Loan Comparison - Conventional, Jumbo, FHA, VA, USDA
| FHA Loan | VA Loans | Conventional Loans | Jumbo Loans | USDA Loans | |
|---|---|---|---|---|---|
| Credit History | Credit scores as low as 580 may qualify. Accepts borrowers 2 years out of bankruptcy and 3 years out of foreclosure | No set credit scores to qualify, forgiving of credit problems | High credit scores needed to qualify | Extremely high credit scores of 700 or higher required | Credit can be less than perfect, borrowers with non-traditional credit may also qualify |
| Borrowing Limit against Home Value | Can borrow up to 96.5% of home’s value | Can borrow up to 100% of home’s value | Can borrow up to 97% of home’s value | Can borrow 70% to 80% of home’s value | Can borrow up to 100% of a home’s value |
| Income / Debt-to-Income Ratio (DTI) | Accepts higher DTI ratios, depending on borrower circumstances | Accepts higher DTI ratios, depending on circumstances | Lower DTI required (No exceptions) | Both debt and income are carefully scrutinized. Extremely low DTI required | DTI requirements are similar to FHA. Income limits of 115% of the area’s median income apply |
| Loan Limits | Loan Limits | There are technically no limits to VA loans. There are only limits to how much the VA will guarantee. The VA will guarantee up to 25% of the loan amount for lenders in the event that you default on your loan. If you have full entitlement, you don’t have a home loan limit. | Loan Limits | There is no loan limit, but loans must exceed the established maximum for conventional loans in your area | For USDA direct loans, borrowers are subject to area loan limits. USDA guaranteed loans do not have a maximum loan limit, but the income and debt ratio caps will limit how much you can qualify for. |
| Mortgage Insurance | Mortgage Insurance Rates | Mortgage Insurance Rates | Mortgage Insurance Rates | Mortgage insurance is Not required | (USDA) direct loans have No mortgage insurance. USDA guaranteed loans are charged an annual guarantee fee instead of mortgage insurance. Guarantee fees are paid to USDA by the approved lender and are usually included in the homeowner's monthly loan payment. |
| Product Availability | Limited primarily to banks due to low fixed fees, but some Mortgage Brokers may also offer them. | Typically offered by any institution that will make an FHA loan. Mortgage Brokers included. | Widely available from a variety of lenders | Loans have limited availability and terms differ greatly between lenders | Loans have limited availability, but many banks can underwrite them |
| Other Eligibility Requirements | N/A | Limited to active-duty soldiers who have served at least 90 continuous days, retired soldiers who served 90 continuous days during wartime or up to 24 months during peace and National Guard and Reserves Members serving 90 days of active service or 6 years otherwise. Soldiers cannot have been dishonorably discharged. Spouses of soldiers are eligible under certain conditions. | N/A | N/A | Limited to qualified properties in eligible rural areas. Properties must be modest in size, design, and cost, as well as being on a permanent foundation (mobile homes are allowed provided they are properly mounted) and conform to the Housing and Community Facilities Program Thermal and Site Standards. Eligible rural areas are subject to change as frequently as once each year. |
Notes:
1) Conforming and High Balance Loan Limits are based on: Los Angeles County; 1-Unit (Single Family Residence) and are subject to change without notice.
2) Fico scores; mortgage insurance; and VA funding fee requirements are subject to change without notice.
