Types of Home Loans
The main types of home loans are conventional, FHA, VA, jumbo, non-QM, reverse mortgages (HECM) and specialty loans such as HELOCs. Each fits a different borrower. The right one depends on your down payment, credit, income type, the property and how much you need to borrow.
Key Takeaways
- Conventional is the most common choice for buyers with good credit; FHA suits smaller down payments and flexible credit; VA is for eligible service members, veterans and some surviving spouses.
- Jumbo covers loans above the county limit. For 2026, the conforming ceiling in the highest-cost California counties is $1,249,125.
- Non-QM loans fit self-employed borrowers, investors and recent credit events, usually at a higher cost.
- HECM reverse mortgages are for homeowners 62 and older; HELOCs and similar loans tap existing equity.
What are the main types of home loans?
Conventional loans
Not backed by a government agency, and most follow Fannie Mae or Freddie Mac guidelines. They work for primary homes, second homes and investment properties. Start with Conventional Loans.
FHA loans
Insured by the FHA, with a 3.5% down payment at a 580 score and more flexible credit standards, for primary residences. Mortgage insurance is a larger factor. Start with FHA Loans.
VA loans
Guaranteed by the VA for eligible service members, veterans and some surviving spouses, with no monthly mortgage insurance. Start with VA Loans.
Jumbo loans
For loan amounts above your county conforming limit, common in California. See jumbo loans.
Non-QM loans
For borrowers whose income or credit history does not fit standard rules, such as bank-statement and DSCR loans. See non-QM loans.
Reverse mortgages (HECM)
FHA-insured loans for homeowners 62 and older that convert equity into funds without a required monthly mortgage payment. See reverse mortgages.
Specialty loans
HELOCs, home equity loans, buy-before-you-sell, fix-and-flip and hard money. See specialty loans.
How do they compare side by side?
| Loan type | Typical minimum down payment | Typical minimum credit score | Mortgage insurance | Best for |
|---|---|---|---|---|
| Conventional | 3% on some programs; 5% common | 620 | PMI under 20% down; removable | Good credit, second homes, investors |
| FHA | 3.5% (580+); 10% (500-579) | 580 for 3.5% down | Upfront 1.75% plus annual MIP | Smaller down payment, rebuilding credit |
| VA | Often none required up to the appraised value, with limits | Set by lender, not VA | None monthly; funding fee unless exempt | Eligible service members and veterans |
| Jumbo | Often 10% to 20% | Often 700+ | Typically no standard PMI product | Loans above county limit |
| Non-QM | Often 10% to 25% or more | Varies by program | Varies | Self-employed, investors, credit events |
| HECM | Age 62+; based on home equity | Financial assessment required | Upfront 2% and annual 0.50% | Homeowners 62+ using home equity |
| HELOC / specialty | Based on available equity | Varies | Not applicable | Existing homeowners tapping equity |
These are typical ranges; individual programs vary.
Which loan fits you?
- Good credit and 5% or more to put down: start with conventional. See Is a conventional loan right for you?
- Credit still building or limited savings: look at FHA.
- You or your spouse served: check VA eligibility first.
- Buying above your county limit: compare jumbo with a larger down payment. Use the loan limit lookup.
- Self-employed or investor: consider conventional with documented income, then non-QM.
- Age 62 or older with home equity: learn about HECM.
- Already own and need cash: compare a HELOC, home equity loan or cash-out refinance.
Not sure where you land? See also Buying a Home for the full process.
At Lendia, we compare them for you
At Lendia, we compare options from multiple lenders so you can see the real cost of each loan type for your situation. A Licensed Lendia California Loan Officer can walk you through them. Contact us or get a rate quote now.
Frequently Asked Questions
What is the most common type of mortgage?
Conventional loans are the most common. FHA and VA are the main government-backed alternatives.
Which loan has the lowest down payment?
It depends on eligibility. Some conventional programs allow 3%, FHA allows 3.5% at a 580 score, and VA often does not require a down payment up to the appraised value, with limits.
What is the difference between conforming and jumbo?
A conforming loan is within the county limit and follows Fannie Mae or Freddie Mac rules. A jumbo loan is above it.
Can I switch loan types later?
Yes, through a refinance. Costs apply. See Refinancing a Home.
Are rates the same on every loan type?
No. Rates and terms depend on your situation, and approval requires qualification.
Talk to a Licensed Lendia California Loan Officer
At Lendia, we review your situation and show you the programs you qualify for.