DHI MORTGAGE
UNDERSTANDING
LOAN TYPES & PRODUCTS
There are many different types of mortgage loans – each with its advantages and limitations. Read on for information on the most common loans and view our informational videos below. Please note that these are general descriptions. Additional terms, conditions, and fees may apply. Speak to your DHI Mortgage Loan Originator to learn which loan may be right for your situation.
Conventional Loans
As you might have guessed from the name, Conventional loans are the most common type of mortgage loan. They are provided by a bank or private lender and typically offer higher loan limits than government-backed loans.
THE TYPICAL BORROWER
  • Good credit
  • Little debt
  • Has at least 5% down payment
IMPORTANT FACTORS TO CONSIDER
  • Requires borrower to purchase private mortgage insurance (PMI) unless they pay at least 20% down payment
  • Typically has higher interest rates than government-backed loans
FHA Loans
FHA mortgage loans are insured by the Federal Housing Administration (FHA). With an FHA loan, the interest rates are comparable to Conventional loans, but are more flexible in terms of credit history.
THE TYPICAL BORROWER
  • Less than perfect credit
  • Some debt
  • Has at least 3.5% down payment
IMPORTANT FACTORS TO CONSIDER
  • Higher mortgage insurance premiums, paid for the life of the loan
  • Lower loan amounts
  • Gift funds can be used for down payments
VA Loans
VA loans are guaranteed by the U.S. Department of Veterans Affairs and are eligible only for veterans, active military, reservists, and surviving spouses. VA loans offer 100% financing, do not require PMI, and have lower interest rates than Conventional or FHA loans.
THE TYPICAL BORROWER
  • Veteran, active member of the military, or a surviving spouse
  • Does not have down payment funds
IMPORTANT FACTORS TO CONSIDER
  • Loan amount restrictions
  • The VA chooses the home appraiser
  • Requires a VA funding fee, which can be financed into the loan
USDA Loans
The U.S. Department of Agriculture (USDA) assists approved lenders in providing low- and moderate-income households the opportunity to own homes in rural areas. USDA loans offer 100% financing and lower interest rates than Conventional or FHA loans.
THE TYPICAL BORROWER
  • Lives, or wishes to live, in a specific rural or suburban area
  • Does not have down payment funds
IMPORTANT FACTORS TO CONSIDER
  • Household income and asset limitations
  • Specific geographic limitations
  • Stricter guidelines on buyers’ credit
Jumbo Loans
A Jumbo loan is a loan amount above Conventional loan limits as well as Fannie Mae and Freddie Mac regulation. These loans are typically used for large luxury homes or homes in extremely high-cost areas.
THE TYPICAL BORROWER
  • Excellent credit
  • Little or no debt
  • Has down payment funds
  • At least 6 months’ worth of mortgage payments in savings
IMPORTANT FACTORS TO CONSIDER
  • Higher interest rates
  • Typically require 20% down payment
  • May or may not require PMI, depending on lender
 
DHI MORTGAGE NATIONAL LOAN PRODUCTS
Click on the links below to read about some additional loan programs that may be available to you. As always, reach out to your DHI Mortgage Loan Originator for more information!