Conventional, FHA, VA, USDA: Which Home Loan Is Right for You in Spokane and North Idaho?
Conventional, FHA, VA, USDA: Which Home Loan Is Right for You in Spokane and North Idaho?
One of the first questions I get from buyers — especially first-timers — is some version of "what kind of loan should I get?" The honest answer is: it depends on your credit, your down payment, your military status, and where you're buying. Here's a plain-English breakdown of the four most common loan types and who each one is best for.
Conventional Loan
What it is: The most common loan type. Not backed by the government — it follows guidelines set by Fannie Mae and Freddie Mac and is funded by private lenders.
Who it's best for: Buyers with solid credit and some money saved for a down payment.
The basics for 2026:
- Minimum credit score: 620 (better rates above 740)
- Minimum down payment: 3% (though 5–20% is common)
- 2026 conforming loan limit: $832,750 for a single-family home (source)
- If you put down less than 20%, you'll pay Private Mortgage Insurance (PMI) until you reach 20% equity — then it drops off
- No location or income restrictions
The tradeoff: Stricter credit requirements than government-backed loans, but lower long-term costs if your credit is strong and you can put 20% down.
FHA Loan
What it is: A loan backed by the Federal Housing Administration (FHA), designed for buyers who don't have perfect credit or a large down payment.
Who it's best for: First-time buyers with lower credit scores or limited savings.
The basics for 2026:
- Minimum credit score: 580 for 3.5% down; 500 with 10% down
- Minimum down payment: 3.5%
- 2026 FHA loan limit in most counties: $541,287 for a single-family home (higher in some areas — check your county here)
- Requires mortgage insurance premium (MIP) — both upfront (1.75% of the loan, often rolled in) and monthly; for most borrowers this lasts the life of the loan
- No location or income restrictions
The tradeoff: Easier to qualify for, but mortgage insurance is more expensive long-term than conventional PMI and doesn't automatically drop off. Many buyers refinance into a conventional loan once they have equity to eliminate it.
One local note: In competitive markets like Spokane, some sellers are less enthusiastic about FHA offers because FHA appraisals have stricter property condition requirements. This doesn't disqualify you, but it's worth knowing going in.
VA Loan
What it is: A loan backed by the U.S. Department of Veterans Affairs, available exclusively to eligible veterans, active-duty service members, and surviving spouses.
Who it's best for: Any eligible military borrower — this is one of the best mortgage products available, full stop.
The basics for 2026:
- No down payment required
- No monthly mortgage insurance — ever
- No loan limit for borrowers with full VA entitlement
- One-time VA funding fee (typically 1.25%–3.3% of the loan, often rolled in; some borrowers are exempt)
- Minimum credit score varies by lender, typically 620
The tradeoff: For buyers with excellent credit putting 20%+ down, conventional can sometimes pencil out similarly — but for everyone else, VA almost always wins on total cost. If you've served and are eligible, use it.
Check eligibility and apply for your Certificate of Eligibility at VA.gov.
USDA Loan
What it is: A loan backed by the U.S. Department of Agriculture for homes in eligible rural and suburban areas. This one flies under the radar — a lot of buyers don't know it exists.
Who it's best for: Buyers purchasing outside urban centers who meet income limits and want zero down.
The basics for 2026:
- No down payment required
- Rates are typically lower than FHA and comparable to conventional
- Income limits apply: your household income must be at or below 115% of the area median income
- Property must be in a USDA-eligible area (many parts of Kootenai County and rural Spokane County qualify — check your address here)
- Mortgage insurance exists but is cheaper than FHA's (upfront guarantee fee of 1% + 0.35% annually)
- Primary residence only — no investment properties or vacation homes
The tradeoff: The income and location restrictions rule it out for some buyers, but if you qualify, it's an exceptionally affordable path to homeownership — especially for buyers looking at North Idaho or rural Spokane County properties.
Side-by-Side Snapshot
| Conventional | FHA | VA | USDA | |
|---|---|---|---|---|
| Down payment | 3–20% | 3.5% | 0% | 0% |
| Min. credit score | 620 | 580 | ~620 | ~640 |
| Mortgage insurance | PMI (drops at 20% equity) | MIP (life of loan) | None | Annual fee (life of loan) |
| Location restrictions | None | None | None | Rural/suburban only |
| Income limits | None | None | None | Yes |
| Who qualifies | Most buyers | Most buyers | Military only | Income-eligible buyers |
Which one is right for you?
- Strong credit, some savings: Conventional
- Lower credit or limited down payment: FHA
- Military or veteran: VA — don't leave this benefit on the table
- Buying outside Spokane or CDA proper, moderate income: Check USDA first
The best move is to get pre-approved and let a lender run your numbers across the loan types that apply to your situation — the monthly payment difference can be significant depending on your credit and down payment. I work with trusted local lenders in Spokane and North Idaho and am happy to connect you if you're not sure where to start.
Loan limits and program details reflect 2026 figures. Always confirm current requirements with your lender. Sources: FHA loan limits — HUD, VA home loans — VA.gov, USDA eligibility map, conforming loan limits — FHFA.
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