| Program |
Features |
Drawbacks |
Best For... |
USDA Rural Development
|
- 100% Financing
- Low Rates
- No Monthly PMI
- Seller Can Pay Closing Costs
|
- Home Location Restrictions
- Income Restrictions
- Not for Commercial Use
- Can't already own a home in the
area
|
If you qualify, this will probably be
your best option |
|
FHA |
- 97% Financing
- Low Rates
- May Qualify With a Credit Score
as Low as 580
- No Location or Income
Restrictions
|
- Down Payment Required of 3% or
More
- Monthly FHA Fee
- No 30 Days Late Allowed in Past
Year
|
When you qualify for FHA, but not USDA
and when a small down payment is important |
|
Conventional |
- 95-97% Financing
- Low Rates
- Many Program Options
|
- Good Credit Required
- 3-5% or More Down Payment
Required
|
Great option if you can put 3-5% or more
down and have a good credit history |
|
Commercial |
- For Farms and Income Producing
Businesses
- Down Payment Depends on Credit
and Business Type
|
- Down Payment Depends on Credit
and Business Type
|
Farms, Retail businesses, etc. |
|
Subprime |
- Low Credit Scores May Be Accepted
|
- Higher Finance Rate
- 10-20% Down Payment
|
As a last option if other programs can't
be qualified for |
