Which Mortgage Is Right for Me? Quiz

This which mortgage is right for me quiz asks five questions and points you to the US loan programs worth asking a lender about: VA, USDA, FHA and low-down-payment conventional loans. It is a starting map, not an approval. Each suggestion below explains why the quiz pointed you there and what the program’s official rules require.

How does the quiz work?

The quiz asks about military service, whether the home is rural, your credit score range, your down payment and your income compared with your area’s median. Each answer opens or rules out programs based on their main eligibility rules. You then see a short list of programs to raise with lenders.

The five questions map to programs like this:

1. Military service. “Yes” adds a VA loan.
2. Small town or rural area. “Yes or maybe” adds a USDA loan.
3. Credit score. Below 620 adds FHA. From 620 to 679 with 3% to 10% down also adds FHA. 680 or higher adds a standard conventional loan.
4. Down payment. More than 10% adds a standard conventional loan. “Little or nothing” or “3% to 10%” adds down payment assistance.
5. Income vs area median. Unless you answer “No,” and as long as your score is 620 or higher and you plan to put down 10% or less, the quiz adds conventional 3%-down programs.

If no rule matches, the quiz shows FHA and conventional as a starting pair.

The CFPB sums up the main loan types simply: conventional loans “typically cost less than FHA loans but can be harder to get,” FHA offers a “low down payment, available to those with lower credit scores,” VA is for “veterans, servicemembers, or surviving spouses,” and USDA is “for low- to middle-income borrowers in rural areas” (CFPB).

When does the quiz suggest a VA loan?

If you answer that you or your spouse served, the quiz suggests a VA loan first. VA-backed purchase loans often need no down payment, carry no monthly mortgage insurance and are open to eligible veterans, service members and some surviving spouses. Most borrowers pay a one-time funding fee instead.

VA says you can often buy with no down payment “as long as the sales price isn’t higher than the home’s appraised value,” and that there is “no need for private mortgage insurance (PMI) or mortgage insurance premiums (MIP)” (VA). VA does not post a minimum credit score; you must meet VA’s and your lender’s standards.

The funding fee is 2.15% of the loan for a first-use purchase with less than 5% down, falling to 1.5% with 5% down and 1.25% with 10% down. Veterans receiving compensation for a service-connected disability, and some others, are exempt (VA). Estimate yours with the VA funding fee calculator.

When does the quiz suggest a USDA loan?

The quiz suggests a USDA guaranteed loan if the home is in a rural or small-town area and your income is at or below your area’s moderate-income level. USDA loans are only for a home you will live in as your primary residence.

Under USDA’s rules, “the household’s adjusted income must not exceed the applicable moderate income limit,” and you must agree to live in the home as your principal residence; USDA will not guarantee loans for investment properties (7 CFR 3555.151). Moderate income is defined as the greater of 115% of US median family income, the average of statewide and state non-metro median income, or 115/80ths of the local low-income limit, adjusted for household size (7 CFR 3555.10).

“Rural area” follows section 520 of the Housing Act of 1949. Many areas outside large cities qualify, so do not rule yourself out without checking a specific address with a lender.

When does the quiz suggest FHA?

The quiz suggests FHA when your score is below 620, or between 620 and 679 with 3% to 10% down. FHA’s credit rules are the most forgiving of the mainstream programs, though its mortgage insurance usually lasts for the life of the loan with less than 10% down.

HUD’s handbook allows maximum financing, with a 3.5% minimum investment, for scores of 580 or higher. Scores from 500 to 579 are limited to 90% loan-to-value, and scores below 500 are not eligible (HUD Handbook 4000.1). FHA charges an upfront premium of 1.75% and an annual premium; see the FHA MIP calculator.

When does the quiz suggest a conventional loan?

The quiz suggests a standard conventional loan with a 680+ score or more than 10% down. It flags 3%-down programs when your score is 620+, you plan to put down 10% or less, and your income may be at or below your area median. Conventional PMI can be removed later.

Fannie Mae no longer sets a fixed minimum score for loans run through its Desktop Underwriter system, though manually underwritten fixed-rate loans still need 620 (Fannie Mae Selling Guide). Lenders can set higher minimums. The quiz asks about median income to cast a wide net, but the program limits are lower: Freddie Mac’s Home Possible allows “a 3% down payment with flexible sources of funding” and limits qualifying income to 80% of area median income (Freddie Mac).

When does the quiz suggest down payment assistance?

If you can put down little or nothing, or 3% to 10%, the quiz adds down payment assistance. State and local housing finance agencies offer grants and second loans that can cover part of the down payment or closing costs. Many pair with FHA, VA, USDA or conventional first mortgages.

Rules, income limits and repayment terms vary widely by state and city. Our guide to first-time homebuyer down payment assistance explains the main types and how to find programs near you.

How do the programs compare?

Each program trades off who can use it, how much cash it needs and how mortgage insurance works. The table below summarizes the rules the quiz relies on. Your lender will confirm the details for your situation.

What should you do with your results?

Take your short list to at least three lenders and ask for a Loan Estimate for each program you might qualify for. Compare the rate, monthly payment, mortgage insurance and cash to close. Then pick the loan that costs least over the years you expect to stay.

Helpful next reads: FHA vs conventional loans for a deeper comparison, and whether you can buy a house with a 620 credit score if your score is near the line. To compare FHA and conventional costs on your own numbers, try the FHA vs conventional calculator.