There is no single best loan program. The right choice depends on your credit score, down payment, income, military status, and how long you plan to stay in the home. Here's what each program actually offers, and who each one is best suited for.
The five programs DC, MD, and VA buyers use most.
Conventional Loans
Best for: Buyers with solid credit (680+), at least 3–5% down, and income that qualifies under standard DTI guidelines.
Key facts:
- Minimum credit score: 620 (rates improve significantly above 720–740)
- Minimum down payment: 3% (first-time buyers via Fannie Mae HomeReady or Freddie Mac Home Possible); 5% otherwise
- PMI required below 20% down, but cancellable once you reach 20% equity
- No upfront mortgage insurance premium
- Available for primary residences, second homes, and investment properties
- Loan limits: $806,500 in most DC, MD, and VA counties for 2025 (higher in high-cost areas)
The catch: Rate pricing is heavily influenced by credit score and LTV. Buyers with scores below 700 or LTVs above 80% may find their rate less competitive than expected. This is called loan-level price adjustments (LLPAs). Ask your lender to show you the pricing impact on your specific profile.
Full guide to conventional mortgages →
FHA Loans
Best for: Buyers with credit scores between 580–680, limited savings, or a recent credit event (bankruptcy, foreclosure) outside the waiting period.
Key facts:
- Minimum credit score: 580 for 3.5% down; 500–579 for 10% down
- Minimum down payment: 3.5%
- Upfront MIP: 1.75% of loan amount (added to loan balance at closing)
- Annual MIP: 0.55%–1.05% depending on term and LTV
- For loans with less than 10% down: MIP lasts the life of the loan. Removal requires refinancing
- Available for primary residences only
- Condo financing requires FHA-approved complex, which limits options in the DMV
The catch: FHA's mortgage insurance is expensive and, for most borrowers, permanent. A buyer who could marginally qualify for conventional is often better served by conventional, even with a slightly higher rate, because they can eventually eliminate PMI.
VA Loans
Best for: Eligible veterans, active-duty service members, and surviving spouses. This is the most powerful program available to those who qualify.
Key facts:
- No down payment required
- No monthly mortgage insurance (PMI/MIP)
- Competitive rates, often the lowest of any program
- Funding fee: 1.25%–2.15% of loan amount (based on down payment and prior use); can be financed into the loan; waived for veterans with service-connected disability ratings
- Available for primary residences only
- VA appraisals are more stringent than conventional. Property condition matters
- Entitlement can be used multiple times
The catch: The funding fee is real money. On a $500,000 loan with no prior use and no down payment, it's $10,750. But when you factor in the elimination of PMI and typically lower rates, the math almost always favors VA for eligible buyers. Run the comparison before assuming otherwise.
USDA Loans
Best for: Buyers in eligible suburban and rural areas of Maryland and Virginia with moderate income, particularly those who want zero down payment but don't have VA eligibility.
Key facts:
- No down payment required
- Guarantee fee: 1% of loan amount upfront (financeable); 0.35% annual fee
- Income limits apply, typically 115% of area median income
- Property must be in a USDA-eligible area (more of the DMV qualifies than most buyers expect. Check the USDA eligibility map)
- Primary residences only
- Credit: most lenders want 640+ for streamlined processing
The catch: Geographic and income eligibility requirements rule out many buyers in the core DC and inner suburban markets. But if you're looking in parts of Frederick, Loudoun, Prince William, or other outer suburban counties, it's worth checking.
Full guide to USDA mortgages →
Down Payment Assistance (DPA) Programs
Best for: Buyers who qualify income-wise but are short on cash for the down payment or closing costs, particularly first-time buyers in DC, Maryland, and Virginia.
Key facts:
- DC, MD, and VA each have state and local DPA programs: some are grants (no repayment), some are deferred second mortgages, some are forgivable after a period of occupancy
- Programs can often be layered with FHA, conventional, or VA loans
- Income limits and purchase price caps apply and vary by program and jurisdiction
- Not all lenders are approved to offer all programs. Program availability varies
The catch: DPA programs have more moving parts than a standard loan. They require lender approval, specific documentation, and sometimes homebuyer education courses. The tradeoff is usually worth it, but it needs to be managed by a lender who knows the programs.
Full guide to DPA programs in DC, MD & VA →
Which program is right for you? A quick decision framework.
| Your Situation | Start Here |
|---|---|
| You served in the military | VA loan. Explore this first |
| Credit 680+, 5%+ down | Conventional |
| Credit 580–680, limited savings | FHA |
| Buying in an outer suburb, moderate income | Check USDA eligibility |
| Short on down payment or closing costs | Ask about DPA programs (can layer with most loan types) |
| Not sure | Book a Mortgage Clarity Call. We'll map it out for your specific numbers |
These aren't hard rules. A buyer with 680 credit and 3.5% down might do better on conventional than FHA depending on how long they plan to stay. A veteran might still look at conventional if they're putting 20% down and want to avoid the funding fee. Context matters.
Not sure which program fits your situation?
We'll run the numbers across the programs you qualify for and show you the actual cost difference, monthly and total. That's what the Mortgage Clarity Call is for.