One of the most important decisions you'll make as a first-time homebuyer is choosing the right loan. There are several options available — and each has its own rules, benefits, and requirements. At Bootcamp For Buyers, we’ll walk you through the top loan types so you can make an informed, confident decision.
Why Your Loan Choice Matters
The loan you choose affects:
- Your required down payment
- Your monthly mortgage payment
- Whether you pay mortgage insurance
- What types of homes you can buy
- Your long-term cost of homeownership
Let’s break down the most common first-time buyer loan options.
FHA Loans: The Most Popular Option for First-Time Buyers
FHA loans are backed by the Federal Housing Administration and are known for being friendly to buyers with lower credit scores or limited savings.
Key Benefits
- Only 3.5% down required (with a 580+ credit score)
- Flexible qualification guidelines
- Allows gift funds for down payment
- Can be combined with down payment assistance
Considerations
- You must pay mortgage insurance (MIP), often for the life of the loan
- Property must meet FHA condition standards
Best for: Buyers with credit challenges or limited savings
Conventional Loans: More Competitive for Stronger Credit
Conventional loans aren't backed by a government agency, but they’re widely available and flexible for qualified buyers.
Key Benefits
- As little as 3% down for first-time buyers
- Private mortgage insurance (PMI) can be removed once you hit 20% equity
- May offer lower monthly payments with strong credit
Considerations
- Higher credit score typically required (620+ minimum)
- More documentation and stricter debt-to-income ratio limits
Best for: Buyers with solid credit and stable income
USDA Loans: 0% Down for Rural Homebuyers
Offered by the U.S. Department of Agriculture, USDA loans provide 100% financing for buyers in eligible rural or suburban areas.
Key Benefits
- 0% down payment required
- Low interest rates
- Reduced mortgage insurance costs
Considerations
- Must buy in a USDA-eligible location
- Income limits apply (based on area median)
Best for: Buyers in rural areas who want to avoid a down payment
VA Loans: Exclusive 0% Down Option for Veterans
VA loans are available to eligible active-duty service members, veterans, and certain military spouses.
Key Benefits
- 0% down payment required
- No mortgage insurance (PMI or MIP)
- Flexible credit and income requirements
Considerations
- Must pay a one-time funding fee (which can be rolled into the loan)
- Only available to those who meet military service criteria
Best for: Veterans and military families looking to buy with no down payment
How to Choose the Right Loan
The right loan depends on your credit score, income, savings, location, and service history. Here’s a quick decision guide:
- Low credit score? → FHA may be your best bet
- High credit and some savings? → Consider Conventional
- Buying in a rural area? → Check USDA eligibility
- Military service? → VA is often unbeatable
Bootcamp For Buyers helps you compare all your options and connects you with lenders who specialize in first-time buyer programs.
What About Interest Rates?
Each loan type offers competitive interest rates — but your actual rate depends on:
- Your credit score
- Your down payment
- Your debt-to-income ratio
- Current market trends
FHA loans may have slightly higher rates, but lower closing costs. VA and USDA loans often offer some of the lowest rates available.
Can I Combine These Loans with Assistance?
Yes — most down payment assistance programs can be paired with FHA, Conventional, and USDA loans. Some DPA programs are even designed specifically for FHA borrowers.
Just make sure your lender is DPA-friendly and familiar with local programs. We can help with that, too.
Conclusion: You Have More Options Than You Think
Choosing the right loan is about more than just qualifying — it’s about long-term affordability. The right loan can save you thousands over the life of your mortgage.
Bootcamp For Buyers gives you the education, tools, and lender connections to make a smart first-time purchase. Don’t go it alone — we’re here to help you get home.