As has already been mentioned, VA is the only option available that offers a loan without mortgage insurance when putting less than 20% down.
What is available is various options on conventional loans to address private mortgage insurance but you're still paying it one way or another.
LPMI or lender paid PMI - is an option where the lender pays the PMI but in order to do that, the lender charges you a higher interest rate to cover it. The down side to this option (in my humble opinion) is that your rate is never going to go down unless you spend thousands of dollars to refinance it where as eventually the PMI will drop off at no cost to you.
Split premium PMI - This option is set up like FHA where you pay a portion of the PMI upfront and that reduces the amount you pay monthly. Overall not a bad option.
MCM - The my community mortgage program offers reduced down payment requirements and reduced monthly mortgage insurance. This one is for first time home buyers so if you've owned a home in the last 3 years you wouldn't be eligible. There are a couple of additional down sides with this one. The program has income limits like the USDA program but you're not limited to rural properties like USDA. The other issue is the LLPAs or loan level price adjusters can be on the high side which will push your interest rate up.
USDA is great option for a number of reasons. You do not have to be a first time buyer to qualify but it does have county income limits and the home has to be located in an eligible area.
One of the best things about this mortgage is the monthly mortgage insurance is substantially less than an FHA or conventional mortgage and that's with no money down.
Here's an example: An FHA mortgage of $155,000 is going to have a monthly mortgage insurance payment of $161.45 but on a USDA mortgage it's only going to add $51.66 to your monthly payment.
The other nice thing is you can actually roll your closing costs into the loan as long as the appraised value supports it.
Please feel free to contact me for more information or help. You can also find info on my USDA Mortgage website by clicking the link below.
Senior Mortgage Banker
Peoples Bank & Trust