FHA loans require as little as 3.5% down. VA and USDA loans may require no down payment at all for qualifying borrowers. For buyers without a large amount of cash saved, these programs can be the difference between renting and owning.
Government-backed loans generally allow lower credit scores and higher debt-to-income ratios than conventional mortgage loans. Borrowers who don't yet qualify for conventional financing may still qualify for one of these programs.
Down payment funds from family members, employers, or qualifying charitable organizations are typically permitted on FHA and USDA loans, making it easier to pull together your upfront costs.
Because the government reduces lender risk through insurance or guarantee, borrowers often benefit from interest rates that are competitive with or better than conventional loan products.
Ways to use your loan
FHA mortgage loans are designed to help borrowers with moderate credit or limited savings achieve homeownership.
Who it’s for: First-time buyers, borrowers with lower credit scores, and buyers who don't have a large down payment saved.
VA mortgage loans are backed by the U.S. Department of Veterans Affairs, offering unmatched home financing benefits for those who qualify.
Who it’s for: Eligible veterans, active-duty service members, National Guard and Reserve members with qualifying service, and surviving spouses of service members.
USDA Rural Development loans are backed by the U.S. Department of Agriculture for buyers in eligible rural areas. They require no down payment and have lower mortgage insurance costs.
Who it’s for: Buyers with low to moderate household income purchasing a primary residence in a USDA-eligible area.
Side By Side
The right choice depends on your eligibility, where you're buying, and how much you have for a down payment. Here's how the three programs compare at a glance.
FHA
VA
USDA
Down Payment
As low as 3.5%
None required
None required
Who Qualifies
Most borrowers
Veterans, service members, surviving spouses
Low-to-moderate income, eligible rural areas
Mortgage Insurance
Required
Not required (funding fee applies)
Required (lower than FHA)
Loan Limits
Yes, set by county
Based on VA entitlement
No maximum purchase price
Rate Type
Fixed or adjustable
Fixed or adjustable
Fixed, 30-year
Primary Use
Purchase or refinance
Purchase or refinance
Purchase or refinance
Getting prepared
Having your documents ready before you start helps move your application forward faster.
The right program depends on your income, credit profile, military status, and where you're buying. A Pelican mortgage specialist can review your situation and identify which programs you may qualify for before you formally apply.
Once you know which program fits, you'll need to pull together documentation. This typically includes proof of income, recent tax returns, bank statements, and government-issued ID. VA loan applicants will also need a Certificate of Eligibility (COE) from the Department of Veterans Affairs.
Your loan officer will guide you through the application process, review your file, and keep you informed through underwriting and closing.
dedicated Support
Pelican's licensed mortgage loan officers work with you throughout the entire process, from pre-qualification through closing. We’re here for you when you need us!
