Conventional, FHA, VA, and USDA loan programs
Four program families cover most U.S. home loans. Each has its own rulebook. Lenders can add stricter rules of their own (called overlays), so your lender’s rules may differ from what’s shown here.
| Program | Rulebook | Upfront fee | Ongoing insurance or fee |
|---|---|---|---|
| Conventional | Fannie Mae Selling Guide (Freddie Mac has its own guide) | No single fee set for every loan, as with FHA or VA. Upfront costs may apply depending on the loan: mortgage insurance paid at closing (single or split premium), and Fannie Mae price adjustments (LLPAs) or Freddie Mac credit fees unless capped or waived. Details | Mortgage insurance when the LTV is above 80%, priced by private insurers: paid by the borrower (monthly, at closing, or both) or by the lender |
| FHA | HUD Handbook 4000.1 | 1.75% upfront premium (UFMIP) | Annual MIP by term, loan amount, and LTV |
| VA | VA rules and the VA Lenders Handbook | Funding fee by down payment and use; some veterans are exempt | No monthly mortgage insurance |
| USDA | USDA Handbook HB-1-3555 | 1.00% upfront guarantee fee (FY2027) | 0.35% annual fee (FY2027) |
Full fee tables are on Mortgage insurance explained. To try a program’s costs on your own numbers, use the payment calculator or the mortgage insurance comparison. For what a lender asks for and when, see the documents checklist and the stages of a mortgage.
Conventional loans
Conventional loans that Fannie Mae and Freddie Mac buy must be at or under the conforming loan limit. For 2026 the one-unit baseline limit is $832,750 in most of the country; the high-cost-area ceiling is $1,249,125; Alaska, Hawaii, Guam, and the U.S. Virgin Islands have a $1,249,125 baseline. The limits change every year.
Source: FHFA: “FHFA Announces Conforming Loan Limit Values for 2026” (Nov 25, 2025) · checked Nov 9, 2026Upfront costs on conventional loans
Conventional loans don’t have one upfront fee that every loan pays, the way FHA has its upfront premium and VA has its funding fee. Some upfront costs may still apply, depending on the loan and the choices made, on top of normal closing costs. Your Loan Estimate shows the costs on your own loan.
Mortgage insurance paid at closing
Fannie Mae requires mortgage insurance on a conventional first mortgage with an LTV above 80%, unless the lender provides another form of credit enhancement its charter allows. Its Selling Guide lists four premium plans: monthly (no payment at closing), annual (the first year’s premium at closing, then yearly renewals from escrow), single-premium (one lump sum at closing for coverage over the life of the loan), and split-premium (a payment at closing plus a monthly premium from escrow).Source: Fannie Mae Selling Guide B7-1-01, Provision of Mortgage Insurance (04/02/2025) · checked Nov 10, 2026
The lender can instead buy the coverage and pay for it itself (lender-purchased mortgage insurance).Source: Fannie Mae Selling Guide B7-1-03, Lender-Purchased Mortgage Insurance (05/27/2010) · checked Nov 10, 2026 Single and split premiums paid by the borrower can be added to the loan amount, within limits; lender-paid premiums can’t.Source: Fannie Mae Selling Guide B7-1-04, Financed Borrower-Purchased Mortgage Insurance (12/15/2021) · checked Nov 10, 2026
Freddie Mac also requires mortgage insurance above 80% LTV.Source: Freddie Mac Single-Family Seller/Servicer Guide, Section 4701.1, Mortgage insurance requirements (effective 02/04/2026) · checked Nov 10, 2026 Its eligible premium types include single-premium (“A lump-sum premium paid at closing to purchase life of Mortgage coverage”) and split-premium (“An initial up-front payment premium paid at closing and an ongoing monthly premium paid from accumulated escrow deposits”). Borrower-paid premiums may be paid in a single payment at closing, monthly through escrow, or a combination; lender-paid single, annual, or monthly coverage is allowed; and a borrower-paid premium may be financed under conditions.Source: Freddie Mac Single-Family Seller/Servicer Guide, Section 4701.2, Mortgage insurance premiums (effective 02/04/2026) · checked Nov 10, 2026
Fannie Mae loan-level price adjustments (LLPAs)
Fannie Mae’s LLPA Matrix, effective September 30, 2026, sets price adjustments by features such as credit score, LTV, loan purpose, occupancy, and property type. They add together, and Fannie Mae collects them from the lender when it buys the loan. The matrix doesn’t set how a lender reflects them in the rate or points it offers. For a purchase loan with a term over 15 years and an LTV above 95% (for example, 3% down), the credit-score table alone runs from 0.125% of the loan amount for scores of 780 or higher to 1.750% for scores of 639 or lower; other features can add more.
Waivers: the matrix waives all LLPAs for HomeReady loans; for loans to first-time homebuyers with qualifying income at or below 100% of area median income (AMI), or 120% of AMI in high-cost areas; and for certain Duty to Serve loans at or below 100% of AMI. The exception: LLPAs for the minimum mortgage insurance coverage option are still charged when that option is used. The matrix also lists LLPA credits, including $500 for HomeReady loans where the borrower received housing counseling, and $2,500 for HomeReady purchase loans to very low-income borrowers (at or below 50% of AMI) where at least one borrower is a first-time homebuyer, for whole loans Fannie Mae buys through Feb. 28, 2027, and MBS issued through Feb. 1, 2027.Source: Fannie Mae Loan-Level Price Adjustment (LLPA) Matrix (effective Sep 30, 2026) · checked Nov 10, 2026
HomeReady
Fannie Mae’s HomeReady product matrix says LLPAs are waived for all HomeReady loans. Its pricing section lists that waiver and the lender’s base guaranty fee under its MBS contract; it lists no HomeReady fee for the borrower. Mortgage insurance still applies above 80% LTV: standard coverage is 25% for LTVs from 90.01% to 97%, and the premium may be financed. Choosing the minimum coverage option adds an LLPA that the HomeReady waiver doesn’t cover.Source: Fannie Mae HomeReady Mortgage Product Matrix (2026); Fannie Mae Selling Guide B7-1-02, Mortgage Insurance Coverage Requirements (08/07/2019) · checked Nov 10, 2026
Freddie Mac credit fees
Freddie Mac’s Exhibit 19, Credit Fees (effective 11/04/2026, Bulletin 2026-15), sets credit fees that can apply to Freddie Mac loans, and they add together. Its Credit Fee Caps table sets credit fees to 0.000% at all eligible LTVs for Duty to Serve loans at or below 100% of AMI; First Time Homebuyer loans at or below 100% of AMI (120% in high-cost areas); and Home Possible loans at or below 80% of AMI. Who is eligible is set in Exhibit 19A. Two fees are added on top of the cap: the custom mortgage insurance credit fee and the GreenCHOICE fee.Source: Freddie Mac Single-Family Seller/Servicer Guide, Exhibit 19, Credit Fees (effective 11/04/2026, Bulletin 2026-15) · checked Nov 10, 2026
FHA loans
FHA loans are insured by the Federal Housing Administration under HUD Handbook 4000.1. Most are scored through FHA’s TOTAL Mortgage Scorecard; a file that gets a “Refer” must be manually underwritten, and manual files use the ratio tiers on DTI and LTV explained.
Source: HUD Handbook 4000.1, II.A.4 (TOTAL Mortgage Scorecard) · checked Nov 9, 2026VA loans
VA-backed loans carry a one-time funding fee instead of monthly mortgage insurance. Veterans receiving VA compensation for a service-connected disability (or eligible for it), surviving spouses receiving Dependency and Indemnity Compensation, service members with a proposed or memorandum disability rating before closing, and active-duty Purple Heart recipients are exempt. If compensation is later awarded retroactive to before closing, the fee can be refunded. On a purchase, the funding fee is the only closing cost that can be added to the loan.
Source: VA: “VA funding fee and loan closing costs” (page updated Oct 5, 2026) · checked Nov 10, 2026VA states that a veteran with full entitlement has no VA loan limit (the lender and appraisal still limit the amount). With partial entitlement, VA’s formula uses the county conforming limit.
Source: VA: “VA home loan limits” (page updated Aug 12, 2025) · checked Nov 9, 2026USDA loans
USDA’s Single Family Housing Guaranteed Loan Program has household-income limits and property-location rules. USDA’s official eligibility site checks both.Source: USDA Handbook HB-1-3555, Chapter 9 (rev 08-05-25), sections 9.2, 9.3, 9.7; USDA Income and Property Eligibility site · checked Nov 9, 2026
USDA uses two different income figures. Annual (household) income counts all adult household members, even ones not on the loan, and is tested against the income limit. Repayment income counts only the people on the note and is used for the debt ratios.
Source: USDA Handbook HB-1-3555, Chapter 9 (rev 08-05-25), sections 9.2, 9.3, 9.7 · checked Nov 9, 2026Seller and builder contributions
Each program limits how much the seller, builder, or other interested party can pay toward the buyer’s costs.
| Program | Published limit | Source |
|---|---|---|
| FHA | 6% of the sales price. Contributions above 6%, or above actual costs, are treated as an inducement to purchase and reduce the price used for the loan. | Source: HUD Handbook 4000.1, II.A.4 (interested party contributions) · checked Nov 10, 2026 |
| VA | Seller concessions up to 4% of the reasonable value; normal closing costs paid by the seller aren’t counted in that cap. | Source: VA: “VA funding fee and loan closing costs” (page updated Oct 5, 2026) · checked Nov 10, 2026 |
| Fannie Mae | 3% when LTV is over 90%; 6% for 75.01–90%; 9% at 75% or less; 2% on investment properties. | Source: Fannie Mae Selling Guide B3-4.1-02, Interested Party Contributions (IPCs) (05/07/2025) · checked Nov 10, 2026 |
| USDA | 6% of the sales price. Lender-paid costs through premium pricing, and seller funds for repairs or for the buyer’s real estate commission, don’t count toward the limit. | Source: USDA Handbook HB-1-3555, Chapter 6 (rev 05-05-25), paragraph 6.2 C, Interested Party Concessions · checked Nov 9, 2026 |
Minimum down payment and credit scores
These are the program minimums as published. Lenders can require more (overlays), and meeting a minimum doesn’t mean a loan will be approved. Scores here are the program’s own definitions, such as FHA’s Minimum Decision Credit Score.
| Program | Minimum down payment | Credit score | Source |
|---|---|---|---|
| Conventional: Fannie Mae | 3% (97% maximum LTV) for a fixed-rate loan underwritten through Desktop Underwriter (DU). Above 95% LTV, at least one borrower must be a first-time home buyer unless the loan is HomeReady or has a Community Seconds, and high-balance loans aren’t eligible. ARMs: 5% (95% LTV). Manually underwritten loans: 5% (95% LTV). | DU loans: no minimum credit score; DU assesses credit risk. Manually underwritten loans: 620 for fixed-rate and 640 for ARMs, with higher scores required at higher LTV and DTI in the Eligibility Matrix. | Source: Fannie Mae Eligibility Matrix (August 5, 2026), Standard Eligibility Requirements and Note (1); Fannie Mae Selling Guide B3-5.1-01, General Requirements for Credit Scores (11/04/2026) · checked Nov 9, 2026 |
| Conventional: Freddie Mac | Standard loans: 5% (95% maximum LTV) for a fixed-rate or ARM purchase of a one-unit primary residence, whether Loan Product Advisor returns Accept or the loan is manually underwritten. HomeOne: “the maximum LTV/TLTV/HTLTV ratio is 97%” (3% down); the loan must be fixed-rate, an Accept Mortgage, and a one-unit primary residence, and for purchases “at least one Borrower must be a First-Time Homebuyer.” Home Possible: 97% maximum LTV for one-unit fixed-rate loans and 95% for one-unit ARMs. | Loan Product Advisor Accept: “A minimum Indicator Score is not required for Accept Mortgages because Loan Product Advisor has made the determination that the Borrower’s credit reputation and the Mortgage product are acceptable.” Manually underwritten purchase, primary residence: 620 at LTV 75% or less and 660 above 75%. Borrowers without usable credit scores may be manually underwritten without scores (not for super conforming loans). Exhibit 25’s separate Home Possible table lists 660 for a manually underwritten one-unit fixed-rate purchase. | Source: Freddie Mac Single-Family Seller/Servicer Guide, Section 4203.1, LTV/TLTV/HTLTV ratio requirements (effective 10/07/2026) · checked Nov 10, 2026; Freddie Mac Single-Family Seller/Servicer Guide, Section 4605.1, HomeOne Mortgage requirements (effective 11/09/2026) · checked Nov 9, 2026; Freddie Mac Single-Family Seller/Servicer Guide, Section 4501.7, Home Possible LTV/TLTV/HTLTV ratio requirements (effective 08/03/2026) · checked Nov 9, 2026; Freddie Mac Single-Family Seller/Servicer Guide, Section 5203.2(d)(i), Indicator Score for Accept Mortgages (effective 11/04/2026) · checked Nov 9, 2026; Freddie Mac Single-Family Seller/Servicer Guide, Section 5202.1 and Exhibit 25, Mortgages with Risk Class and/or Minimum Indicator Score Requirements (Rev. 10/07/26, effective 11/09/26) · checked Nov 9, 2026; Freddie Mac Single-Family Seller/Servicer Guide, Section 4501.5, Home Possible credit requirements (effective 11/04/2026) · checked Nov 9, 2026 |
| FHA | A Minimum Required Investment of at least 3.5% of the Adjusted Value (96.5% maximum LTV) with a score of 580 or higher. With a score from 500 to 579, the maximum LTV is 90% (10% down). | Below 500: not eligible for FHA-insured financing. Borrowers with non-traditional or insufficient credit can get maximum financing but must be manually underwritten. | Source: HUD Handbook 4000.1, II.A.1.b.ii(A)(3) Borrower Minimum Decision Credit Score; II.A.2.a.iv Calculating Maximum Mortgage Amounts on Purchases; II.A.2.b.i–ii Loan-to-Value Limits (last revised 8/12/2026) · checked Nov 9, 2026 |
| VA | No down payment as long as the sales price isn’t higher than the home’s appraised value. Entitlement affects how much can be borrowed with no down payment; see VA loans above. | “VA does not have a minimum credit score requirement.” Lenders may still set their own. | Source: VA: “VA-backed purchase loan” (page last updated Jan 7, 2026) · checked Nov 10, 2026; VA Pamphlet 26-7 (VA Lenders Handbook), Chapter 4, Topic 7.b How to Analyze Credit (KnowVA article 554400000330850, updated Aug 26, 2026) · checked Nov 9, 2026 |
| USDA | No minimum down payment is set. The loan can be up to the lesser of the appraised market value plus the upfront guarantee fee, or the purchase price plus eligible acquisition costs. A newly built home that can’t meet USDA’s inspection and warranty requirements is limited to 90% of market value. | The handbook sets no minimum score. The Guaranteed Underwriting System (GUS) determines the acceptable score for its recommendation; manually underwritten files need a validated score. “Lenders may impose additional criteria/overlays at their discretion.” | Source: 7 CFR 3555.103, Maximum loan amount (eCFR, current); USDA Handbook HB-1-3555, Chapter 10 (rev 08-05-25), paragraph 10.1 and Attachment 10-A (Credit Scores and Validation) · checked Nov 9, 2026 |
Guidelines change; confirm with a licensed lender.