Conventional loans are not backed by government agencies and typically offer the most flexibility fo
Popular mortgage loan option
Conventional vs USDA Loans: Which Should You Choose?
Compare conventional and USDA loans. USDA offers zero down payment for rural and suburban homebuyers who meet income limits.
Feature-by-Feature Comparison
See how Conventional Loans and USDA Loans stack up
| Feature | Conventional Loans | USDA Loans |
|---|---|---|
| Down Payment | 3-20% | 0% |
| Location Requirement | Anywhere | USDA-eligible rural/suburban areas |
| Income Limits | None | 115% of area median income |
| Credit Score | 620+ | 640+ |
| Mortgage Insurance | PMI if <20% down | Guarantee fee (lower than PMI) |
| Property Types | All types | Single-family primary residence |
Which Loan Is Right for You?
Each loan type has ideal scenarios
The Bottom Line
If you are buying in a USDA-eligible area and meet income requirements, USDA loans offer significant savings with zero down payment and lower insurance costs. Conventional loans are more flexible for location and property type.
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Frequently Asked Questions
Common questions about Conventional Loans vs USDA Loans
Frequently Asked Questions
USDA has an online eligibility map at eligibility.sc.egov.usda.gov. Many suburban areas qualify, not just rural farmland. About 97% of the U.S. land mass is USDA-eligible.
This comparison is for informational purposes only and does not constitute financial advice. Rates, terms, and program availability are subject to change without notice and may vary based on creditworthiness, property type, loan amount, and other factors. Contact NMHL for current rates and personalized loan options. NMHL NMLS# 2557591. Equal Housing Lender.