Choosing among the different types of home loans in Washington State gets easier when you separate four different decision layers. First, borrowers usually narrow down the core loan program, such as conventional, FHA, VA, or USDA, based on eligibility, down payment, and occupancy. Next comes the rate structure, usually fixed-rate versus ARM. Then loan size determines whether financing stays conforming or moves into jumbo territory, which can vary by county in Washington. Finally, some borrowers may need a more specialized path based on documentation style, property use, or timing—such as self-employed qualification, second-home financing, investor loans, or bridge financing. Not every option on this page is a mainstream primary-residence purchase loan, so this guide is designed to help you sort those categories clearly.
Homebuyers often feel overwhelmed by the many choices they have to make regarding their mortgage loans. In practice, most of the options on this page fall into four groups:
Using that framework can help you narrow your choices faster and avoid mixing mainstream homebuyer programs with more specialized products.
| Decision category | Loan types included | What this category helps you decide |
| Mainstream purchase loan programs | Conventional, FHA, VA, USDA | Your starting point for a primary-residence home purchase based on eligibility, down payment, and occupancy. |
| Rate structure choices | Fixed-Rate Mortgages, Adjustable-Rate Mortgages (ARMs) | How the interest rate and payment may behave over time. This decision is separate from the underlying loan program. |
| Loan-size categories | Conforming Loans, Jumbo Mortgage Loans | Whether your loan amount fits within conforming guidelines or requires jumbo financing, which can depend on county-specific limits in Washington. |
| Transition financing | Bridge Loans | Short-term financing for borrowers moving between homes or coordinating a sale and purchase. |
| Alternative-documentation owner-occupied options | Self-Employed Mortgages, 1099-Only Mortgage Loans, Bank Statement Loans, ITIN Loans, Asset-Based Loans, Interest-Only Loans | Specialty solutions when standard income documentation or qualification methods do not fit the borrower well. |
| Second-home financing | Second Home Loans | Financing for an additional property that is not your primary residence. |
| Investor-focused products | Non-QM Investor Loans, DSCR Loans, Long- and Short-Term Rental Loans | Financing built around investment-property use, rental income, or property cash flow rather than standard owner-occupied borrowing. |
There are three main types of government-backed mortgage loans available in Washington State — FHA, VA, and USDA. Conventional loans round out the main group of purchase options. These are usually the first categories borrowers compare when buying a primary residence.
FHA loans are provided by a mortgage lender but are insured by the federal government. This government insurance makes them unique from conventional or “regular” home loans.
There are two primary advantages to this program:
VA loans are available to military service members and their families. If you’re a military member in Washington State, it’s hard to beat this type of loan. This program allows eligible borrowers to purchase a home with no money down, and sometimes without mortgage insurance. Read our related article about VA loan limits in Washington State.
Are available to residents of rural areas who meet certain income guidelines. They are also referred to as Rural Development (RD) loans. The USDA Home Loans program is primarily intended for borrowers with low to moderate incomes. To learn more about this type of mortgage, visit USDA.gov.
Conventional loans are not insured or guaranteed by the federal government. This distinguishes them from the three types of Washington State home loans above (FHA, VA, and USDA). Conventional financing is often a strong fit for borrowers with solid credit profiles, and this type of mortgage can have either a fixed or an adjustable rate of interest, as discussed below.
In most cases, borrowers make these decisions in sequence rather than all at once. Start with occupancy and eligibility: are you buying a primary residence, second home, or investment property, and do you qualify for programs such as VA or USDA? Next, compare the main loan program families such as conventional, FHA, VA, and USDA. After that, choose how you want the rate to work by comparing fixed-rate and ARM options. Then confirm whether your loan amount stays within conforming limits or moves into jumbo financing based on the property’s county. Alternative-documentation and specialty options usually come later, if standard qualification is difficult or the property use calls for a more specialized solution.
When selecting a type of home loan in Washington State, you’ll also be able to choose between a fixed and adjustable mortgage rate. This is a separate decision from whether you use a conventional, FHA, VA, or USDA loan.
The fixed-rate mortgage carries the same interest rate for the entire term or “life” of the loan. Predictability and stability are the primary advantages with this type of loan. Because the rate stays the same, the monthly payments will remain fixed as well.
Fixed-rate mortgage loans are available in different lengths, with 15-year fixed-rate mortgages and 30-year fixed-rate mortgages being the most common. The 30-year FRM is by far the most popular type of home loan in Washington State.
The adjustable-rate mortgage has an interest rate that can change over time after an initial fixed period. For an ARM, the index is a market interest rate that fluctuates periodically, and the lender adds a margin to help determine future rate changes. Current agency ARM products are commonly tied to the Secured Overnight Financing Rate (SOFR) rather than older index references.
Most ARM loans today are hybrids that begin with a fixed rate for an initial period, often 3, 5, or 7 years. During that introductory phase, the rate does not change. Afterward, the rate can adjust at a predetermined interval, often once per year, subject to the terms of the loan.
The main advantage of an ARM is that the starting rate can be lower than a comparable fixed-rate mortgage. The tradeoff is payment uncertainty later on. If the index rises, the interest rate and monthly payment can increase when the loan adjusts. Borrowers considering an ARM should pay close attention to the initial fixed period, how often adjustments can occur, and the caps that limit how much the rate can change at each adjustment and over the life of the loan.
| Loan family | Typical borrower or use case | Occupancy type | Down payment flexibility | Mortgage insurance or guarantee-fee expectations | Documentation style |
| Conventional | Borrowers with solid credit profiles seeking a mainstream purchase loan | Commonly used for primary residences and other occupancy types depending on the program | Can include low-down-payment options | May require PMI with less than 20% down | Traditional income and asset documentation |
| FHA | Buyers needing a smaller down payment or more flexible qualification criteria | Primarily owner-occupied home purchases | Down payment can be as low as 3.5% | Government-insured loan with mortgage insurance costs | Standard documentation with more flexible qualification than many conventional loans |
| VA | Eligible military service members and families | Primarily owner-occupied home purchases | No down payment required for eligible borrowers | Sometimes without mortgage insurance | Standard documentation plus VA eligibility requirements |
| USDA | Eligible rural-area buyers meeting program income guidelines | Primary residence in an eligible rural area | No down payment required for eligible borrowers | Government-backed program with fees that differ from conventional PMI | Standard documentation with location and income eligibility rules |
| Jumbo | Buyers financing above conforming loan limits | Often used for higher-priced homes | Often less flexible than mainstream conforming options | Varies by loan structure and lender | Typically stricter documentation and qualification standards |
| Non-QM / alternative-documentation | Self-employed borrowers, ITIN borrowers, or others who do not fit standard documentation rules | Varies by program | Varies by program and borrower profile | Varies by program | Bank statements, 1099s, assets, ITIN, or other alternative documentation |
| Investor-focused loans | Real estate investors using rental income or property cash flow | Investment properties | Varies by property and program | Varies by program | Often emphasizes rental income, DSCR, or property performance |
If you are trying to narrow your options, start with the borrower scenario that sounds most like you:
Loan size is a separate decision layer from the core loan program. In Washington, whether a mortgage is conforming or jumbo depends on the loan amount relative to the conforming limit for the property’s county. That means the same borrower profile could be conforming in one part of the state and jumbo in another, especially in higher-cost areas.
Conforming loans meet the guidelines set by Fannie Mae and Freddie Mac, including maximum loan-size standards. If your loan amount falls within the applicable county limit, you stay in the conforming category. For exact Washington thresholds by county, see this guide to conforming loan limits.
Jumbo loans exceed the conforming limit for the county where the property is located. They are often associated with higher-priced homes, but the key distinction is loan size, not necessarily the type of property. Because they fall outside standard conforming guidelines, jumbo loans often come with stricter qualification standards, which can include stronger credit, larger reserves, or a larger down payment depending on the lender and loan structure.
These loan options are best understood as situational solutions rather than the default starting point for most Washington homebuyers. Some address nonstandard documentation, some support a transition between homes, and others are designed for second-home or investment-property use.
For borrowers buying a primary residence but struggling with standard income documentation, alternative-documentation programs may help after conventional, FHA, VA, or USDA qualification has been reviewed.
Self-employed loan options can use alternative income verification methods for entrepreneurs and freelancers whose tax returns or standard underwriting documents do not fully reflect their ability to repay. If you can qualify through traditional documentation, a mainstream conventional or government-backed loan may still be the simpler option.
A 1099-only loan is designed for independent contractors and gig workers who receive income through IRS Form 1099 rather than traditional W-2 wages. This option is most relevant when contractor income is easier to document through 1099s than through standard underwriting methods.
Bank statement loans allow borrowers to qualify using 12–24 months of personal or business bank statements instead of tax returns. They are commonly considered by self-employed borrowers with strong cash flow but limited traditional documentation.
ITIN loans are a type of non‑qualified mortgage (non‑QM) that let applicants use an Individual Taxpayer Identification Number in place of a Social Security Number. They are best understood as a specialty qualification path rather than a mainstream default option.
Asset-based loans use a borrower’s liquid assets—such as savings, investments, or retirement accounts—as the basis for qualification. This is generally most relevant for borrowers who prefer not to rely primarily on income documentation.
An interest‑only loan allows borrowers to pay just the interest for a fixed period, typically between 5 and 10 years. After this stage, the loan converts to a traditional repayment plan, requiring payments that cover both principal and interest for the rest of the term.
During the interest‑only stage, monthly payments are much lower than standard loans, though no equity is accumulated in the property. The loan balance does not decrease unless additional payments are made.
When the interest‑only period ends, principal repayment begins, often causing a significant jump in monthly costs. The size of this increase depends on the interest rate and the remaining loan duration.
A bridge loan is a type of short-term financing that provides temporary funds while you transition between buying a new home and selling your current one. It is typically repaid once long‑term financing is secured or the existing property is sold, making it a situational tool rather than a standard long-term mortgage choice.
A second home loan is used to purchase an additional property beyond your primary residence. You can use conventional loans, jumbo loans, or the equity from your primary residence to finance a second home purchase. For borrowers buying a primary residence, standard conventional or government-backed programs are usually the more relevant starting point.
These loans are generally built for investment properties, rental strategies, or property cash flow rather than owner-occupied home purchases.
Non-QM investor loans are designed for real estate investors who may not qualify for traditional mortgages due to unconventional income documentation or credit profiles. They often rely on property cash flow—such as rental income—rather than personal income.
Debt-Service Coverage Ratio (DSCR) loans focus on the income-generating potential of a property rather than the borrower’s personal finances. They are primarily designed for real estate investors, not for most owner-occupied purchase scenarios.
Short-term rental loans and long-term rental loans are tailored for buyers interested in short-term vacation rentals or long-term income properties. These are use-specific products for investment strategy rather than standard purchase loans for a primary residence.
Sammamish Mortgage can help. We serve clients across Washington, Idaho, Colorado, Oregon, and California. Since 1992, we’ve been providing several mortgage programs and products with flexible qualification criteria to borrowers across the Pacific Northwest. Visit our website to get an instant rate quote or to use our online mortgage calculator. Or, reach out to us if you are ready to get pre-approved for a mortgage.
Start with eligibility and occupancy. VA and USDA loans depend on borrower and property eligibility, while FHA and conventional loans are more broadly available. Then compare down payment needs, qualification flexibility, and ongoing mortgage insurance or program-fee costs.
Conventional loans may require PMI with less than 20% down. FHA loans include mortgage insurance costs, USDA uses program fees that differ from conventional PMI, and VA loans may be available without mortgage insurance for eligible borrowers.
Yes. Many first-time buyers compare FHA with low-down-payment conventional financing. FHA can help when qualification is tighter, while conventional may appeal to borrowers with stronger credit profiles.
The biggest differences are how the property will be occupied and how the loan is underwritten. Primary-residence loans are the mainstream homebuyer category, second-home loans apply to an additional personal-use property, and investment-property loans are typically underwritten more conservatively and may rely more heavily on rental-income analysis.
A jumbo loan becomes relevant when the amount you need to borrow exceeds the conforming loan limit for the property area. If your loan amount stays within conforming limits, conforming financing is usually the first category to compare.
It depends on the program. Bank statement and 1099-only loans are often aimed at self-employed or contract-income homebuyers, while DSCR and many non-QM investor loans are designed primarily for investment properties.
No. Many self-employed borrowers still qualify for conventional or government-backed loans. Alternative-documentation options are usually most helpful when standard tax-return-based underwriting does not reflect income well.
A fixed-rate mortgage keeps the same rate for the life of the loan, while an ARM starts with a fixed period and then can adjust based on market conditions and the loan terms. Fixed rates offer payment stability, while ARMs may offer a lower initial rate with more future payment risk.
Most options fall into four groups: government-backed and conventional purchase loans, rate structures such as fixed-rate mortgages and ARMs, loan-size categories such as conforming and jumbo loans, and specialty or alternative-documentation programs for self-employed borrowers, second homes, or investors.
Neither is universally better. FHA may fit borrowers who need a smaller down payment or more flexible qualification criteria, while conventional may be a strong fit for borrowers with solid credit profiles and can include low-down-payment options as well.
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