FHA, Conventional& USDA Loans
The three most common loan types — and what nobody tells you about choosing between them.
Quick Comparison
| Conventional | USDA | FHA | |
|---|---|---|---|
| Min. Down Payment | 3% – 5% | 0% | 3.5% |
| Mortgage Insurance | Cancels at 78–80% LTV | Permanent | Permanent |
| Upfront MI Fee | None | Yes (financed) | Yes (financed) |
| Property Eligibility | Most properties | Rural / eligible areas only | Most properties |
| Closing Timeline | ~21–30 days | ~45 days (less with teamwork) | ~21–30 days |
| Seller Perception | Preferred | Neutral | Sometimes hesitant |
| DTI Limits | Flexible (AUS-based) | 29% housing / 41% total | Flexible (AUS-based) |
More flexibilitythan most people realize.
The most common loan type. More seller-friendly. Mortgage insurance that actually goes away.
Conventional loans are often misunderstood. Many buyers think they need 20% down to avoid mortgage insurance, so they drain their savings to hit that number. That’s often the wrong move.
If you have 15% down, conventional mortgage insurance is typically very affordable. Keeping the remaining 5% liquid — for movers, a new fence, repairs, or just a financial cushion — is often smarter than squeezing every dollar into the down payment.
Buyers with stronger credit who want seller-friendly offers, plan to build equity, and prefer a loan where mortgage insurance eventually disappears.
Zero downin eligible areas.
Backed by the U.S. Department of Agriculture. No down payment required in qualifying rural and suburban areas.
USDA loans offer 100% financing in eligible areas — no down payment required. Many communities around cities like Raleigh, Wake Forest, and across North Carolina qualify. If you’re in an eligible area and meet income limits, this is an exceptional option.
USDA loans typically take around 45 days to close — but we can often do better with teamwork. USDA loans go through two rounds of underwriting: your lender reviews the file first, then it’s submitted to the USDA for their own approval. When everyone communicates and stays on top of it, we get it done. Let your seller know upfront so there are no surprises.
Buyers purchasing in USDA-eligible areas who want to preserve cash and meet the income and DTI requirements. Check USDA’s eligibility map for your property address.
Lower bar to entry, but read the fine print.
Backed by the Federal Housing Administration. As low as 3.5% down.
FHA loans are often the right call when your FICO score is lower. If your score is below roughly 680, FHA will typically give you a lower monthly payment than conventional — even though it carries more fees over time. You need to weigh both options. The answer isn’t always obvious.
One protection FHA buyers have that conventional buyers usually don’t: the FHA Amendatory Clause. This addendum means that if the appraisal comes in below the purchase price, you are not required to proceed with the purchase. You can walk away without losing your earnest money. Conventional loans don’t require this protection by default — it has to be negotiated separately.
Buyers with FICO scores below 680, limited down payment funds, or those who want the built-in appraisal protection of the amendatory clause.
Not sure which loan is right for you?
We’ll run the numbers on all three and show you exactly what each one costs — monthly and over the life of the loan.