 TITLE: What Type of Mortgage Loan Is Best? CONTENT: Is a Government-Insured Mortgage the Right Choice?\n--------------------------------------------------\nA few types of government-backed loans have more lenient borrowing criteria than conventional loans. The main ones you'll see are FHA, USDA and VA loans.\n### FHA Loans\nFHA loans are backed by the Federal Housing Administration, and their purpose is to help first-time homebuyers who might not be able to qualify for a conventional loan. Borrowing criteria is more lax, with lower credit score and income requirements. The down payment can be as low as 3.5%, but unlike with a conventional mortgage, you may have to pay mortgage insurance for the life of the loan. Interest rates on FHA loans are often a bit higher than that of conventional loans since the borrowing standards are less stringent.\n### USDA Loans\nThe U.S. Department of Agriculture offers mortgage loans to low- and middle-income homebuyers in eligible rural areas. The USDA has a direct lending program only for low-income Americans, with extremely low interest rates and no required down payment. It also offers a guarantee program in which it backs loans granted by local lenders (similar to a VA or FHA loan). These loans allow a zero down payment and offer low rates, but you might have to pay mortgage insurance.\n### VA Loans\nBacked by the U.S. Department of Veteran Affairs, a VA loan is a home loan specifically for former and current military service members and eligible family members. These mortgage loans permit a zero down payment with no private mortgage insurance, and interest rates are typically lower than with conventional loans. To qualify, you must provide proof of stable income that shows you can repay the loan, and you must obtain a Certificate of Eligibility from the VA.\n### What to Consider When Getting a Government-Insured Mortgage\nIf you're unable to qualify for a conventional loan, or your priority is getting a loan with as low a down payment as possible, government-insured loans can be a great option. They're ideal for eligible borrowers with low cash savings.\nGovernment-insured loans are also a good option for homebuyers with bad credit. An FHA loan permits credit scores of 580 and above with a down payment of 3.5%, and it sometimes will allow credit scores as low as 500 with a down payment of 10% or more. While VA loans don't have an official credit score minimum, most lenders require a score of around 620. USDA loans typically require a score of 640 or above, and you can't earn more than a certain amount (based on your location).\nKeep in mind that not all lenders offer government-backed loans. You'll need to research local and online lenders to findes that do offer these loans and compare rates before deciding on one. END