A $400,000 mortgage at 6.75% instead of 7.125% cuts principal and interest by about $101 per month – roughly $6,060 over five years before taxes, insurance, payoff changes, or tax treatment. That matters when this loan program eligibility guide helps you qualify for a lower-cost option instead of forcing a fit with the wrong program.
By Duane Buziak, Mortgage Maestro, NMLS#1110647
This article is for educational purposes only and does not constitute financial or legal advice.
Table of Contents
- What this loan program eligibility guide actually answers
- Quick comparison table by program
- Credit score, down payment, and reserve rules
- How eligibility changes by borrower type
- Local market context in Virginia
- 5-step roadmap to check eligibility without wasting time
- Common lender differences that affect approval
- FAQ
What this loan program eligibility guide actually answers
Eligibility is usually not about one number. A 640 score can be enough for one borrower and not enough for another. A self-employed buyer in Glen Allen with strong bank deposits may fit a bank statement loan, while a W-2 buyer in Midlothian may qualify for conventional with less total cost over time. An investor near Short Pump may clear DSCR debt coverage but still miss reserve requirements.
The practical question is not, “Can I get a mortgage?” It is, “Which program matches my credit, income type, property, down payment, and timeline with the least friction and lowest realistic cost?”
Quick comparison table by program
| Loan program | Typical minimum credit score* | Typical down payment | Occupancy | Key eligibility notes | |—|—:|—:|—|—| | Conventional | 620 | 3% to 5% | Primary, second home, investment | Strongest fit for W-2 income and cleaner debt ratios | | FHA | 580 with 3.5% down | 3.5% | Primary only | More flexible on credit events and higher DTIs | | VA | Often 580 to 620 lender overlay | 0% | Primary only | Eligible veterans, active duty, some surviving spouses | | USDA | Often 640 | 0% | Primary only | Rural-eligible areas and household income limits apply | | Jumbo | Often 700+ | 10% to 20% | Primary, second, investment | Lower DTIs and stronger reserves usually required | | DSCR | Often 660+ | 20% to 25% | Investment only | Qualifies on property cash flow more than personal income | | Bank statement | Often 620 to 660 | 10% to 20% | Primary, second, investment | Uses business or personal deposits instead of tax returns | | Non-QM | Varies widely | 10% to 20% | Varies | Built for unique scenarios, but rates and fees can run higher |
*Minimums vary by lender overlay, property type, cash-out vs purchase, and loan size.
For baseline agency standards, review Fannie Mae at https://selling-guide.fanniemae.com, FHA through HUD at https://www.hud.gov, and VA eligibility guidance at https://www.va.gov/housing-assistance/home-loans.
Credit score, down payment, and reserve rules
The biggest mistake borrowers make is focusing only on rate. Approval usually starts with four moving parts: score, cash to close, reserves, and income documentation.
| Program | Common score threshold | Reserve expectation | Typical closing cost range | |—|—:|—:|—:| | Conventional conforming | 620+ | 0 to 2 months on many primary purchases | 2% to 5% | | FHA | 580+ | Often none on lower-risk primary scenarios | 2% to 6% | | VA | 580 to 620+ | Often none unless risk factors increase | 2% to 5% | | USDA | 640+ common | Usually limited reserve need | 2% to 5% | | Jumbo | 700+ common | 6 to 12 months often required | 2% to 5% | | DSCR | 660+ common | 3 to 12 months often required | 2% to 5% | | Bank statement | 620 to 660+ | 3 to 12 months often required | 2% to 5% |
Conforming loan limits matter too. In most U.S. counties, the 2025 baseline conforming limit is $806,500 according to the FHFA at https://www.fhfa.gov. If your loan amount runs above that, you may move into jumbo rules, where reserves, down payment, and score expectations usually tighten.
For first-time buyers, FHA can make sense when credit is bruised or debt-to-income is stretched. The trade-off is mortgage insurance that generally lasts longer than conventional PMI. Conventional can become cheaper if your score is stronger and you are putting at least 3% to 5% down. VA is often the most forgiving on down payment and monthly cost for eligible borrowers, but it is limited to military-connected households and subject to certificate and entitlement rules.
How eligibility changes by borrower type
A W-2 employee with stable salary is the easiest file in the stack. Two years of consistent employment, manageable debt, and enough assets for down payment plus closing costs can open conventional, FHA, and VA options quickly.
Self-employed borrowers are different. Tax returns may understate usable income because write-offs reduce qualifying income. That is where bank statement and other non-QM options matter. If you own a business in Richmond or operate as a contractor in Chesterfield, twelve or twenty-four months of deposits may tell a stronger story than your tax return alone. The trade-off is usually a higher rate and sometimes larger down payment.
For investors, DSCR loans are attractive because the property can qualify based on rent coverage rather than personal debt-to-income. If a Virginia Beach rental has a monthly PITIA of $2,400 and market rent supports $2,700, the DSCR is 1.125. Some lenders want 1.0 or better, others want more cushion depending on score, loan-to-value, and property type. Empty properties, short-term rental treatment, and condo restrictions can change the answer fast.
Local market context in Virginia
Eligibility is not separate from the market. In parts of Henrico County, buyers are still dealing with low inventory and quick decision windows, especially around Short Pump and Glen Allen for move-in-ready homes. That makes soft-pull prequalification more useful because you can check likely eligibility without adding a hard inquiry before you are ready.
For a real pricing anchor, Zillow reports the average Henrico County home value at roughly $397,000, which is a reasonable county-level median proxy for planning purposes, depending on month and methodology: https://www.zillow.com/home-values/51087/henrico-county-va/. That keeps many local purchases well inside conforming territory, but move-up buyers in Western Henrico or waterfront segments can hit jumbo thresholds faster than expected.
In Richmond-area neighborhoods near Libbie Mill, West End corridors, and select Midlothian subdivisions, competition still tends to be strongest for updated homes in the middle price bands. When inventory is tight, program fit matters because sellers and listing agents notice financing strength. Conventional and VA can both be strong, but the exact file quality matters more than the label.
5-step roadmap to check eligibility without wasting time
1. Start with the property and occupancy
A primary home, second home, and investment property do not underwrite the same way. USDA and VA are mainly owner-occupied tools. DSCR is for investment. Get this wrong at the start and every quote after that is noise.
2. Match your income type to the right documentation
W-2, self-employed, retired, commission-based, and investor income all fit different programs. If tax returns are weak but deposits are strong, a bank statement path may be more realistic than trying to force conventional.
3. Check score bands, not just your exact score
A borrower at 619 is not priced the same as one at 680. Even moving from 679 to 700 can change pricing and reserves on jumbo or non-QM. Pulling a soft inquiry first helps you see the likely lane without unnecessary credit damage.
4. Calculate full cash to close
Down payment is only part of it. Closing costs often run 2% to 5% of the purchase price, prepaid taxes and insurance add more, and reserves may be required after closing. A borrower with enough for 5% down may still be short overall.
5. Compare total cost, not just note rate
A slightly higher rate with lender credits can outperform a lower rate with heavy points if you may move or refinance within a few years. This is where fast, side-by-side analysis matters more than headline advertising.
Common lender differences that affect approval
Two lenders can look at the same borrower and give different answers because overlays are real. One lender may want a 620 score for VA while another is comfortable at 580 in a cleaner file. One may cap debt ratios lower on jumbo. Another may be more flexible on condo reviews or self-employed documentation.
That is where broker comparisons come in. Retail shops like Rocket or large branch lenders can be efficient for straightforward files, but unusual income, DSCR, or layered scenarios often benefit from broader program access. Local names borrowers may compare include Movement, C&F, Atlantic Coast, NFM, Veterans United, and CapCenter. The real difference is rarely the brand headline. It is whether the loan officer can match the file to the right guideline set quickly, explain trade-offs clearly, and close on time.
FAQ
Who qualifies for the lowest-down-payment option?
Eligible VA and USDA borrowers can access 0% down in many cases. Conventional can start at 3% down for qualifying primary buyers. FHA typically starts at 3.5% down.
Is FHA easier to qualify for than conventional?
Usually yes on credit flexibility and debt ratios. But FHA mortgage insurance can make it costlier over time for stronger-credit borrowers.
What score do I need for a jumbo loan?
Many jumbo approvals start around 700, though stronger pricing often comes at 720, 740, or higher. Reserve requirements are also much stricter than conforming.
Can I qualify if I am self-employed?
Yes, but the documentation path matters. Traditional tax-return qualification, bank statement loans, and other non-QM options all work differently.
Do investment properties use the same rules as primary homes?
No. Down payment, reserves, rates, and documentation are usually tougher on investment property loans.
Does prequalification hurt my credit?
A soft-pull prequalification generally does not affect your score, unlike a hard mortgage inquiry.
Are closing costs the same for every program?
No. Program fees, escrows, points, title charges, and seller credits all shift the final number. A realistic planning range is often 2% to 5%, but exact totals vary.
The right answer is rarely the flashiest loan ad. It is the program that fits your income, assets, property, and timeline with the fewest surprises at underwriting and the lowest realistic cost over the time you expect to keep it.
Duane Buziak, Mortgage Maestro | NMLS: 1110647 | Licensed in VA · FL · TN · GA | UWM PRO ELITE 2025 | UWM Top 20 Purchase LO Virginia 2025 | UWM Speed to Close Industry Leading 2025 | Scotsman Guide Top Originator 2025 & 2026 | VA Broker of the Year 2024-2025 | Top 1% Nationwide | Coast2Coast Mortgage | DuaneBuziakMortgageMaestro.com | duane@coast2coastml.com | (804) 212-8663