FHA, VA, Conventional, or USDA: What Your Buyer's Loan Type Actually Means for You as the Seller

Four Loan Types, Four Different Buyers

So what does it actually tell you when a buyer's pre-approval letter says FHA instead of conventional? More than most sellers assume. Four loan types cover almost every financed offer you'll see: FHA, VA, conventional, and USDA. Each one sets its own down payment floor and credit bar before a buyer ever gets to your door.

FHA loans require 3.5% down with a credit score of 580 or higher, or 10% down if the score falls between 500 and 579, under HUD's own program rules. VA loans require no down payment at all and carry no VA-set minimum credit score, though individual lenders commonly apply their own floor on top of that. Conventional loans allow as little as 3% down, but a credit score of 620 or higher is typically required to qualify, and anything under 20% down triggers private mortgage insurance. USDA loans also require zero down, but only for a property in a USDA-eligible rural or suburban area, and only for a household at or under the local income limit, $122,800 for a one-to-four-person household in most counties as of 2026.

The Three Things That Actually Change Your Risk as the Seller

Down payment size, property condition strictness, and the seller concession cap: those are the three numbers that actually matter once you're the one deciding whether to accept an offer.

Down payment size is a cash-cushion signal. A buyer putting 3.5% or 0% down is closer to the edge of their own budget than a buyer putting 20% down. If an appraisal comes in low or an unexpected repair shows up, a thin-margin buyer has less room to cover the gap out of pocket, which raises the odds you end up back at the negotiating table.

Property condition strictness decides whether your house itself has to clear a bar beyond its sale price. FHA and VA loans both require the property to pass a federal condition standard, not just support the price. Conventional and USDA appraisals check value; neither runs the same named pass/fail safety audit FHA and VA require.

The seller concession cap decides how much of the buyer's closing costs you can be asked to absorb without the lender rejecting the loan. That cap is set by loan type, not negotiated case by case, and it ranges from 3% of the price to 9%, depending on which of the four programs your buyer is using.

Why FHA and VA Appraisals Do Double Duty

An FHA or VA appraisal isn't only pricing your house. It's grading it. HUD's Single Family Housing Policy Handbook 4000.1 requires every FHA appraisal to confirm the property meets Minimum Property Standards for safety, security, and soundness, covering the roof, electrical system, plumbing, heating, and safe egress, on top of confirming market value. A VA appraisal runs a parallel two-part check under the VA's own Minimum Property Requirements, verified by a VA-approved appraiser.

That double duty is exactly why a home that would sail through a conventional sale can stall an FHA or VA buyer's financing three weeks into a contract. A dated panel cover or a roof nearing the end of its life can be a footnote on one appraisal and a stop on the other, for the same house, the same week.

Conventional and USDA appraisals still look at condition in a general sense, but neither runs FHA's or VA's named pass/fail standard. USDA does require the home to be safe, sanitary, and structurally sound as part of property eligibility, though that determination doesn't carry the same named MPS/MPR checklist FHA and VA appraisers are required to apply.

What a Seller Concession Actually Costs You, by Loan Type

A seller concession is money you agree to hand back to the buyer at closing to cover costs the buyer would otherwise pay, and every loan program caps how much of it a lender will allow. FHA and USDA both cap seller concessions at 6% of the purchase price. VA caps concessions at 4% of the reasonable value under the VA Lender's Handbook's excessive-concessions rule, though that 4% covers items like the funding fee, prepaid escrows, debt payoff, and discount-rate buydowns, not the buyer's ordinary closing costs, which fall outside the cap entirely. Conventional loans move on a sliding scale tied to the buyer's down payment: 3% of the price if the buyer puts down less than 10%, 6% between 10% and 24% down, and 9% at 25% down or more.

On a $350,000 sale, that range runs from $10,500 at the tightest cap to $31,500 at the widest, money that comes out of your proceeds at the closing table. Knowing which cap applies before you're three weeks into a contract is the difference between a number you planned for and one that surprises you.

Loan Limits Matter More the Higher Your House Is Priced

Every loan type except VA has a dollar ceiling above which it stops being that loan type. FHA's 2026 national limits run from a $541,287 floor to a $1,249,125 ceiling in high-cost areas, for FHA case numbers assigned on or after January 1, 2026, per HUD. Conventional loans follow the Federal Housing Finance Agency's conforming loan limit, set at an $832,750 baseline for 2026, an increase of $26,250 from 2025, with the same $1,249,125 ceiling in high-cost counties. A home priced above whichever ceiling applies in your county pushes a conventional buyer into jumbo financing instead, which typically requires 10% to 20% down, a credit score of 700 or higher, and 6 to 12 months of mortgage payments held in reserve.

VA loans work differently. The Blue Water Navy Vietnam Veterans Act eliminated the VA loan limit for a veteran buyer with full entitlement starting January 1, 2020, so that buyer can borrow above the conforming ceiling with no down payment, as long as the lender approves the amount. If your home is priced near the top of your county's conforming range, the buyer's loan type can be the reason financing gets tighter, not the price itself.

Where Cash Flow Deals Fits

The certainty you actually want here isn't a higher number. It's knowing what your buyer's financing means for your closing before it has a chance to move your closing date.

Cash Flow Deals is a Florida real estate investor that locks in a net price for a seller's house before repairs are scoped, using a novation-based, flat-fee process arranged through its licensed FL brokerage partner, Silver Door Realty — not a traditional listing, and not a brokerage itself.

Think of it like a relay handoff, not a resale: your price locks with Cash Flow Deals before a buyer's loan type, appraisal outcome, or concession request ever enters the picture, then the contract passes to Silver Door Realty's closing team to bring a real financed buyer to the table.

1. Net price: locked in writing at signing, before the buyer's lender assigns a loan type or orders an appraisal.

2. Buyer financing: Cash Flow Deals connects your home with a real FHA, conventional, VA, or USDA-eligible buyer, whose lender still runs its own appraisal and condition check as required by that program.

3. Closing: handled through Title Guaranty of South Florida on the buyer's loan timeline, with your signed number holding regardless of which loan type's condition standard the appraiser applies.

The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens.