VA Loan Guide
VA vs. FHA vs. Conventional Loans
Mike Starr
Founder, MortgageWizardTools · M.S. Organizational Management
The Three Main Loan Types
Most homebuyers choose among three primary mortgage categories: VA loans (available to eligible service members and veterans), FHA loans (government-backed, broadly available), and conventional loans (privately backed, not government-insured). Understanding the differences between them helps you make the most informed decision — and for veterans, often reveals just how powerful the VA benefit really is.
Full Comparison Table
| Feature | VA Loan | FHA Loan | Conventional |
|---|---|---|---|
| Who can use it | Eligible veterans, active duty, surviving spouses | Most borrowers | Most borrowers |
| Min. down payment | 0% | 3.5% (580+ score) / 10% (500–579) | 3% (first-time) / 5% (repeat) |
| Min. credit score | No VA minimum; lenders ~580–620 | 500 (with 10% down); 580 (3.5% down) | 620 |
| Mortgage insurance | None (funding fee instead) | MIP: 1.75% upfront + 0.55–1.05%/yr | PMI if < 20% down; removable at 80% LTV |
| Upfront fee | 1.25%–3.30% funding fee (may be financed) | 1.75% MIP (always added to loan) | None |
| Loan limits | No limit with full entitlement | County-based FHA limits | Conforming limits (higher with jumbo) |
| DTI limit | 41% guideline (higher OK with residual income) | Up to 57% in some cases | 43–45% standard; 50% with DU approval |
| Property requirements | VA Minimum Property Requirements (MPRs) | FHA health and safety standards | No special requirements |
| Assumable | Yes (by eligible borrowers) | Yes | Generally no |
| Refinance options | IRRRL (streamline), cash-out | FHA Streamline, cash-out | Rate/term, cash-out |
| Best for | Veterans who qualify — almost always the best option | Buyers with lower credit / limited down payment | Buyers with good credit and 20%+ down |
VA Loan: Pros & Cons
Pros
Cons
FHA Loan: Pros & Cons
Pros
Cons
Conventional Loan: Pros & Cons
Pros
Cons
Which Loan Is Right for You?
Choose VA if:
You are an eligible veteran, active-duty service member, or qualifying surviving spouse. In almost every scenario, the VA loan offers the best combination of rate, monthly payment, and long-term cost. Use your benefit.
Choose FHA if:
You don't have VA eligibility, your credit score is below 620, or you have a high DTI and need maximum flexibility on the income side.
Choose Conventional if:
You don't have VA eligibility, you have a 740+ credit score, can put 20% down, and want to avoid mortgage insurance entirely.
Frequently Asked Questions
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