Nobody teaches you this stuff in school. Here's a straight breakdown of the six loan types Gerald works with — written for real people, not mortgage professionals.
When you buy a home, you borrow money from a lender. But not all mortgage loans are the same — they have different rules about who qualifies, how much you need to put down, and what the lender can charge you. Your loan type determines all of that.
Yes — a lot. The wrong loan type can cost you thousands of dollars in unnecessary fees, require a bigger down payment than you need, or get you denied when you actually qualified. Gerald reviews your specific situation to match you to the right one.
It depends on your credit score, how much you have saved, whether you served in the military, how much the home costs, and whether you plan to live in it. Read through each type below and see which sounds most like your situation.
"The standard mortgage most homebuyers use."
A conventional loan is just a regular mortgage that isn't backed by the government. It's the most common type of home loan in the country. If you've got decent credit and some money saved for a down payment, this is probably what you'll use.
Think of it like renting a car with your own insurance vs. buying the rental company's insurance. The loan is between you and the lender directly — no government guarantee involved.
You're a good fit for a conventional loan if you have a credit score of 620 or higher, have 3–20% saved for a down payment, and have a steady income that's easy to document (like a regular job with pay stubs). It works for first-time buyers and repeat buyers alike.
If your credit score is below 620, or you have a complicated income (self-employed, 1099, multiple jobs), the approval process can be harder. Lenders look at every detail of your finances closely.
"The government's way of helping more people buy homes."
FHA stands for Federal Housing Administration. It's a government agency that insures mortgages — meaning if you stop paying, the government covers the lender's loss. Because lenders have that protection, they're willing to approve people with lower credit scores and smaller down payments.
It's not a loan from the government — you still borrow from a regular bank or lender. The FHA just acts like a co-signer in the background. But that "co-signer" doesn't come free — you pay for it through what's called a Mortgage Insurance Premium, or MIP.
FHA is a great fit if your credit score is between 500–619, you only have 3.5% to put down, or you've had some bumps in your financial history (late payments, a past bankruptcy, etc.). It's especially popular with first-time buyers who haven't had time to build up a large savings account.
You pay mortgage insurance for the entire life of the loan — there's no automatic cancellation like with conventional loans. On a 30-year FHA loan, you're paying that extra monthly fee for 30 years unless you refinance into a conventional loan later. Over time, that adds up to tens of thousands of dollars.
"Earned through service. One of the best mortgage deals available anywhere."
A VA loan is a mortgage benefit available to veterans, active-duty service members, and surviving spouses. The Department of Veterans Affairs guarantees a portion of the loan, which means lenders can offer significantly better terms than any other loan type.
If you served and you're buying a home, the first question is always: have you used your VA benefit? For many veterans, VA is so much better than the alternatives that it's almost always the right choice.
You're eligible if you're an active-duty service member, a veteran who served the required length of service, or the surviving spouse of a veteran. You'll need a Certificate of Eligibility (COE) — Gerald can help you get one as part of the loan process.
There's a one-time VA funding fee at closing — typically between 1.25% and 3.3% of the loan amount, depending on your down payment and whether it's your first time using the benefit. However, veterans with a service-connected disability are exempt from this fee. The fee can also be rolled into the loan so you don't pay it out of pocket.
"For homes that cost more than what regular loans cover."
There's a limit to how much you can borrow with a regular (conforming) mortgage. In most of the country, that limit is $806,500 in 2026. If you need to borrow more than that, you need a jumbo loan.
The name says it all — it's just a bigger loan. But bigger loans mean lenders are taking on more risk, so they have stricter rules about who qualifies. Think of it like the difference between borrowing $5,000 from a friend versus asking them for $100,000 — they're going to want a lot more assurance before they say yes.
Jumbo loans are for buyers purchasing higher-priced homes — typically in more expensive markets like parts of New Jersey. If the home you're looking at costs more than roughly $1 million, or you're borrowing more than $806,500, you're likely in jumbo territory.
The bar is higher to qualify. Lenders typically want to see a credit score of 700 or above, a down payment of at least 10–20%, 12+ months of cash reserves in the bank after closing, and your income to be very clearly documented. If you're self-employed, jumbo loans can be especially tricky — but not impossible with the right preparation.
"Financing for homes you're buying to rent out or flip — not to live in."
When you buy a home you're going to live in, lenders see that as lower risk — people work very hard to keep a roof over their own heads. But when you're buying a property as an investment (to rent out, flip, or hold), lenders know you might walk away from it if things get tough. That means stricter rules and higher rates.
Investment property loans exist specifically for this situation — buying real estate as a business move, not as your primary home.
Anyone buying a property they don't plan to live in as their main residence. This includes buying a rental property, a duplex or multi-family building (if you won't be living there), a short-term rental (like an Airbnb), or a fix-and-flip property.
Investment property loans come with higher rates (typically 0.5–0.75% above a primary residence rate) and stricter requirements — usually 15–25% down, a strong credit score, and reserves in the bank. If you're self-employed or have complex income, this is where a thorough file review is especially important before you make an offer.
"Qualify on what the property earns — not on your personal income."
DSCR stands for Debt Service Coverage Ratio. Instead of looking at your personal income, pay stubs, and tax returns, the lender looks at whether the property's rental income covers its own mortgage payment. If the rent covers the debt, you qualify — regardless of what you report on your taxes.
Think of it like the property applying for the loan instead of you. As long as it can "pay its own bills" through rental income, the lender is satisfied.
DSCR loans are built for real estate investors — especially self-employed investors, those who own multiple properties, or anyone whose tax returns don't reflect their true buying power because of write-offs and deductions. It's also popular with investors who are scaling a rental portfolio and don't want each purchase held up by income documentation.
Rates are typically higher than conventional or investment property loans, and down payment requirements are steeper — usually 20–25%. If the property's projected rent doesn't cover the mortgage payment (a DSCR ratio below 1.0), some lenders will still approve the loan but at a higher rate or larger down payment.
| Loan Type | Min. Credit | Min. Down | Mortgage Insurance | Who It's For |
|---|---|---|---|---|
| Conventional | 620 | 3% | Cancels at 20% equity | Most buyers with good credit |
| FHA | 580 (or 500 w/10% down) | 3.5% | Lasts the life of the loan | Lower credit scores, first-timers |
| VA 🎖️ | No official minimum | $0 | None — ever | Veterans & active military |
| Jumbo | 700+ | 10–20% | Varies by lender | Borrowing above $806,500 |
| Investment Property | 680+ | 15–25% | Varies | Rental & investment buyers |
| DSCR 📊 | 640+ | 20–25% | N/A | Investors qualifying on rental income |
Tell Gerald your situation in 15 minutes and he'll tell you exactly which loan type fits, what you'd qualify for, and what your next step should be. No cost, no obligation.