Government and Conventional Loans
Updated: Apr 1, 2019
When you are ready to obtain a new home mortgage, your new loan will most likely be either a
conventional or government loan to put it simply,if a mortgage is insured by the FHA or the VA
it is a government loan. Almost all other mortgages are considered to be conventional, or jumbo loans.
FHA loans are private loans that are administered and insured by the Federal Housing Administration
(FHA), which is part of the U.S. Dept. of Housing and Urban Development (HUD). While the FHA
administers mortgage loan programs with lower down payment requirements that are easier to qualify for than conventional loans, these FHA loans can't exceed the statutory limit. FHA loans are attractive to
first-time home buyers, those with limited down payments, and lower-income borrowers.
VA loans are also made by private lenders, but they are guaranteed by the U.S. Dept. of Veterans Affairs
(VA). With a guarantee from the VA, veterans and service personnel can obtain a home loan with
favorable terms and usually without a down payment. Even though it's easier to qualify for a VA loan than a conventional one, lenders typically limit the maximum amount. With these loans you will still apply to private lending institutions, but the VA determines your eligibility.
Conventional loans can be either conforming or non-conforming. Mortgages that are conforming typically offer a lower rate than non-conforming mortgages, however they must adhere to the maximum
limits and guidelines. On the other hand, non-conforming, jumbo mortgages are for amounts above the
conforming loan limits. Be sure to check with us to determine if your loan amount falls within your
county’s conforming limit since conforming loan amount limits vary by county.
If you’re looking to make a home purchase or refinance and would like more information about any of
these loans please contact us.