USDA / 100% FINANCING LOANS

100% Financing for Eligible Homes in Virginia’s Rural Communities

Overview

Conventional loans are the most widely used mortgage type across Virginia. These loans are not backed by the government (unlike VA, FHA, or USDA loans) and instead follow the guidelines of Fannie Mae and Freddie Mac. Because of their flexibility, competitive rates, and long-term affordability, they’re an excellent choice for many buyers — especially those with solid credit, established income, and a down payment.

Key Benefits of Conventional Loans

✓ Competitive Interest Rates

Borrowers with higher credit scores typically receive excellent pricing on conventional loans.

✓ Multiple Down Payment Options

• As low as 3% down for qualified first-time buyers 

• 5%–20% down is common for most households 

• 20% down allows you to avoid mortgage insurance entirely 

✓ No Upfront Mortgage Insurance Fee

Unlike FHA loans, conventional borrowers don’t pay an upfront mortgage insurance premium.

✓ More Property Flexibility

Conventional loans allow a wide range of home types, including:

• Single-family homes 

• Condos (that meet lending guidelines) 

• Townhomes 

• Some investment properties 

• Second homes 

✓ Refinancing Options

You can refinance into or out of a conventional loan depending on your financial goals.

Who Conventional Loans Work Best For

A conventional mortgage may be the right choice if you:

• Have good to excellent credit 

• Want flexible down payment options 

• Prefer to avoid government-backed programs 

• Are purchasing a home outside USDA-eligible zones 

• Want to avoid mortgage insurance by putting 20% down 

• Are buying a second home or investment property (not allowed with VA/USDA) 

Conventional programs are widely used throughout Virginia’s suburban, rural, and urban areas.

Mortgage Insurance (PMI) Details

If you put less than 20% down, you may need private mortgage insurance (PMI).

But PMI on conventional loans is:

• Removable once you reach 20% equity 

• Often less expensive for borrowers with higher credit scores 

• Not required for the full life of the loan (unlike typical FHA loans) 

Basic Requirements

While guidelines vary by lender, typical expectations include:

• Credit score 620+ 

• Steady income and employment history 

• A reasonable debt-to-income (DTI) ratio 

• Down payment of 3%–20%+ 

• Property meeting standard appraisal guidelines 

Frequently Asked Questions

Is a conventional loan cheaper than FHA?

For borrowers with strong credit, a conventional loan can be less expensive long-term due to lower mortgage insurance costs.

Do I need 20% down?

No. Many Virginia buyers put 5–10% down and still receive competitive terms.

Can I use a conventional loan for a second home or investment property?

Yes — this is one of the major advantages of conventional financing.