Non-Conventional Mortgages
Government backed loans by FHA and VA
Non-Conventional Home Loans: FHA & VA Mortgage Options
At AAA Capital Funding, we’re here to help you purchase your dream home by offering a full suite of mortgage solutions tailored to your financial goals. This section is dedicated to explaining non-conventional mortgage loans, a category that includes both FHA and VA loan programs—two popular options backed by departments of the U.S. Federal Government.
This page is a combination explanation of FHA and VA loan products.
What Is a Non-Conventional Loan?
A non-conventional loan refers to any home loan that is guaranteed or insured by a government agency. Unlike conventional loans that are not federally backed, non-conventional mortgages offer flexible eligibility guidelines, low down payment options, and other benefits—making homeownership more accessible to a wider range of borrowers.
The two most common types of non-conventional loans are:
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FHA Loans (Federal Housing Administration)
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VA Loans (U.S. Department of Veterans Affairs)
FHA Loans – Affordable Home Financing with a Low Down Payment
An FHA loan, insured by the Federal Housing Administration, is one of the most popular loan options for first-time homebuyers and those with less-than-perfect credit. You can buy a home with as little as 3.5% down, and FHA loans feature flexible qualification standards.
It’s important to note that mortgage insurance is required on all FHA loans, regardless of your down payment amount. Even if you put more than 20% down, mortgage insurance remains in place unless you refinance into a conventional loan.
VA Loans – Exclusive Benefits for U.S. Military Veterans
VA loans, backed by the U.S. Department of Veterans Affairs, offer unmatched benefits to qualified veterans, active-duty service members, and certain military spouses. With 100% financing available, borrowers can purchase a home with no down payment and no monthly mortgage insurance—a benefit not found in other loan programs.
VA loans are not available to everyone; this program is exclusively for eligible veterans and military members who have served our country.
Key Benefits of FHA and VA Non-Conventional Loans
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VA loans: Up to 100% financing (no down payment required)
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FHA loans: Up to 96.5% financing (as little as 3.5% down)
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Low, fixed interest rates
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VA loans have no monthly mortgage insurance
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More flexible credit and income guidelines
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Loans are assumable (may be transferred to a qualified buyer)
Non-Conventional Loan Requirements
Minimum Credit Scores:
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FHA loan: Minimum credit score of 580
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VA loan: Minimum credit score of 550
We evaluate your credit score using the three major bureaus: Equifax, Experian, and TransUnion. Among the three scores, we use the middle score (not the highest or lowest) for determining loan eligibility and pricing.
Eligible Property Types
Both FHA and VA loans can be used to purchase:
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Single-family homes
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Townhomes and villas
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Multi-unit homes: duplex (2 units), triplex (3 units), quadplex (4 units)
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Condominiums (must be FHA- or VA-approved)
If purchasing a multi-unit property, you may live in one unit and use the projected rental income from the other units to help you qualify for the loan.
Income and Asset Verification
To ensure loan approval, we’ll verify your income and assets based on your employment status:
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Wage earners (W-2 employees): Provide the past two years of W-2 forms and a recent pay stub.
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Self-employed individuals: Submit your most recent two years of personal and business tax returns.
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Retired borrowers: Share documentation of Social Security, pension, or other retirement income.
We will also request bank statements to verify the funds needed for closing. Gift funds are allowed, as long as they come from a verifiable source. (Cash or untraceable funds are not permitted.)
Let AAA Capital Funding Guide You
Whether you’re exploring FHA financing with a low down payment or you’re a veteran eligible for a VA loan with zero down, AAA Capital Funding will walk you through the process and help you choose the best non-conventional loan option for your needs. Our experienced mortgage professionals are committed to helping you achieve homeownership with the best possible terms.
Non-Conventional Quick Facts
Minimum Score – VA | 550 |
Minimum Score – FHA | 580 |
Minimum Down Payment – VA | 0% |
Minimum Down Payment – FHA | 3.5% |
Pre-Payment Penalty | No |
Closing Cost Assistance | Yes |
Contact Us
Local: 954-390-7994
Toll Free: 1-888-601-8344
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