Loan Programs Explained — HomeLoanSammy.com
Loan Programs Explained

Find the Loan That Fits Your Life

Every loan program is built differently. Here's what you need to know before you choose the one that fits your life.

Explore Programs ↓

Compare Every Program

Each program has unique requirements — and unique advantages. Use this as your starting guide.

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FHA Loan

Federal Housing Administration

Government-backed · HUD insured
Min. Credit Score
580
500 w/ 10% down
Min. Down Payment
3.5%
With 580+ credit
Perks
Low credit thresholdLow down paymentGift funds allowedCompetitive ratesFixer-upper eligible
Watch Out For
Mortgage insurance requiredMIP for life of loan (<10% down)Loan limits applyProperty must meet HUD standards
Best for: First-time buyers with limited savings or credit history building toward homeownership.
🎖️
VA Loan

Veterans Affairs

Military benefit · No PMI ever
Min. Credit Score
620
Lender discretion
Min. Down Payment
0%
No down required!
Perks
Zero down paymentNo PMI everLower rates than conventionalFlexible credit guidelinesNo prepayment penaltyReusable benefit
Watch Out For
Funding fee (1.25–3.3%)Primary residence onlyRequires VA eligibilityVA appraisal required
Best for: Active duty, veterans, and surviving spouses — arguably the most powerful home loan benefit available.
📋
Conventional

Fannie Mae / Freddie Mac

Conforming · Most common loan type
Min. Credit Score
620
Better rates at 740+
Min. Down Payment
3%
5% avoids some fees
Perks
PMI removable at 20% equityPrimary, 2nd home & investmentFlexible loan amountsFewer property restrictionsGreat rates with good credit
Watch Out For
Stricter credit requirementsPMI if <20% downHigher rates with lower creditConforming loan limits
Best for: Buyers with solid credit (680+) who want flexibility on property type or plan to put 20% down.
🌾
USDA Loan

Rural Development

Government-backed · Rural & suburban
Min. Credit Score
640
Manual underwrite below
Min. Down Payment
0%
100% financing!
Perks
Zero down paymentBelow-market interest ratesLow monthly guarantee feeClosing costs can be rolled in
Watch Out For
Eligible areas onlyHousehold income limitsPrimary residence only1% upfront guarantee fee
Best for: Moderate-income buyers purchasing in eligible suburban or rural areas who want zero-down financing.
🏛️
Jumbo Loan

High-Balance / Non-Conforming

Above conforming limits · Portfolio lender
Min. Credit Score
700
720+ preferred
Min. Down Payment
10%
20% typical
Perks
Finance luxury propertiesLoan amounts $800K–$3M+Competitive rates for top profilesFixed & ARM options
Watch Out For
Strict qualifying standardsLarge cash reserves requiredFull income documentationTougher appraisal scrutiny
Best for: High-income buyers purchasing above the conforming loan limit in competitive or high-cost markets.
📊
DSCR Loan

Debt Service Coverage Ratio

Investor loan · No personal income required
Min. Credit Score
620
680+ for best terms
Min. Down Payment
20%
25% common
Perks
No personal income verificationQualify based on rental incomeUnlimited investment propertiesLLC / entity vesting allowedShort-term rental eligibleFast closings
Watch Out For
Higher interest ratesLarger down payment requiredDSCR ratio must be ≥1.0–1.25Investment properties onlyPrepayment penalty common
Best for: Real estate investors who want to qualify based on a property's rental income rather than personal tax returns or W-2s.
Refinance Programs

Already Own a Home?

Refinancing can lower your rate, reduce your payment, or unlock equity you've already built. Here are your options.

📉
Rate & Term Refi

Rate & Term Refinance

Lower your rate or adjust your loan term
Min. Credit Score
620
740+ for best rates
Min. Equity
5%
20% avoids PMI
Perks
Lower monthly paymentReduce total interest paidSwitch ARM to fixed rateShorten loan termRemove PMI sooner
Watch Out For
Closing costs (2–5%)Restarts loan clockBreak-even period appliesFull qualification required
Best for: Homeowners who bought at a higher rate and want to lower their payment or pay off their home faster.
💰
Cash-Out Refi

Cash-Out Refinance

Tap your equity and replace your mortgage
Min. Credit Score
620
680+ recommended
Max. LTV
80%
Must retain 20% equity
Perks
Access built-up equityFund home improvementsConsolidate high-interest debtLower rate than HELOCSingle monthly payment
Watch Out For
Higher loan balancePotentially higher rateMust keep 20% equityClosing costs applyFull appraisal required
Best for: Homeowners with significant equity who want to fund renovations, pay off debt, or cover major expenses at a lower interest rate.
⚡
FHA Streamline

FHA Streamline Refinance

Fast refi for existing FHA loan holders
Min. Credit Score
580
Lender may vary
Appraisal
None
Usually not required
Perks
Minimal documentationNo appraisal requiredNo income verificationFast closing timelineLower MIP possible
Watch Out For
Must have existing FHA loanMust show payment benefitMIP still requiredNo cash-out allowed
Best for: Current FHA borrowers who want to lower their rate or payment quickly with minimal paperwork and no appraisal hassle.
🎖️
VA IRRRL

VA Interest Rate Reduction

VA streamline refi for veterans
Min. Credit Score
580
Lender discretion
Appraisal
None
Typically waived
Perks
No appraisal requiredNo income verificationNo PMI everLow funding fee (0.5%)Extremely fast process
Watch Out For
Must have existing VA loanMust reduce rate or paymentNo cash-out allowedOccupancy rules apply
Best for: Veterans with an existing VA loan who want to take advantage of lower rates with almost zero hassle or paperwork.

Side-by-Side Quick Reference

ProgramMin. CreditDown PaymentMortgage InsuranceProperty TypesBest For
FHA580 (500 w/ 10%)3.5%MIP — often life of loanPrimary onlyLow credit / low savings
VA620 (lender)0%None — everPrimary onlyVeterans & active duty
Conventional6203–20%PMI removable at 20%Primary, 2nd, investmentGood credit, flexibility
USDA6400%Annual guarantee fee (0.35%)Eligible rural/suburbanRural buyers, low income
Jumbo700–720+10–20%Varies by lenderPrimary & 2nd homesHigh-price markets
DSCR620 (680+ ideal)20–25%None typicallyInvestment onlyReal estate investors

Not Sure Which Program Is Right?

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