Mortgage Options Explained: Conventional, FHA, VA, Jumbo and More (2026)

Choosing a mortgage can feel like learning a new language. Conventional, FHA, VA, jumbo, fixed, adjustable, PMI, MIP: each one changes how much cash you need and what you pay every month. This guide explains the main loan types in plain language, with the 2026 loan limits for the Greater Boston counties our team serves most.

Conventional loans

A conventional loan is not insured by the government. Most are “conforming,” which means they follow Fannie Mae and Freddie Mac rules and stay under the conforming loan limit.

• Down payment: as little as 3% with programs like Fannie Mae HomeReady, Freddie Mac Home Possible and Freddie Mac HomeOne. Our first-time buyer programs guide explains who qualifies.
• Mortgage insurance: private mortgage insurance (PMI) if you put down less than 20%. It can be removed later.
• Good fit for: buyers with solid credit, and buyers who want mortgage insurance that goes away.

2026 loan limits for Greater Boston

For 2026, the national baseline conforming limit for a one-unit home is $832,750, and the high-cost ceiling is $1,249,125. Suffolk, Middlesex, Essex, Norfolk and Plymouth counties are all in the Boston metro area and share the same 2026 limits. In these five counties, the 2026 FHA limits are the same as the conforming limits.

The limit applies to the loan amount, not the price. For example, with 20% down you could buy a single-family home for up to about $1.2 million and still stay at the $962,550 conforming limit. The higher limits for 2- to 4-family homes are one reason many buyers in Chelsea, Everett, Revere and Lynn look at owner-occupied multi-families. FHFA usually announces the next year’s limits in late November, and we update this guide when it does.

Jumbo loans

A jumbo loan is any loan above the conforming limit for your county. Jumbo lenders set their own rules, which often means higher credit scores, larger down payments and more savings left after closing. Rates can be close to conforming rates or different, so compare quotes.

FHA loans

FHA loans are insured by the Federal Housing Administration.

• Down payment: 3.5% with a credit score of 580 or higher; 10% with a score from 500 to 579. Many lenders set higher minimums.
• Mortgage insurance (MIP): an upfront premium of 1.75% of the loan (usually added to the loan) plus an annual premium, which is 0.55% for most borrowers.
• How long MIP lasts: for the life of the loan if you put down less than 10%; 11 years if you put down 10% or more. Refinancing into a conventional loan later is the usual way to remove it.
• Good fit for: buyers who are rebuilding credit or have a smaller down payment, including buyers of 2- to 4-family homes they will live in.

VA loans

VA loans are for eligible veterans, service members and some surviving spouses.

• Down payment: often none. With full entitlement there is generally no VA loan limit, as long as you qualify and the appraisal supports the price.
• No monthly mortgage insurance.
• VA funding fee for purchases: 2.15% of the loan on first use with less than 5% down (3.3% after first use), 1.5% with 5% or more down, and 1.25% with 10% or more down. Veterans who receive VA disability compensation, and some others, do not pay it.

Read our guide for veterans for more.

USDA loans

USDA guaranteed loans can offer no-down-payment financing for moderate-income buyers in eligible rural areas. Because eligibility is based on the property’s location, they rarely fit homes in Boston-area cities. If you are looking farther out, a lender can check a specific address on USDA’s eligibility map.

Fixed-rate vs. adjustable-rate mortgages

For context, Freddie Mac’s weekly survey showed average rates of 7.24% for a 30-year fixed and 6.60% for a 15-year fixed on October 29, 2026. A 15-year loan has a lower rate and builds equity faster, but the monthly payment is much higher.

PMI vs. MIP at a glance

Some Massachusetts programs, like ONE Mortgage, have no PMI at all, which can make them cheaper month to month.

How to choose

1. Get quotes for at least two loan types on the same day so you can compare fairly.
2. Compare the full monthly payment, including mortgage insurance, and the cash needed to close.
3. Think about how long you will keep the home.
4. Run the numbers in our mortgage calculator and read our credit and pre-approval guide.

How Luis can help

Luis and our team can explain how each loan type affects your offer and your search, in English or Spanish, and introduce you to lenders who offer FHA, VA, conventional and Massachusetts programs. Book a free 15-minute call to talk through your options.