and insured by HUD's Federal Housing Administration. They allow a smaller down payment, and mortgage insurance is required.
- VA loans are made by private lenders and partly guaranteed by the Department of Veterans Affairs, for eligible service members, veterans and some surviving spouses.
If you're self-employed and your tax returns don't show what you earn, non-QM loans such as bank statement loans and profit and loss loans use other records to show your income.
Whatever you choose, read your Loan Estimate line by line and ask the lender about anything that isn't clear.
Guides
- What are the requirements for an FHA loan?FHA loan basics from HUD: credit score and down payment rules, mortgage insurance, living in the home, and the 2026 loan limits.
- Buying your first home: what to expect, step by stepA first-time buyer's guide to the mortgage process: the four steps, the Loan Estimate, rate locks, the Closing Disclosure and low down payment options.
- What is a non-QM loan, and who is it for?Non-QM mortgages explained: how they differ from a Qualified Mortgage, and how bank statement and profit and loss loans work for the self-employed.
- How do VA home loans work?VA-backed home loans explained: who is eligible, no down payment in most cases, no PMI, the funding fee and the Certificate of Eligibility.
Run your own numbers with the monthly payment calculator, or see every question we answer about home loans.
Common Questions
Do I need 20 percent down?
No. FHA loans allow as little as 3.5 percent down with a qualifying credit score, many VA loans need no down payment, and some conventional programs allow 3 percent. With a conventional loan and less than 20 percent down, you'll usually pay private mortgage insurance.
Is a Loan Estimate an approval?
No. The CFPB notes that when you receive a Loan Estimate, the lender has not yet approved or denied your application. It's a standard form that shows the loan's estimated rate, monthly payment and closing costs.