The loan type you choose affects your down payment, monthly payment, credit requirements, and how long you'll pay mortgage insurance. Here's a straight comparison.
Conventional loans
Not backed by the government. Many follow Fannie Mae or Freddie Mac guidelines, while others use different investor requirements. Monthly borrower-paid PMI generally has a borrower-request route and a separate scheduled automatic-termination route; 80% is not automatic approval.
FHA loans
Backed by the Federal Housing Administration. Great for buyers with lower credit scores or smaller down payments. Minimum 3.5% down with a 580 score. The catch: you pay an upfront MIP (1.75% of the loan) at closing, plus monthly MIP for the life of the loan if you put less than 10% down. That ongoing MIP makes FHA more expensive long-term if you plan to stay in the home.
VA loans
Available to eligible veterans, active duty, and surviving spouses. Zero down payment. No monthly PMI. Typically competitive rates. There is a VA funding fee (1.25-3.3% of the loan depending on down payment and first-time use) but it can be financed. By far the best loan program for those who qualify.
USDA loans
Zero down payment for homes in eligible rural and suburban areas. Income limits apply — typically 115% of the area median income. Has an upfront guarantee fee (1% of loan) and annual fee (0.35%), but still often cheaper than FHA for those who qualify.
Eligibility, rates, and requirements vary. A licensed loan officer can run through which programs you qualify for and which makes the most financial sense for your situation.