🤔Which Home Loan Is Right for You? 🏠4 Options to Explore
Which home loan is right for you?
Buying a home in Virginia Beach, Chesapeake, or Norfolk? One of your first big decisions is choosing the right mortgage—and it’s more important than ever in 2025.
With high home prices and fluctuating interest rates, the right loan can lower your monthly payment, reduce upfront costs, and give you more financial breathing room.
In this post, we’ll break down four of the most common home loan options—Conventional, FHA, VA, and USDA—so you can compare key features, understand who qualifies, and figure out which loan best fits your financial goals.
Key Takeaways
✅ There are four main types of home loans: Conventional, FHA, VA, and USDA.
✅ Each loan type is tailored for different buyer situations and financial profiles.
✅ Down payment, credit score, and property location significantly influence loan eligibility.
✅ Choosing the right loan can reduce monthly costs and increase approval odds.
✅ VA and USDA loans offer 100% financing options with specific eligibility requirements
What Are the Main Types of Home Loans?
Here are the four most widely used mortgage types:
Conventional Loans – Best for buyers with strong credit and steady income.
FHA Loans – Great for first-time buyers or those with lower credit scores.
VA Loans – Exclusive to veterans, service members, and eligible spouses.
USDA Loans – Designed for buyers in rural or suburban areas who meet income limits.
Each loan has its own requirements and benefits, so the
right choice depends on your personal financial picture.
| Loan Type | Minimum Down | Credit Score | Key Features |
|---|---|---|---|
| Conventional | 3% | 620+ | PMI if under 20% down, flexible terms, lower rates with good credit |
| FHA | 3.5% | 580+ | Lenient credit requirements, mortgage insurance required, government-backed |
| VA | 0% | No minimum (lender discretion) | No PMI, competitive rates, must be eligible military/veteran |
| USDA | 0% | 640+ recommended | Rural areas only, income limits apply, lower mortgage insurance |
Here are the Pros and Cons:
🏦 Conventional Loans
Who it's for: Buyers with good credit (usually 620 or higher) and a stable income.
- Lower overall borrowing costs for buyers with excellent credit
- Can be used for primary, secondary, or investment properties
- More flexible loan structures and terms
- Cons: Stricter credit and income requirements; PMI adds to monthly cost unless you put 20% down
Bottom line: A solid choice if you have good financial standing and want flexibility.
🏠FHA Loans
Who it's for: First-time homebuyers, lower-income buyers, and those with credit scores starting at 580.
- Easier to qualify for than conventional loans
- Lower down payment requirements
- Allows financial gifts or grants to cover down payment
- Cons: Mortgage insurance can be expensive and lasts the life of the loan (if putting down less than 10%); property must meet strict FHA appraisal standards
Bottom line: A strong option if your credit isn’t perfect or you’re working with a limited down payment.
🎖️ VA Loans
Who it's for: Active-duty military, veterans, National Guard members, and eligible surviving spouses.
- No down payment makes homeownership more accessible
- No monthly PMI helps reduce costs
- Favorable loan terms and rates
- Cons: Only available to eligible military-connected buyers; funding fee adds to upfront costs
Bottom line: If you qualify, VA loans offer some of the best terms available.
🌾 USDA Loans
Who it's for: Buyers in qualifying rural or suburban areas with low-to-moderate income.
- No down payment required
- Lower mortgage insurance costs than FHA
- Great option for buyers outside of urban areas
- Cons: Only available in specific geographic areas; income limits apply based on household size and region
Bottom line: Perfect if you're buying in a rural area and meet income requirements.
đź’ˇ Pro Tip:
Virginia—especially the Hampton Roads area—offers a variety of local programs and grants for both first-time and repeat homebuyers. Many of these options provide low- to no-down-payment assistance through loans or grants. Qualified buyers may be able to cover their down payment, closing costs, or both.
👉 Learn more here
Which Loan Type Is Most Popular in Hampton Roads?
The best loan for you also depends on local trends and
eligibility. For example, in regions with a strong military presence like
Hampton Roads, VA loans are widely used. FHA loans are popular in urban markets
where first-time buyers are more common. USDA loans are frequently used in
rural counties and agricultural zones.
| Loan Type | # of Records | $ Amount | % of Total Loans |
|---|---|---|---|
| Home Purchase, Conventional | 18,081 | $5,892,455,000 | 42.70% |
| Home Purchase, FHA | 6,781 | $2,093,635,000 | 16.02% |
| Home Purchase, VA | 17,406 | $6,721,610,000 | 41.08% |
| Home Purchase, USDA | 63 | $12,955,000 | 0.15% |
Frequently Asked Questions
Can I qualify for more than one type of loan?
Yes. Many buyers qualify for multiple loan programs. Your lender will compare
your options based on your finances, location, and goals.
Is one loan always better than the others?
Not necessarily. Each loan serves different buyers. The best loan for you
balances cost, eligibility, and your long-term goals.
What if I don’t have enough saved for a down payment?
FHA, VA, and USDA loans are all low- or no-down-payment options. You may also
qualify for local down payment assistance programs.
What’s the fastest way to get pre-approved?
Work with a trusted lender who can review your credit, income, and
debt-to-income ratio. You can usually get a pre-approval letter in a few days.
Final Thoughts
Choosing the right mortgage isn't just about what you
qualify for—it’s about what helps you achieve homeownership on your terms.
Whether you're buying your first home, upgrading, or relocating, understanding
your loan options helps you plan smarter and avoid surprises.
A good next step? Speak with an experienced real estate
agent and a trusted lender. Together, we’ll help you navigate the details,
compare options, and move forward with confidence.
đź’° The Right Financing Could Save You Thousands
The right financing can go a long way to helping you buy the home of your dreams. Let's talk about your home buying plans.
Schedule your free strategy call today and move one step close to homeownership.
đź“… Book Your Free 1 on 1 Strategy CallThanks for Reading,
Liz Schuyler is a top Virginia Beach REALTOR® with RE/MAX Allegiance, licensed since 2001 and trusted across Hampton Roads. With 350+ homes sold, she helps clients Sell, Move, and Invest with confidence and strategy.
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