Conventional Loans
Conventional loans are usually a loan secured by or associated with Fannie Mae or Freddie Mac. Generally they consist of any mortgage loan other than an FHA, VA or an RHS loan.
FHA Loans
The Federal Housing Administration (FHA), which is part of the U.S. Dept. of Housing and Urban Development (HUD), administers various mortgage loan programs. FHA loans have lower down payment requirements and, with gifting, often may allow for very little money out of pocket for the borrower. FHA loans cannot exceed the statutory limit.
VA loans
VA loans are guaranteed by U.S. Dept. of Veterans Affairs. The guaranty allows veterans and service persons to obtain home loans with favorable loan terms, usually without a down payment. In addition, it is easier to qualify for a VA loan than a conventional loan. Lenders generally limit the maximum VA loan to $203,000. The U.S. Department of Veterans Affairs does not make loans, it guarantees loans made by lenders. VA determines your eligibility and, if you are qualified, VA will issue you a certificate of eligibility to be used in applying for a VA loan. VA-guaranteed loans are obtained by making application to private lending institutions. A VA certificate of eligibility is not a guarantee of loan approval, but rather proof that you meet the minimum eligibility requirements of the U.S. Dept. of Veterans Affairs.
Interest Only Loans
Interest Only loans are programs that allow the borrower the option of making just the interest payments on the outstanding principal balance. The advantages of such a program would be that the rates are often considerably lower than those of a conventionally amortized loan, allowing for the borrower to qualify for a larger loan than might otherwise be possible.
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