How do I know which loan program is right for me?

Start with four questions: How do you document income? What type of property is it? Will you live in it? And what's your credit profile? Those answers typically narrow 48+ programs down to two or three realistic options — which a licensed loan officer can then compare for you side by side with real numbers.

Is a DSCR loan better than a bank statement loan?

Neither is "better" — they serve different needs. DSCR loans qualify based on a rental property's income and are for investment properties only. Bank statement loans qualify based on your deposits and can be used for a primary residence. The right choice depends on the property and how your income is best documented.

Should a first-time homebuyer choose FHA or conventional?

It typically comes down to credit and cash. FHA is often the fit for lower credit scores or higher debt ratios; conventional often wins for strong-credit borrowers because PMI can be removed as equity grows. Comparing both with actual pricing is the only way to know which saves you more.

Can I switch loan programs after I apply?

Often yes, especially early in the process. If your appraisal, credit review, or income documentation makes another program a better fit, your loan officer can typically restructure the file — though timelines and terms may change, so it's best to land on the right program up front.

Which loan programs allow the smallest down payment?

VA loans allow 0% down for eligible veterans. Conventional programs can go as low as 3% for qualifying first-time buyers, and FHA typically requires 3.5%. Down payment assistance programs may reduce out-of-pocket costs further for eligible Florida buyers. Non-QM and investor programs typically require more.

Why do investment property loans require larger down payments?

Lenders price and structure loans based on risk, and rental properties historically carry more of it. That's why investment loans often require 15–25% down and carry somewhat higher rates than owner-occupied financing — the equity cushion offsets the added risk.

Do jumbo loans always require 20% down?

Not always. Depending on the lender, loan size, credit profile, and reserves, jumbo options may be available with around 10% down. Larger loan amounts and more complex income typically require more equity, stronger credit, and deeper reserves.

What's the real cost difference between FHA and conventional mortgage insurance?

FHA charges an upfront premium plus monthly MIP that, with the minimum down payment, typically lasts for the life of the loan. Conventional PMI is monthly only and can usually be removed once you reach sufficient equity. Over many years, that removability is often what makes conventional cheaper for strong-credit borrowers.

Can I get a mortgage without tax returns?

Yes — that's exactly what Non-QM programs are for. Bank statement loans use 12–24 months of deposits, DSCR loans use rental income, and asset depletion loans convert savings and investments into qualifying income. Each has its own guidelines, so the right fit depends on your situation.

How many months of bank statements do I need for a bank statement loan?

Most programs use 12 or 24 months of personal or business bank statements. Longer statement periods can smooth out seasonal swings in deposits, which sometimes produces a higher qualifying income for seasonal businesses.

What is asset depletion and who uses it?

Asset depletion (sometimes called asset utilization) divides your eligible liquid assets over a set period to create a monthly qualifying income. It's popular with retirees, high-net-worth borrowers, and people who recently sold a business — anyone who is asset-rich but shows little traditional income.

What credit score do I need for a DSCR loan?

Guidelines vary by lender and program, but DSCR pricing and down payment requirements typically improve with stronger credit. Many programs also weigh the DSCR ratio itself — a property whose rent comfortably covers the payment can offset other risk factors.

Can foreign nationals buy investment property in Florida?

Yes. Foreign national loan programs are designed for non-U.S. residents and typically don't require a Social Security number or U.S. credit history. Expect a larger down payment — often 25–30% — and documentation of foreign income or assets, depending on the program.

Why is condotel financing harder to get?

Condotels operate like hotels, which makes them non-warrantable — ineligible for standard conventional and FHA financing. They're financed through Non-QM and portfolio programs instead, usually with larger down payments. A lender experienced with non-warrantable projects can pre-review the building before you commit.

Can I use rental income from a second home to qualify?

Generally no. Second-home financing requires you to qualify on your own income, and the property must be for your personal use. If rental income is central to your plan, the property should be financed as an investment property — where programs like DSCR can actually use that income to help you qualify.

Let's Compare Mortgage Loan Programs Side by Side

Loan Comparison Guide

The Right Mortgage Depends on You, Not the Other Way Around

There is no single "best" mortgage. The right program depends on your goals, how you document income, the type of property you're buying, your credit profile, and your timeline. A self-employed business owner, a veteran, a foreign national investor, and a first-time homebuyer may all be well qualified — yet each may be best served by a completely different loan. The comparisons below explain the real differences in plain English so you can identify the option that may fit your situation, then talk with a licensed mortgage professional to confirm the details.

Jump to a comparison

01. DSCR vs Bank Statement Loans
02. FHA vs Conventional Loans
03. VA vs FHA Loans
04. Hard Money vs DSCR Loans
05. Jumbo vs Conventional Loans
06. Foreign National vs ITIN Loans
07. Asset Depletion vs Bank Statement Loans
08. Interest-Only vs Fully Amortizing Loans
09. Condotel vs Condo Financing
10. Investment Property vs Second Home Loans

Comparison 01

DSCR vs Bank Statement Loans

Both are popular Non-QM options for borrowers who don't qualify with tax returns — but they work very differently. A DSCR loan qualifies based on the property's rental income, while a bank statement loan qualifies based on your cash flow shown in bank deposits.

At a Glance	DSCR Loan	Bank Statement Loan
How you qualify	Property's rental income vs the mortgage payment (Debt Service Coverage Ratio)	12–24 months of personal or business bank statement deposits
Income documents	Typically no personal income docs, tax returns, or employment verification	No tax returns; bank statements substitute for W-2s and 1040s
Property types	Investment properties only (long-term or short-term rentals)	Primary homes, second homes, and investment properties
Typical down payment	Often 20–25%, depending on credit and DSCR ratio	Often 10–15%+, depending on credit and program
Best-known for	Investors scaling rental portfolios, often closing in an LLC	Self-employed borrowers, business owners, 1099 contractors
Common use case	Buying or refinancing a rental where the rent covers the payment	Buying a primary home when tax write-offs reduce reported income

A DSCR loan may fit you if…

You're buying or refinancing a rental property, not a home you'll live in
You'd rather keep personal income and tax returns out of the file
You may want to close in an LLC or grow a portfolio of multiple rentals

A bank statement loan may fit you if…

You're self-employed and your tax returns understate your true cash flow
You're buying a primary residence or second home, not just a rental
Your deposits show steady, healthy business or personal income

Which one should I choose?

Choose the loan that matches the property and the income story. If the property is a rental and its income can carry the payment, DSCR is usually the cleaner path. If you're self-employed and buying a home to live in, a bank statement loan typically fits better. Many investors end up using both — a bank statement loan for their residence and DSCR loans for their rentals.

Learn more: DSCR Loans·Bank Statement Loans

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Comparison 02

FHA vs Conventional Loans

This is the most common comparison for first-time homebuyers. FHA loans are government-insured and forgiving on credit; conventional loans can cost less over time — especially once you can remove mortgage insurance.

At a Glance	FHA Loan	Conventional Loan
Minimum down payment	Typically 3.5% with qualifying credit	As low as 3% for qualifying first-time buyers; often 5%
Credit flexibility	More forgiving of lower scores and past credit events	Generally rewards stronger credit with better pricing
Mortgage insurance	Upfront MIP plus monthly MIP; with minimum down, monthly MIP typically remains for the life of the loan	PMI can typically be removed once you reach sufficient equity (often around 20%)
2026 loan limits (typical)	Floor of $541,287 in most areas; up to $1,249,125 in high-cost areas	Baseline of $832,750; up to $1,249,125 in high-cost areas
Property standards	FHA appraisal includes minimum property condition requirements	Standard appraisal; generally more flexible on condition
Occupancy	Primary residence only	Primary, second home, or investment property

FHA may fit you if…

Your credit score is on the lower side or still recovering
You have limited savings and need the smaller down payment to work harder
Your debt-to-income ratio is higher than conventional guidelines typically allow

Conventional may fit you if…

Your credit is strong and you want the lowest long-term cost
You plan to remove mortgage insurance as your equity grows
You're buying a second home or investment property (FHA won't allow it)

Which one should I choose?

As a rule of thumb: weaker credit or higher debt ratios often point to FHA, while strong credit often points to conventional — because cancellable PMI and credit-based pricing can save thousands over the life of the loan. The math flips from borrower to borrower, so it's worth running both side by side before you commit.

Learn more: FHA Loans·Conventional Loans

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Comparison 03

VA vs FHA Loans

If you're an eligible veteran, active-duty service member, or surviving spouse, the VA loan is often one of the strongest benefits you've earned — but FHA can still make sense in certain situations.

At a Glance	VA Loan	FHA Loan
Who's eligible	Eligible veterans, active-duty members, certain National Guard/Reserve members, and surviving spouses	Any qualifying borrower
Down payment	0% down for eligible borrowers with full entitlement	Typically 3.5% minimum
Monthly mortgage insurance	None	Monthly MIP, typically for the life of the loan with minimum down
Upfront fee	VA funding fee (varies by usage and down payment; may be waived for veterans with qualifying service-connected disability)	Upfront MIP of 1.75% of the loan amount
Credit flexibility	Flexible; guidelines vary by lender	Flexible; well suited to lower scores
Occupancy	Primary residence only	Primary residence only

VA may fit you if…

You're eligible and want to buy with little or no money down
You want to avoid monthly mortgage insurance entirely
You may qualify for a funding fee exemption due to a service-connected disability

FHA may fit you if…

You're not VA-eligible, or your VA entitlement is tied up in another property
A co-borrower who isn't a veteran or spouse needs to be on the loan
The specific transaction fits FHA guidelines better in your scenario

Which one should I choose?

For most eligible veterans, the VA loan wins on the numbers: no down payment requirement and no monthly mortgage insurance are hard to beat. FHA typically enters the picture when eligibility, entitlement, or co-borrower circumstances make VA impractical. If you're eligible for both, compare total monthly cost and cash to close before deciding.

Learn more: VA Loans·FHA Loans

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Comparison 04

Hard Money vs DSCR Loans

Both serve real estate investors, but they solve different problems. Hard money is about speed and short-term flexibility; DSCR is about long-term rental financing. Many investors use them in sequence — hard money to acquire and renovate, then a DSCR refinance to hold.

At a Glance	Hard Money Loan	DSCR Loan
Loan term	Short-term, often 6–24 months	Long-term, commonly 30-year options
Primary basis for approval	The asset itself — purchase price, condition, and after-repair value	The property's rental income vs its mortgage payment
Speed to close	Often very fast — days to a couple of weeks in many cases	Typically faster than full-doc loans, slower than hard money
Cost profile	Higher rates and points in exchange for speed and flexibility	Generally lower rates than hard money for stabilized rentals
Common use case	Fix-and-flip, bridge financing, auction purchases, heavy rehab	Buy-and-hold rentals, cash-out or rate/term refinances
Exit strategy	Sell the property or refinance into long-term financing	Hold and collect rent; the loan is the long-term financing

Which one should I choose?

Match the loan to your hold period. Flipping in under a year, or buying a property that won't pass a standard appraisal yet? Hard money. Keeping the property as a rental? DSCR. The classic investor play — often called BRRRR — is to buy and renovate with hard money, then refinance into a DSCR loan once the property is rented and stabilized.

Learn more: Hard Money Loans·DSCR Loans

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Comparison 05

Jumbo vs Conventional Loans

The dividing line is the conforming loan limit. For 2026, the baseline conforming limit is $832,750 in most areas (up to $1,249,125 in designated high-cost areas). Borrow above the limit for your county and you're in jumbo territory — where guidelines change.

At a Glance	Conventional (Conforming)	Jumbo Loan
Loan amount	At or below the conforming limit for the county	Above the conforming limit
Backing	Eligible for purchase by Fannie Mae / Freddie Mac	Held or sold outside the conforming system; lender guidelines vary more
Typical down payment	As low as 3–5% for qualifying borrowers	Often 10–20%, depending on loan size and profile
Credit expectations	Flexible range with risk-based pricing	Generally higher score expectations
Reserves	Often modest, depending on the file	Often several months of payments in reserves, sometimes more
Documentation	Standard full documentation	Full documentation, often with closer scrutiny of assets and income

Which one should I choose?

You usually don't choose — the purchase price and your down payment decide for you. That said, buyers near the limit have options: a slightly larger down payment can sometimes bring the loan amount under the conforming limit, which may improve pricing and flexibility. If you're firmly in jumbo range, plan for stronger credit, deeper reserves, and a more detailed review of your finances.

Learn more: Jumbo Loans·Conventional Loans

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Comparison 06

Foreign National vs ITIN Loans

Neither program requires a Social Security number — but they serve very different borrowers. Foreign national loans are built for non-residents investing in U.S. property; ITIN loans serve borrowers who live and work in the U.S. and file taxes with an Individual Taxpayer Identification Number.

At a Glance	Foreign National Loan	ITIN Loan
Who it serves	Non-U.S. residents buying U.S. property, often from abroad	U.S. residents without an SSN who file taxes with an ITIN
U.S. credit required	Typically no; international credit or reference letters may be used	Alternative or limited U.S. credit often accepted (rent, utilities, etc.)
Income documentation	Foreign income docs, CPA letters, or asset-based options depending on program	Tax returns filed with ITIN, W-2s/1099s, or bank statement options
Typical down payment	Often 25–30%	Often 15–25%, depending on program and credit
Occupancy	Usually second homes and investment properties	Often primary residences, plus other occupancy types by program
Visa/status notes	Valid passport and visa documentation typically required	ITIN card/letter and consistent tax filing history typically required

Which one should I choose?

It comes down to where you live. If you live abroad and want a Florida vacation home or rental property, the foreign national program is designed for you. If you live and work in the U.S., pay taxes with an ITIN, and want to buy the home you live in, the ITIN program is the fit. The documentation paths are different enough that starting in the right lane saves real time.

Learn more: Foreign National Loans·ITIN Loans

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Comparison 07

Asset Depletion vs Bank Statement Loans

Both let you qualify without traditional tax-return income — the difference is what proves your ability to repay. Asset depletion converts your savings and investments into qualifying income; bank statement loans use the cash flowing through your accounts.

At a Glance	Asset Depletion Loan	Bank Statement Loan
How income is calculated	Eligible liquid assets are divided over a set term to create a monthly "income" figure	Average monthly deposits over 12–24 months, often with an expense factor for business accounts
Ideal borrower	Retirees, high-net-worth individuals, recent business sellers — asset-rich, income-light	Actively self-employed borrowers with strong ongoing deposits
What you document	Investment, retirement, and bank account statements	Personal or business bank statements
Employment required	Not necessarily — assets do the qualifying	Ongoing self-employment or business activity, typically 2 years
Best for	Borrowers whose wealth sits in portfolios rather than paychecks	Borrowers whose tax returns understate real cash flow

Which one should I choose?

Follow the money. If your strength is a large portfolio of savings and investments — but little reportable monthly income — asset depletion is built for you. If your strength is steady deposits from an active business, bank statements will usually produce the higher qualifying income. Some borrowers qualify under both; in that case, compare which method supports the loan amount you actually need.

Learn more: Asset Depletion Loans·Bank Statement Loans

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Comparison 08

Interest-Only vs Fully Amortizing Loans

This isn't a loan program so much as a payment structure — and it changes the math significantly. Interest-only options appear most often on Non-QM, DSCR, and jumbo loans.

At a Glance	Interest-Only	Fully Amortizing
Monthly payment (initial)	Lower — you pay interest only during the IO period (often the first 5–10 years)	Higher — every payment includes principal and interest
Principal reduction	None during the IO period unless you pay extra voluntarily	Built into every payment from day one
Payment later	Increases when the IO period ends and the loan re-amortizes over the remaining term	Stays consistent on a fixed-rate loan
Equity building	Relies on appreciation and voluntary principal payments	Steady equity growth through scheduled principal paydown
Who typically uses it	Investors maximizing cash flow; borrowers with variable income	Most homeowners planning to stay long term
Where it's offered	Commonly on DSCR, Non-QM, and jumbo programs	Standard across virtually all loan programs

Which one should I choose?

Interest-only is a cash-flow tool, not a discount — you'll still owe the principal. It can make sense for an investor maximizing monthly rental cash flow, or a borrower with lumpy income who wants a lower required payment with the option to pay more. If your goal is to own your home outright and build equity predictably, fully amortizing is the straightforward choice.

Learn more: DSCR Loans·Jumbo Loans

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Comparison 09

Condotel vs Condo Financing

In Florida, this comparison matters more than almost anywhere else. A condotel — a condo that operates like a hotel, with a rental desk, short-term stays, or hotel-style amenities — is generally considered non-warrantable, which puts it outside standard conventional and FHA financing.

At a Glance	Condotel (Non-Warrantable)	Warrantable Condo
What it is	Condo unit in a project with hotel-like operations: front desk, daily rentals, rental pooling	Condo project meeting Fannie/Freddie eligibility standards
Financing available	Non-QM / portfolio loan programs	Conventional, FHA (if approved), VA (if approved), jumbo
Typical down payment	Often 25%+	As low as 3–5% conventional for primary residences
Rate environment	Generally higher than warrantable condo financing	Standard market pricing
Typical buyer	Investors and second-home buyers wanting rental income from short-term stays	Primary residents, second-home buyers, long-term investors
Key diligence	Project review: rental program, HOA finances, litigation, insurance	Standard condo project review

Which one should I choose?

Usually the property chooses for you — the same building is either warrantable or it isn't. What you can choose is to find out before you fall in love with a unit. If the project is a condotel, plan for a larger down payment and Non-QM financing, and weigh that against the short-term rental income potential. If it's warrantable, the full menu of standard loan programs is open to you.

Learn more: Condotel Financing·Conventional Loans

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Comparison 10

Investment Property vs Second Home Loans

These two are often confused — and the difference matters, because occupancy affects your down payment, your rate, and your legal obligations. A second home is for your use; an investment property is for income.

At a Glance	Investment Property	Second Home
Primary purpose	Generating rental income or long-term appreciation	Personal use — a place you and your family enjoy
Occupancy rules	You do not need to occupy it — tenants live there	Must be reasonably distant from your primary and available for your personal use; not a full-time rental
Typical down payment	Often 15–25%, depending on units and program	Often 10–15% for qualifying borrowers
Rate & pricing	Higher than owner-occupied to reflect added risk	Similar to primary-residence pricing on conventional loans
Using rental income to qualify	Yes — programs like DSCR let rent drive the approval	Generally no; you must qualify on your own income
Programs available	Conventional investor, DSCR, Non-QM, portfolio	Conventional, jumbo, some Non-QM

Which one should I choose?

Be honest about how you'll really use the property — occupancy is a certification you sign, and misrepresenting it is mortgage fraud. If the home is genuinely for your family's use with occasional rental on the side, discuss whether second-home guidelines fit. If the plan is income first, finance it as an investment property from the start — you'll also unlock programs like DSCR that use the rent itself to qualify you.

Learn more: Investor Loans·DSCR Loans

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Loan Comparison FAQs

Straight answers to what borrowers ask most

Choosing Between Programs

Down Payments & Costs

Self-Employed & Alternative Documentation

Investors & Specialty Properties

Every Loan Scenario Is Unique

Mortgage guidelines are not one-size-fits-all. Down payment requirements, credit expectations, rates, and documentation vary by lender, borrower profile, property type, occupancy, and market conditions — and they change over time. The comparisons in this guide describe how these programs typically work, not a commitment to specific terms.

As a direct mortgage lender with 48+ loan programs, 1st Florida Lending can compare multiple options in-house — including the Non-QM and investor programs many banks don't offer.

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1st Florida Lending · NMLS #XXXXX · Equal Housing Lender

Educational content only. Not a commitment to lend. Loan approval is subject to credit review, income verification, and property qualification. Rates, terms, and program guidelines are subject to change without notice. 1st Florida Lending is an Equal Housing Lender licensed in Florida.