A conventional home mortgage is a loan that is not backed by the federal government. This type of loan is categorized into two groups: conforming and non-conforming.

Conforming loans are those that adhere to a specific set of guidelines established by Freddie Mac and Fannie Mae. Borrowers may qualify for a three percent* down payment program with these types of loans.

Non-Conforming loans go by a different set of rules, as they are typically geared for borrowers who do not qualify for conforming loans. An example of this type of mortgage is the jumbo loan. Non-Conforming loans usually have higher interest rates.

* Figures are current at time of publication but are subject to change. Check with your lender for verification.

A Federal Housing Administration (FHA) home mortgage is a loan secured by the federal government. The federal government does not handle these mortgages but insures them. These types of loans are considered easy to qualify for even if buyers have less than stellar credit, come with lower monthly insurance fees, require low down payments (3.5 percent*) and are assumable. Additionally, FHA home loans often offer buyers the opportunity to include their closing costs with the purchase of the home, so everything can be financed together.

* Figures are current at time of publication but are subject to change. Check with your local lender for verification.

Similar to FHA loans, Veterans Affairs (VA) home mortgage loans are also insured by the federal government. But these types of loans are only available to veterans and their families who meet qualifying criteria. VA mortgages offer no-money down programs that generally come with lower closing costs.

United States Department of Agriculture (USDA) Rural Housing Services (RHS) home mortgage loans are guaranteed by this department of the federal government. Borrowers must meet income requirements and seek modest housing in a rural area. Such loans can offer no-money down programs, easier qualifying criteria and lower closing costs.

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