If you have a limited income, live in certain rural areas or are a military veteran, you might qualify for one of these three government-guaranteed programs.

These loans may allow you to pay a smaller down payment and/or may carry a lower interest rate. Government guarantees make it much easier for lenders to extend loans to people who otherwise might have trouble qualifying for mortgages.

Conventional Loans 

A conventional loan is a home loan that is not insured or guaranteed by a government agency, typically requires a down payment and includes out-of-pocket closing costs. 

  • Down Payment: Yes 
  • Appraisal Type: Primary Residence, Investment, Second Residence 
  • Loan Purpose: Home Purchase or Refinance 

Conventional loans are usually based on a loan-to-value ratio, meaning that the borrower makes a down payment. The amount of the down payment determines if the borrower can avoid paying Private Mortgage Insurance (PMI), which protects the lender in case of default. Where PMI is needed, borrowers are required to pay the PMI premiums as part of their regular monthly mortgage until sufficient equity in the property is reached.  

Conventional mortgages that have a loan limit set by Fannie Mae and Freddie Mac are referred to as Conforming loans. Loans that exceed the conforming loan limit are known as Jumbo mortgage loans. Rates on Jumbo loans are usually higher than those on Conforming loans.

Government-Guaranteed Loans 

If you have a limited income, live in certain rural areas or are a military veteran, you might qualify for one of these three government-guaranteed programs....

  • Federal Housing Administration (FHA) loan: Do you have blemished credit and/or can’t make much of a down payment? You may still qualify for a government-guaranteed FHA loan. You’ll pay an extra, upfront fee called a mortgage insurance premium (MIP) for this loan. You’ll also pay insurance with each of your monthly payments. MIP helps protect the government in case you don’t repay your loan.
  • United States Department of Agriculture (USDA) loan: You may qualify for this loan, which requires no down payment, if you buy a home in certain rural areas. These loans carry income limitations. We can help you determine if you’re eligible. Note: You can’t get an adjustable rate on a USDA loan.
  • Veterans Affairs (VA) loan: The U.S. Department of Veterans Affairs (not Howard Bank) determines whether you’re eligible for a VA mortgage through us. These loans require no down payment and offer very favorable terms. The VA does require you to pay a VA funding fee of 0.5% to 3.3% of the loan amount. You’ll also need a VA certificate of eligibility (COE), available through the Department of Veteran Affairs. If you'd like, any of our Loan Officers at VAmortgage, a Howard Bank division, can help you obtain your COE. Call 877-347-2760.



We can help you decide whether a conventional or government-backed mortgage is best for you. Call us at 410-750-0020, email us or apply now for a Howard Bank home loan.

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