FHA vs VA vs Conventional Loan Underwriting Requirements: What Underwriters Check

FHA, VA, and Conventional loans are the three most common mortgage programs in the US, and they have meaningfully different underwriting requirements. The same borrower with the same file might clear one program and fail another. Understanding the differences is foundational for any underwriter or broker working across program types.

This guide covers the key underwriting criteria for each — credit score minimums, DTI limits, LTV thresholds, and the conditions most likely to flag during review.

FHA Loan Underwriting Requirements

FHA loans are government-backed through the Federal Housing Administration and are designed for borrowers with lower credit scores or limited down payments.

• Credit score minimum: 580 for 3.5% down; 500–579 requires 10% down
• DTI maximum: 43% standard; up to 50% with compensating factors
• LTV maximum: 96.5% (3.5% down payment)
• MIP required: Mortgage insurance premium — both upfront (1.75%) and annual
• Property requirements: Stricter than Conventional — appraiser notes health/safety deficiencies as conditions

Common FHA underwriting conditions: gaps in employment history, recent large deposits requiring sourcing, seller concession limits, property condition deficiencies (peeling paint, missing handrails, water damage), and manual downgrade triggers.

VA Loan Underwriting Requirements

VA loans are guaranteed by the Department of Veterans Affairs and are available to eligible veterans, active-duty service members, and qualifying surviving spouses. They have the most favorable terms of any major program.

• Credit score minimum: No VA-set minimum; lender overlays typically require 580–620
• DTI maximum: 41% benchmark; higher DTI with residual income compensation
• LTV maximum: 100% — no down payment required for eligible borrowers
• Funding fee: 1.25%–3.3% depending on service type and prior usage; waived for service-connected disability
• Residual income requirement: Unique to VA — net income after major expenses must meet regional thresholds

Common VA underwriting conditions: Certificate of Eligibility (COE) verification, residual income calculation, property MPR (Minimum Property Requirements) deficiencies, VA appraisal conditions, and funding fee documentation.

Conventional Loan Underwriting Requirements

Conventional loans conform to Fannie Mae/Freddie Mac guidelines (for conforming) or exceed them (jumbo). They have the strictest credit requirements but the most flexible property standards.

• Credit score minimum: 620 for most programs; 680+ for best pricing
• DTI maximum: 45% standard; up to 50% with DU/LP approval
• LTV maximum: 97% for first-time homebuyers (with PMI); 80% to avoid PMI
• PMI required: When LTV exceeds 80%; drops off automatically at 78% LTV
• Reserve requirements: Varies by loan size; 2 months PITI typical

Common conventional underwriting conditions: income stability (2-year history for self-employed), asset sourcing for large deposits, reserve verification, rental income documentation, and condo/HOA approval requirements.

USDA and Jumbo — The Other Two Programs

USDA loans are for rural and suburban properties and require no down payment but have geographic and income eligibility limits. DTI max is typically 41/41, and the property must be in a USDA-eligible area.

Jumbo loans exceed conforming loan limits ($806,500 in 2025 for most areas) and are held in lender portfolios rather than sold to Fannie/Freddie. They carry the strictest requirements: typically 700+ credit, 43% or lower DTI, and 6–12 months reserves.

Side-by-Side Comparison

Criterion	FHA	VA	Conventional	USDA	Jumbo
Min Credit Score	580 (500 w/ 10% down)	580–620 (lender overlay)	620	640 typical	700+
Max DTI	43–50%	41% (residual income)	45–50%	41/41%	43%
Max LTV	96.5%	100%	97%	100%	80–90%
Down Payment	3.5%	0%	3%	0%	10–20%
Mortgage Insurance	MIP (life of loan)	Funding fee (one-time)	PMI (drops at 78% LTV)	Guarantee fee	None typically

How DeepClerk Handles Multi-Program Files

Many files arrive without a clear program designation. DeepClerk analyzes the borrower profile against all five programs simultaneously and flags which programs the borrower qualifies for — and which conditions block each one. That means you're not just reviewing for one program, you're seeing the full picture in a single pass.

See it in action with the live demo, or review pricing if you're ready to run your own files.

Need a program-by-program reference? The free mortgage underwriting checklist covers all five programs with the key thresholds in one printable page.