Conventional loans are a prime option for buyers with good credit and down payment funds of 5% or more. They have the least amount of regulations and are usually approved faster than other loan programs. With a Conventional Loan, a buyer can avoid Private Mortgage Insurance (PMI) with a down payment of 20% or more.
Jumbo loans are similar to Conventional loans but are not limited to Conventional loan limits. These loans require good credit, usually at least 10% down, liquid reserves after closing funds are accounted for.
FHA loans are backed by the government and offer home buyers some flexibility. These low-down payment loans are usually ideal for first time buyers. FHA loans are also a good fit for a buyer with less than perfect credit.
USDA Rural Development Loans
The USDA – Rural Development loan is a great program for buyers that are in the low- to moderate-income range. The USDA – Rural Development loan program allows qualified homebuyers to get a loan with minimal closing costs and 0% down payment. The property must be in a qualified USDA – Rural Development area and the buyer must meet the income limit requirements.
Native American Loans
The HUD Section 184 loan program is a great option for Native Americans who are members of a federally recognized tribe. This loan is similar to an FHA loan but has a down payment of only 2.25% and lower upfront and monthly funding fees.