VA Loan vs. FHA vs. Conventional
Choosing the right mortgage depends on your service history, credit profile, down payment, and long-term goals. Here’s a direct comparison of VA, FHA, and conventional loans so you can make an informed decision.
Side-by-Side Comparison
| Feature | VA Loan | FHA Loan | Conventional |
|---|---|---|---|
| Who it’s for | Veterans, active-duty, eligible spouses | Most borrowers | Most borrowers |
| Minimum down payment | 0% | 3.5% | 3%–5%+ |
| Monthly mortgage insurance | None — ever | Required, often for life of loan | Required below 20% down; removal can be requested at 80% LTV, automatic at 78% LTV |
| Upfront fee | VA Funding Fee (waived for disabled vets) | 1.75% Upfront MIP | None |
| Loan limits | No limit with full entitlement | County-based limits | Conforming and high-balance limits apply |
| Minimum credit score | 580 (lender overlay) | 500–580+ | 620+ |
| Investment properties | Not allowed | Not allowed | Allowed |
| Seller concessions | Up to 4% of value | Up to 6% | Up to 3–9% depending on LTV |
When the VA Loan Wins
For eligible veterans, the VA loan is almost always the best choice. No monthly mortgage insurance saves hundreds of dollars per month compared to FHA or low-down-payment conventional. Combined with zero down and no loan limit for full entitlement holders, VA financing provides purchasing power that no other standard program can match in high-cost California markets.
When FHA Might Be Considered
FHA is rarely a better choice than VA for eligible veterans. It may come into play for credit scores below 580, or when a property doesn’t meet VA Minimum Property Requirements but does meet FHA standards.
When Conventional Makes Sense
Conventional loans make sense for purchasing investment properties (VA requires owner-occupancy), when VA entitlement is fully tied up, or for veterans with 20%+ equity and strong credit where no MI is required and conventional pricing is competitive.
Want to Compare Options for Your Situation?
At Lendia, we’ll run VA vs. FHA vs. conventional side by side and show you the real monthly payment difference. Get a free quote to start.
Upfront cost on a $600,000 purchase (illustrative example, not a quote)
| Item | VA (up to 100% financing) | FHA (3.5% down) | Conventional (5% down) |
|---|---|---|---|
| Cash down | $0 | $21,000 | $30,000 |
| Base loan | $600,000 | $579,000 | $570,000 |
| Upfront fee | 2.15% = $12,900 | 1.75% = $10,132.50 | None |
| Loan if fee financed | $612,900 | $589,132.50 | $570,000 |
| Monthly mortgage insurance | None | Yes, annual MIP | Yes, PMI |
The table shows why the monthly payment, not the upfront figure, usually decides the comparison. We run the real numbers with your own scenario.
Questions that decide the right fit
- Do you plan to live in the home? VA and FHA both require it.
- How long will you keep it? Short holds give less time to recover upfront fees.
- Is the property a condo? Check VA and FHA project approval before you offer.
- Can you put 20% or more down? If so, conventional avoids mortgage insurance entirely.
Reading the comparison
Three things move the answer most. First, the monthly insurance line: VA has none, FHA charges it for the life of the loan when less than 10% is put down, and conventional PMI can be requested off at 80% LTV of the original value and ends automatically at 78% if payments are current. Second, your credit profile: conventional pricing tends to reward higher scores, while FHA and VA allow more flexibility. Third, the property itself: each program has its own condition and project-approval rules, so a home that fits one may not fit another. Ask us to price the same scenario all three ways before you decide.
Frequently asked questions
Can I combine VA with down payment assistance?
Assistance programs in California change often and have their own rules, so ask us for what is currently available before you assume anything.
Does the same property qualify under all three programs?
Not always. Condition standards, condo approval and occupancy rules differ, so one property might clear one program and not another.
Should I compare more than the monthly payment?
Yes. Consider cash to close, how long you will keep the loan, and whether mortgage insurance ends. Conventional PMI can be removed once equity builds; FHA MIP may stay for the life of the loan.