🏘️ Understanding Different Types of Loans We Offer

Finding the Right Program for Your Situation

We offer a full range of residential lending programs — from standard FHA and Conventional loans to specialized Non-QM options for self-employed borrowers and investors. As a broker, I'm not limited to one lender's box; I match you to the program that actually fits your scenario.

💡 Pro Tip: Not sure which loan fits you? That's exactly what a broker is for — let's talk through your scenario instead of guessing from a list.

Samuel Mudd | NMLS #2569470 | The One Brokerage | Equal Housing Lender. Licensing information available at nmlsconsumeraccess.org.

FHA Loans are mortgages insured by the Federal Housing Administration. They're designed for low-to-moderate-income borrowers who may have lower credit scores and smaller down payments.

• Lower credit score requirements

• Lower down payment options (as low as 3.5%)

• Flexible qualification guidelines

• Mandatory mortgage insurance premiums (MIP)

• Loan limits vary by region

• Potentially higher overall loan costs

• Minimum credit score of 580 for 3.5% down (some lenders allow 500–579 with 10% down)

• Steady employment history

• Debt-to-income ratio under 43% (higher may be allowed with compensating factors)

Conventional Loans are mortgages not insured or guaranteed by the federal government. They conform to guidelines set by Fannie Mae and Freddie Mac and are one of the most common types of home financing. Ideal for borrowers with good credit and stable income.

• Competitive interest rates

• Flexible loan term options (10, 15, 20, or 30 years)

• Can avoid mortgage insurance with 20% down

• Widely accepted for a variety of property types

• Higher credit and income standards

• Requires larger down payment (typically at least 5%, though some first-time buyer programs allow 3%)

• Private Mortgage Insurance (PMI) required if down payment is less than 20%

• Minimum credit score of 620 (higher scores improve pricing)

• Stable income and employment history

• Debt-to-income ratio generally under 45%, though up to 50% is possible with strong compensating factors

• Down payment as low as 3% for certain first-time buyer programs

VA Loans are mortgages guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans, active-duty service members, and certain National Guard and Reserve members.

• No down payment required

• No private mortgage insurance (PMI)

• Competitive interest rates

• Only available to eligible veterans and service members

• Funding fee required (can be financed into the loan, though it's waived for many disabled veterans)

• Property must meet VA minimum property requirements

• Certificate of Eligibility (COE)

• Satisfactory credit score

• Sufficient income to cover loan payments

USDA Loans are mortgages backed by the U.S. Department of Agriculture for buyers in eligible rural and suburban areas, with low interest rates and no down payment required.

• No down payment required

• Low interest rates

• Flexible credit guidelines

• Property must be in a USDA-eligible area

• Household income limits apply (includes all household members, not just borrowers on the loan)

• Guarantee fee required (upfront and annual)

• Credit score of 640 or higher is a common lender overlay (USDA itself has no hard minimum)

• Stable income and employment

• Property must be in a USDA-eligible area and household income under the local limit

Jumbo Loans exceed the conforming loan limits set by the Federal Housing Finance Agency. They're used to finance luxury homes and properties in high-cost areas.

• Finance higher-priced properties in one loan

• Flexible terms and options

• Stricter qualification requirements

• Larger down payment typically required

• Guidelines vary widely by lender — there's no agency standard

• Strong credit score, typically 700 or higher

• Significant income, assets, and cash reserves

• Debt-to-income ratio varies significantly by lender — confirm current requirements for your scenario

203(k) Loans are FHA loans that let you finance the purchase and renovation of a home in a single loan. There are two versions: Limited 203(k) for cosmetic or minor repairs (capped renovation budget, no consultant required), and Standard 203(k) for larger structural work (requires a HUD consultant to oversee the project).

• Finance purchase and renovation in one loan

• Low down payment options

• Covers a wide range of repairs, from cosmetic to structural

• More paperwork and complexity than a standard FHA loan

• Strict guidelines on eligible repairs and contractors

• Slightly higher rates compared to standard FHA loans

• Minimum credit score of 580

• Detailed renovation plan and contractor cost estimates

• Property must meet FHA standards after renovation

A Home Equity Conversion Mortgage (HECM) — the most common type of reverse mortgage — is available to homeowners aged 62 and older, letting them convert home equity into cash. The loan is repaid when the borrower sells the home, moves out, or passes away. Federal law requires HUD-approved reverse mortgage counseling before you can apply.

• Supplemental income for retirees

• No monthly mortgage payments required

• Borrower retains home ownership

• Loan balance increases over time

• Fees and interest can be higher than a traditional mortgage

• Reduces the equity passed to heirs

• Homeowner must be 62 years or older

• Home must be the primary residence

• Must have significant equity in the home

• Completion of HUD-approved counseling

"Non-QM" (non-qualified mortgage) simply means the loan doesn't fit inside Fannie Mae or Freddie Mac's standard underwriting box. These programs exist for borrowers with real, provable ability to repay whose income just doesn't show up on a W-2 — self-employed borrowers, investors, retirees, and foreign nationals. As a broker, I offer the full range below rather than just one.

Debt Service Coverage Ratio (DSCR) loans are for non-owner-occupied investment properties only. Qualification is based on the cash flow the property generates rather than the borrower's personal income.

• Qualify off the property's rental income, not personal income

• Easier approval path for investors who don't meet traditional income documentation standards

• Scales well for investors growing a rental portfolio

• Flexible terms, including interest-only options

• Property must generate sufficient cash flow to cover the loan payment

• Not available for primary residences

• Larger down payment typically required

• DSCR of 1.25 or higher is often preferred (some programs allow lower with trade-offs)

• Suitable for residential, multi-family, and commercial income-producing property

• Down payment typically 20–25%

• Credit score of 620+ is often required for the best terms

Bank Statement Loans let self-employed borrowers qualify using 12–24 months of personal or business bank statements instead of tax returns — useful when tax write-offs make reported income look lower than actual cash flow.

• No tax returns required to qualify

• Reflects real cash flow rather than taxable income

• Built for self-employed and business-owner borrowers

• Higher interest rates than conventional loans

• Larger down payment typically required

• More statements to gather and underwrite

• Typically 2+ years of self-employment

• Credit score of 620+ common

• Down payment typically 10–20%+

Asset Depletion Loans qualify borrowers using liquid assets — retirement accounts, investments, savings — divided over a set term to calculate a qualifying income, instead of employment income. Useful for retirees or high-net-worth borrowers with substantial assets but limited traditional income.

• No employment income required to qualify

• Well suited to retirees and high-net-worth borrowers

• Can unlock larger loan amounts based on asset strength

• Requires substantial verifiable liquid assets

• Calculation method varies by lender

• Typically higher rates than conventional loans

• Significant liquid, verifiable assets

• Credit score and down payment requirements vary by lender

These programs serve borrowers without a Social Security number — using an Individual Taxpayer Identification Number (ITIN) — or foreign nationals purchasing U.S. property without U.S. credit history.

• Opens financing to borrowers ineligible for traditional loans

• Flexible, alternative credit and income documentation accepted

• Larger down payments typically required (often 20–30%+)

• Higher interest rates

• Fewer lenders offer these programs, so terms vary widely

• Valid ITIN or foreign national documentation

• Alternative credit and income verification (may include foreign credit references)

• Down payment typically 20–30%+

Not Sure Which Loan Fits You? Schedule a quick consultation — we'll walk through your scenario and match you to the right program, whether that's a standard FHA loan or a specialized Non-QM option. 

Samuel Mudd | NMLS #2569470 | The One Brokerage | Equal Housing Lender

Loan program guidelines vary by investor and are subject to change. This overview is for general educational purposes and does not guarantee eligibility or approval for any specific program.