Compare mortgage loan types
Most rate pages show one number. Real borrowers choose between nine very different products. Here’s the honest side-by-side — including the non-traditional options other sites skip.
| Loan type | Sample rate | Min. down | Min. credit | Income proof | Best for |
|---|---|---|---|---|---|
| Conventional | 6.58% | 3% | 620 | 2 yrs returns / W-2 | Steady documented income |
| FHA | 6.40% | 3.5% | 580 | 2 yrs returns / W-2 | Lower credit, first-time |
| VA | 6.23% | 0% | 580 | COE + income docs | Veterans & service members |
| USDA | 6.42% | 0% | 640 | Income + rural address | Rural buyers under income caps |
| Bank statement★ self-employed | 7.42% | 10% | 660 | 12–24 mo statements | Self-employed w/ write-offs |
| DSCRinvestor | 7.77% | 20% | 660 | Property cash flow | Rental investors |
| ITIN | 8.07% | 15% | Alt. | ITIN + alt credit | No SSN / newcomer |
| Asset depletion | 7.27% | 20% | 700 | Liquid assets | Asset-rich, low income |
| Jumbo | 6.65% | 10% | 700 | Returns + reserves | High-value homes |
Which loan type fits a non-traditional borrower?
If your income is fully documented on W-2s and tax returns, a conventional or FHA loan is almost always cheapest. The non-traditional products exist for the gap conventional underwriting can’t bridge — when your real ability to pay isn’t visible on a tax return.
Conventional & FHA
The default for documented income. Lowest rates and smallest down payments, but both programs qualify you on net income after deductions — where self-employed borrowers get squeezed. Conventional requires a 620 credit score minimum; FHA goes to 580 (or 500 with 10% down). FHA carries mandatory mortgage insurance for the life of the loan if you put down less than 10%, which is why many borrowers refinance to conventional once they hit 20% equity.
VA & USDA — the zero-down paths
VA loans are for veterans, active-duty service members, and some surviving spouses — no down payment, no monthly mortgage insurance, and rates typically below conventional. USDA loans are open to any buyer in an eligible rural area whose household income stays under the county cap, also at 0% down. Both still require documented income, which is where self-employed applicants hit the same write-off problem they face with conventional loans.
Bank statement & non-QM
Non-QM programs exist to bridge documented income gaps. A bank statement loan qualifies you on 12–24 months of deposit history instead of tax returns, making write-offs irrelevant to underwriting. P&L-only loans use a CPA-prepared statement instead of two years of returns. Both carry a rate premium over agency loans — typically 0.75–2 percentage points, an illustrative editorial estimate rather than a quoted rate — because the lender holds or sells the loan to a private investor rather than Fannie or Freddie. For borrowers who otherwise wouldn’t qualify, that premium buys access, not a worse deal.
DSCR, ITIN & asset depletion
Three specialized non-QM paths:
- DSCR (Debt Service Coverage Ratio) qualifies a rental property on its own projected cash flow — no personal income documents required. The property must generate enough rent to cover the mortgage payment, typically at a 1.0–1.25× ratio.
- ITIN loans serve borrowers who have an Individual Taxpayer Identification Number but not a Social Security number — primarily recent immigrants and non-resident alien buyers.
- Asset depletion converts liquid assets (savings, brokerage accounts, retirement funds) into a synthetic monthly income stream for qualifying purposes. Common for retirees or high-net-worth borrowers with low reported income.
How to choose
Start with the simplest question: what does your documented income actually show?
- Tax returns show enough income: Use conventional (if credit ≥ 620) or FHA (credit ≥ 580). Add VA or USDA if you qualify for the additional benefits.
- Tax returns understate your real income: Get a bank statement or P&L-only quote alongside your conventional quote. Compare the all-in cost at your loan amount, not just the rate.
- You’re buying a rental property: DSCR — no personal income required, just property cash flow.
- You have an ITIN, not an SSN: ITIN loan is usually the only path. See the ITIN guide →
- You’re not sure: Take the 5-question quiz → It maps your situation to the most likely loan type in under two minutes.
Frequently asked questions
A Qualified Mortgage (QM) meets the CFPB's Ability-to-Repay rule and can be sold to Fannie Mae or Freddie Mac on the secondary market — conventional, FHA, VA, and USDA are all QM products. Non-QM loans (bank statement, DSCR, ITIN, asset depletion, P&L-only) use alternative income documentation that doesn't fit agency guidelines. Because lenders hold or sell non-QM loans to private investors rather than agencies, the rate is higher — usually 0.75–2 percentage points above conventional.
Yes — this is a common strategy. Borrow on a bank statement loan now, then refinance to conventional once you have two years of tax returns showing sufficient net income. Plan for refinancing costs (roughly 2–5% of the loan amount) and rate risk if conventional rates rise before you're ready.
VA loans consistently carry the lowest rate for those who qualify, often below conventional. Conventional is next, followed closely by FHA and USDA. Non-QM products (bank statement, DSCR, ITIN, asset depletion) carry the highest rates because they can't be sold to Fannie/Freddie — the premium reflects retained lender risk, not a penalty.
VA and USDA loans both allow 0% down for eligible borrowers. FHA requires 3.5% (or 10% with a credit score under 580). Conventional can go as low as 3% with PMI. Non-QM products typically require 10–20% down — the larger down payment compensates for the alternative income documentation.
It depends entirely on what your tax returns show. If your net income after deductions is sufficient to qualify at the loan amount you need, conventional or FHA is almost always cheapest. If write-offs shrink your qualifying income below what you need, a bank statement or P&L-only loan can out-qualify it — at a higher rate. The loan type quiz walks through this decision in five questions.
Lenders across every program
Real lenders that publicly market these programs, mapped to what each offers — for reference, not endorsement. We’re a publisher, not a lender; verify terms with each directly.
Not sure which loan fits?
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