The most suitable mortgage loan type depends on your situation: VA loans are ideal for eligible veterans ($0 down, no PMI). FHA loans are ideal for borrowers with 580–679 credit or minimal down payment. Conventional loans are ideal for borrowers with 680+ credit with 5%+ down. DSCR loans are ideal for real estate investors. Jumbo loans cover purchases above $806,500. Bank Statement loans are ideal for self-employed borrowers. Dustin Carlson (NMLS #193009) can identify the right loan for your profile in minutes — call (281) 939-5191.
Choosing the wrong loan type can cost you thousands of dollars — or worse, disqualify you entirely. This guide breaks down every major mortgage loan type available in 2026, who qualifies, what it costs, and when each one makes the most sense.
Side-by-Side Comparison: All Loan Types
| Feature | FHA | VA Best for Vets | Conventional | DSCR | Jumbo | Bank Statement |
|---|---|---|---|---|---|---|
| Min. Credit Score | 580 | 580* | 620 | 620 | 680 | 620 |
| Min. Down Payment | 3.5% | $0 | 3% | 20% | 10% | 10% |
| Mortgage Insurance | MIP (life of loan) | None | PMI (cancels at 20%) | None | Varies | Varies |
| Income Docs Required | W-2 / Tax Returns | W-2 / Tax Returns | W-2 / Tax Returns | None | W-2 / Tax Returns | Bank Statements |
| Max Loan Amount | $524,225 (most TX) | No limit* | $806,500 | $3M+ | $3M+ | $3M+ |
| Primary Residence Only? | Yes | Yes | No | Investment OK | No | No |
| Upfront Fee | 1.75% MIP | 1.25–3.3% funding fee | None | None | None | None |
| Avg. Close Time | 21–25 days | 21–28 days | 21 days | 21–30 days | 25–35 days | 25–35 days |
| Ideal For | Low credit / first-time buyers | Veterans & active duty | Good credit, low cost | Investors / landlords | Luxury homes $806K+ | Self-employed borrowers |
*VA has no official minimum credit score; most lenders require 580–620. VA loan limits apply only to borrowers with reduced entitlement.
Which Loan Is Right for You?
FHA Loan
580+ credit, 3.5% down. ideal for first-time buyers and borrowers rebuilding credit. MIP required for life of loan.
ideal for: Low credit / First-time buyersVA Loan
$0 down, no PMI, competitive rates. Available to veterans, active duty, and surviving spouses. Funding fee waived for disabled vets.
ideal for: Veterans & Active DutyConventional
620+ credit, 3–20% down. PMI cancels at 20% equity. Strong long-term value for borrowers with good credit.
ideal for: Good credit, 5%+ downDSCR Loan
No income docs. Qualifies on rental income. No limit on number of properties. Available for LLCs.
ideal for: Real estate investorsJumbo Loan
Loans above $806,500. Requires 680+ credit, 10–20% down, and 6–12 months reserves. For luxury and high-value homes.
ideal for: Purchases above $806,500Bank Statement Loan
No W-2s or tax returns. Uses 12–24 months of deposits to calculate income. For self-employed borrowers and business owners.
ideal for: Self-employed borrowersFHA vs Conventional: The Most Common Decision
For most buyers without military service, the choice comes down to FHA vs. conventional. The right answer depends almost entirely on your credit score and down payment:
| Credit Score | Recommended Loan | Why |
|---|---|---|
| 500–579 | FHA (10% down) | Only option at this credit level |
| 580–619 | FHA (3.5% down) | FHA rates and PMI cheaper than conventional at this score |
| 620–679 | FHA or Conventional | Run both scenarios — FHA often wins on payment |
| 680–739 | Conventional | Conventional PMI cheaper; MIP cancels at 20% equity |
| 740+ | Conventional | most favorable rates, lowest PMI, most flexibility |
VA Loan: The most suitable mortgage Available (For Those Who Qualify)
For eligible veterans and active-duty service members, the VA loan is almost always the most suitable mortgage option on the market. $0 down payment, no PMI ever, competitive rates, and no loan limits with full entitlement. The only cost is the VA funding fee (1.25–3.3%), which is waived entirely for veterans with a service-connected disability rating of 10% or more.
DSCR Loans: A Powerful Investor Tool
DSCR (Debt Service Coverage Ratio) loans have transformed real estate investing. Instead of qualifying on your personal income, the property qualifies on its own rental income. No W-2s, no tax returns, no employment verification. You can close in an LLC, hold unlimited properties, and scale a portfolio without hitting the conventional 10-property limit.
The key metric: DSCR = Monthly Rent ÷ Monthly PITIA. A DSCR of 1.0 means rent equals the payment. Most programs require 1.0+. Higher DSCR unlocks better rates.
Not Sure Which Loan Is Right for You?
Dustin Carlson will analyze your credit, income, and goals and tell you exactly which loan type saves you the most money — in 15 minutes or less.
Get a Free Loan Comparison →Dustin Carlson NMLS #193009 · First Colony Mortgage NMLS #3112 · (281) 939-5191