Why it matters
Almost every buyer chooses among four loans: the conventional, which the government does not back, and the three it does (FHA, VA and USDA). There is no better one in the abstract: there is one that fits your credit, your money and the home you are looking at. This puts them face to face.
The mother difference: who backs it and who sets the rules
On a government loan, a federal agency (HUD, the Department of Veterans Affairs or the USDA) guarantees the lender a share if you stop paying. In exchange, the agency publishes the program rules: its floors are the same at every lender, and the lender adds its own on top. On a conventional loan there is no agency: the rules of Fannie Mae and Freddie Mac rule, since they buy most of these loans.
| The loan | Who backs it | Its own gate |
|---|---|---|
| Conventional | Nobody: Fannie Mae or Freddie Mac buys it | No area, income or service gate |
| FHA | HUD | None: it is the most open front door |
| VA | The Department of Veterans Affairs | Having served, with your certificate (COE) |
| USDA | USDA Rural Development | The home in an eligible rural area and your income under its cap |
Face to face, on what decides it
| Conventional | FHA | VA | USDA | |
|---|---|---|---|---|
| Minimum down payment | 3% through conditional paths; 5% standard | 3.5% with a 580+ score | 0% | 0% |
| Published credit floor | 620 (Fannie Mae matrix) | 500 with 10% down; 580 with 3.5% | The program publishes none | The program publishes none |
| Upfront program cost | None | Upfront premium: 1.75% | Funding fee: 1.25–3.30% | Upfront fee: 1.00% |
| Annual insurance cost | PMI if you come in under 20%; it ends when you reach 20% equity | MIP 0.50–0.55%; with under 10% down, for the life of the loan | None | 0.35%, for the life of the loan |
| Caps | The amount: $832,750 in Miami-Dade and Broward (2026); above that, jumbo | HUD's amount limit by county | No cap with full entitlement | Household income up to 115% of the median |
| The home | Primary, second home or investment | Primary residence | Primary residence | Primary residence in an eligible area |
The row that moves the most money over time is not the down payment: it is the insurance that never ends. An FHA loan with 3.5% down and a USDA loan carry their annual cost until you sell or refinance into another loan type; the conventional one switches off on its own at 20%. Each program in detail: conventional, FHA, VA and USDA.
With your numbers, not the example. With five questions and no credit check: how many properties for sale are within your reach and what you'd pay a month.
I want to see what I can buyPMI vs MIP: the two insurances, compared
The most searched comparison is the insurance one, because they look alike in the monthly payment and are alike in nothing else. PMI belongs to the conventional loan; MIP belongs to FHA.
| PMI (conventional) | MIP (FHA) | |
|---|---|---|
| Who sets the price | A private insurer, from your credit and your down payment | HUD: the same rate for everyone |
| How much | No public rate; your figure is on your Loan Estimate | 1.75% upfront and 0.50–0.55% a year |
| How it ends | You request it at 80% of the original value; on its own, at 78% | With under 10% down, never inside the loan |
| If your credit is bruised | The premium goes up | The premium does not change: its edge with bruised credit |
And the "lender-paid" insurance? It is a PMI variant where the lender pays the premium and charges you through a higher rate. In favor: no insurance line in your payment and no waiting for 20% to "remove" it. Against: it never comes off — the higher rate lasts the life of the loan unless you refinance — and over many years in the home it can cost more than regular PMI. The honest comparison is total cost over the years you plan to stay. PMI in detail is in its guide.
How to choose: three questions in order
- 1Did you serve in the armed forces?If you hold your Certificate of Eligibility, the VA loan almost always wins: $0 down and no annual insurance. Start there.
- 2Is the home in a rural area and your income under the cap?If both are yes, the USDA competes with the VA without asking for service: $0 down and program costs below FHA's. In Miami-Dade and Broward the eligible area is the exception: check the address before counting on it.
- 3How are your credit and your down payment money?With bruised credit and little money, FHA is the door that stays open (580 with 3.5% down). With strong credit, the conventional loan usually costs less over time, because its insurance switches off at 20% and it pays no government upfront premium.
The programs, for your case. Answer the basics — where you want to buy, the price, how many live in the home and your income — and see which Miami-Dade and Broward programs could fit you, with their amount and whether they are open today.
I want to see my programsSources
- Each program's figures are the ones verified in this site's guides against its official source: FHA at HUD (Mortgagee Letter 2023-05), VA at va.gov, USDA at rd.usda.gov, and the conventional loan at the FHFA and Fannie Mae's matrix.
- Consumer Financial Protection Bureau (CFPB), the PMI exits under the Homeowners Protection Act: consumerfinance.gov
We run the comparison on your numbers.
The general table points the way; your case decides. With your credit, your down payment and the home you are looking at, we will tell you which loan costs you least in total. Leave us your number and we will go over it with you.
This guide orients you, it does not advise you. The ranges are estimates, and final terms are set by the lender, the insurance company, or the homeowners or building association, based on your specific case.
Whenever you want to move ahead, we handle it with you.