Unconventional Loans Buyers Should Consider Most homebuyers are unaware of their options when it comes to a mortgage. Many think they need a conventional mortgage, ensuring they have 20% of the home's purchase price on hand for a down payment and a good enough credit score to qualify. However, there are other options on the table. For those who might not have the funds up front or the credit history to qualify for a conventional mortgage, there are unconventional ones. FHA home loans. Homebuyers benefit by learning about the unconventional mortgage choices. Where someone might not qualify for a conventional mortgage loan, he or she might have no problem getting a loan backed by the Federal Housing Administration. And because these loans are backed by the federal government, lenders don't have to use the same stringent qualifications as conventional loans. Where some people with a less-than-perfect credit score would have trouble securing financing for a loan, the FHA has found a way for them to fulfill their dream of being a homeowner. In addition to having looser qualification standards, FHA loans don't require as high of a down payment. Homeowners can put as little as 3.5% down for these loans. FHA loans are also assumable, therefore they can be passed on to another buyer when it's time to sell. USDA home loans. The United States Department of Agriculture provides unconventional loans, offering benefits that are not awarded to the typical residential mortgages. Similar to FHA loans, USDA mortgages allow those without the best credit history to qualify for a loan. However, these loans are only issued for low- and very low-income areas in rural parts of the country. These loans also require no down payment whatsoever, making them a highly attractive option.