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    Mortgage Options

    Mortgage Options for Home Buyers

         Whether you're buying your first home or your next home, we'll help you explore mortgage options 

    based on your income, credit, down payment, property, and financial goals.

    Get Pre-Qualified

    Conventional Loans

    Conventional loans are one of the most widely used mortgage options for home buyers. Unlike FHA loans, they are not insured by a government agency. They offer flexible financing options for qualified borrowers and can be used for primary residences, second homes, and investment properties.

    Conventional financing may be a good choice for borrowers with established credit and stable qualifying income, including both wage earners and self-employed borrowers who meet program guidelines.

    Key Benefits

    • Down payments as low as 3% may be available through eligible Conventional programs.
    • 5% down options are widely available for eligible home buyers who may not qualify for a 3% down program.
    • No upfront mortgage insurance premium like FHA.
    • PMI may be removed when applicable requirements are satisfied.
    • Borrowers with stronger credit and larger down payments may receive more favorable pricing, subject to market conditions and qualification.
    • Available for primary residences, second homes, and investment properties, subject to program requirements.
    • Fixed-rate and adjustable-rate mortgage (ARM) options may be available.
    • Gift funds may be permitted for eligible transactions, subject to program guidelines.
    • Various loan terms may be available, including commonly used 15-year and 30-year fixed-rate mortgages.
    • Conventional financing can be used for purchase and refinance transactions.

    Conventional vs. FHA

    One of the major differences is mortgage insurance. FHA loans generally require both an upfront mortgage insurance premium (UFMIP) and annual mortgage insurance premiums. Conventional loans do not have an FHA-style upfront mortgage insurance premium, and PMI may eventually be removed when applicable requirements are met.

    Who May Benefit From a Conventional Loan?

    Conventional financing may be worth considering if you have good credit, stable qualifying income, sufficient funds for the down payment and closing costs, and want more flexibility regarding mortgage insurance or property type.

    Don't have 20% down?
    You may still qualify. Depending on the program and your qualifications, Conventional financing may be available with as little as 3%–5% down.

    Loan approval, down-payment requirements, rates, mortgage insurance, and program eligibility depend on borrower qualifications, property type, occupancy, and applicable program guidelines.

    FHA Loans

    An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). FHA financing is popular with home buyers because it can offer lower down-payment requirements and more flexible credit and qualification guidelines than many traditional mortgage programs.

    FHA loans aren't only for first-time buyers. First-time and repeat home buyers may qualify as long as the property will generally be used as their primary residence and FHA requirements are met.

    Key Benefits of FHA Loans

    • Down payment as low as 3.5% for eligible borrowers

    • Lower credit scores may be accepted compared with many Conventional loan programs

    • More flexible credit guidelines, depending on the borrower's overall financial profile

    • Higher debt-to-income ratios may be possible based on overall qualifications and underwriting

    • Gift funds may be allowed toward eligible down payment and closing costs

    • Available to first-time and repeat home buyers

    • Eligible 1–4 unit primary residences may qualify

    • Fixed-rate and adjustable-rate options may be available

    • FHA loans may be assumable by a qualified future buyer, which could potentially be valuable when selling the home

    • Borrowers may be able to qualify even when their credit history or financial profile doesn't fit certain Conventional loan requirements

    Buying a Multi-Family Home

    FHA financing may be available for eligible 2–4 unit properties when the borrower occupies one of the units as a primary residence. This can be attractive to buyers who want to live in one unit while receiving rental income from the other unit or units.

    Subject to FHA guidelines, eligible rental income may also help with qualification.

    FHA vs. Conventional

    FHA financing can be particularly useful for borrowers with a smaller down payment, lower credit score, or higher debt-to-income ratio who may have difficulty qualifying for certain Conventional programs.

    However, FHA loans require mortgage insurance. FHA borrowers generally pay an upfront mortgage insurance premium (UFMIP) as well as an annual mortgage insurance premium (MIP) collected as part of the monthly mortgage payment.

    Unlike Conventional PMI, FHA mortgage insurance may not automatically disappear simply because the homeowner builds sufficient equity. How long MIP remains depends on the loan's terms and FHA requirements.

    Who May Benefit From an FHA Loan?

    An FHA loan may be worth considering if you:

    • Have a lower credit score

    • Have limited funds available for a down payment

    • Want to purchase with as little as 3.5% down, if eligible

    • Need more flexible qualification guidelines

    • Plan to use eligible gift funds

    • Want to purchase an eligible 2–4 unit property and occupy one unit

    • Don't currently qualify for the Conventional financing option you want

    Important: FHA loans are generally for primary residences, not second homes or investment-only properties. FHA mortgage insurance, property standards, loan limits, occupancy requirements, lender requirements, and other eligibility guidelines apply.

    Not sure whether FHA or Conventional is better for you?
    Getting pre-qualified can help you compare the available options based on your credit, income, debts, down payment, and property goals.

    Non-QM Loans

    Non-QM (Non-Qualified Mortgage) loans provide alternative financing for borrowers who may not meet traditional Conventional or FHA guidelines.

    Advantages of Non-QM Loans

    • Traditional tax returns may not be required when qualifying under an eligible alternative-documentation program
    • W-2s and paystubs may not be required depending on the Non-QM program and qualification method
    • Bank Statement programs may allow eligible borrowers to qualify using bank deposits
    • Profit & Loss (P&L) programs may be available for eligible self-employed borrowers
    • Flexible options for self-employed borrowers and business owners
    • Alternative qualification methods are available for borrowers whose traditional documents may not accurately reflect their financial situation

    Things to Consider

    • Usually requires a higher down payment
    • Stronger credit may be needed for more favorable terms
    • Rates and fees are generally higher than Conventional financing
    • Requirements vary by lender and loan program

    Important: Non-QM does not mean no documentation or no qualification. Tax returns, W-2s, and paystubs may not be required when the borrower qualifies under the applicable Non-QM guidelines using an approved alternative documentation method.

    Low Down Payment Options

    You may not need a 20% down payment to buy a home. Depending on your qualifications, several mortgage programs can allow you to purchase with a much smaller down payment.

    3% Down — HomeReady® / Home Possible®

    • Eligible borrowers may be able to purchase a one-unit primary residence with as little as 3% down
    • Income limits and other eligibility requirements apply
    • Designed to help qualified low- and moderate-income borrowers
    • Gift funds may be permitted, subject to program requirements
    • Mortgage insurance is generally required at higher loan-to-value ratios

    5% Down — Conventional

    • If you don't qualify for a 3%-down program such as HomeReady® or Home Possible®, a 5% down Conventional loan may be another option
    • Available to eligible first-time and repeat home buyers
    • Private mortgage insurance (PMI) is generally required with less than 20% down
    • PMI may eventually be removed when applicable requirements are met

    3.5% Down — FHA

    • Eligible borrowers may purchase with as little as 3.5% down
    • FHA can be particularly helpful for borrowers with lower credit scores or more challenging credit profiles
    • More flexible qualification guidelines may be available compared with many Conventional programs
    • Gift funds may be permitted under FHA guidelines
    • FHA mortgage insurance is required

    The important part

    You don't necessarily need 10%, 15%, or 20% down to become a homeowner. Depending on your income, credit, debts, available funds, property, and other qualifications, you may be able to purchase a home with as little as 3%–5% down.

    Get Pre-Qualified to find out which low-down-payment option may fit your situation.

    Program availability, eligibility, mortgage insurance, income limits, property requirements, and underwriting guidelines apply.

    Get Pre-Qualified