Last updated: June 2026
VA loans offer $0 down and no monthly mortgage insurance, making them the cheapest option for eligible veterans. FHA loans require 3.5% down and charge annual MIP (0.55%) for the life of the loan. Conventional loans need 3-20% down and charge PMI only until you reach 20% equity. For eligible military borrowers, the VA loan saves the most money in nearly every scenario.
Choosing between a VA loan, FHA loan, and conventional mortgage comes down to your eligibility, financial situation, and goals. Each loan type has trade-offs — and the "best" option depends on whether you qualify for VA benefits, how much you can put down, and how long you plan to keep the loan. This page puts all three side by side so you can compare in one place.
How Do VA, FHA, and Conventional Loans Compare?
| Feature | VA Loan | FHA Loan | Conventional Loan |
|---|---|---|---|
| Down Payment | $0 (0%) | 3.5% minimum | 3% to 20% |
| PMI / MIP | None — ever | 1.75% upfront + 0.55% annual MIP (life of loan) | PMI required if <20% down (removable at 20% equity) |
| Credit Score | No VA minimum; lenders require 580-620 | 580 (3.5% down) or 500 (10% down) | 620+ minimum; 680+ for best rates |
| Loan Limits (2026) | No limit (full entitlement) | $498,257 (most FL counties) | $766,550 conforming (jumbo above) |
| Funding Fee / Upfront Cost | 2.15% funding fee (first use, $0 down; waived for disabled veterans) | 1.75% upfront MIP | None |
| Interest Rates | Typically lowest (0.25-0.50% below conventional) | Similar to conventional | Market rate; varies by credit and down payment |
| Property Types | 1-4 unit primary residence, VA-approved condos | 1-4 unit primary residence, FHA-approved condos | Primary, second home, investment property |
| Occupancy Requirements | Primary residence only | Primary residence only | Primary, second home, or investment |
| DTI Ratio | 41% guideline + residual income (flexible) | 43-50% depending on lender | 43-50% max |
| Seller Concessions | Up to 4% of sale price | Up to 6% of sale price | 3-9% depending on down payment |
| Assumable | Yes (with VA approval) | Yes (with lender approval) | Generally no |
| Eligibility | Veterans, active duty, Guard/Reserve, some surviving spouses | Any qualified borrower | Any qualified borrower |
Which Loan Saves You the Most Money Over 30 Years?
On a $350,000 home over a 30-year term, the total cost differences are significant. The VA loan's $0 down payment and zero monthly mortgage insurance consistently produce the lowest total cost for eligible borrowers.
| Cost Category | VA Loan | FHA Loan | Conventional (5% down) |
|---|---|---|---|
| Down Payment | $0 | $12,250 | $17,500 |
| Upfront Fee | $7,525 (funding fee) | $5,906 (upfront MIP) | $0 |
| Monthly Insurance | $0/mo | ~$155/mo (life of loan) | ~$165/mo (until 20% equity) |
| Total Insurance Over Loan | $0 | ~$55,800 | ~$13,200 (est. 7 years) |
The FHA loan's lifetime MIP is its biggest drawback — on a $350,000 purchase, you could pay over $55,000 in mortgage insurance alone over 30 years. Conventional PMI is removable once you hit 20% equity, making it a better long-term play than FHA for borrowers who do not qualify for VA. For eligible veterans, the VA loan's combination of $0 down, no PMI, and lower rates is hard to beat.
Want the exact numbers for your purchase price?
Barrett runs side-by-side scenarios for VA, FHA, and conventional so you see the real difference. Free, no obligation.
When Is Each Loan Type the Best Choice?
Choose VA when...
- You are an eligible veteran, active-duty member, Guard/Reserve, or surviving spouse
- You want $0 down and no monthly mortgage insurance
- You want the lowest possible interest rate
- You are buying a primary residence (1-4 units, including house-hacking with a multi-unit)
Choose FHA when...
- You are not eligible for a VA loan
- Your credit score is below 620 and you need a clear path to approval
- You have limited savings but can cover 3.5% down
- The property is FHA-approved but not VA-approved (some condo complexes)
Choose Conventional when...
- You have 20%+ down payment (no PMI, no funding fee — lowest total cost)
- You are buying an investment property or second home (VA and FHA are primary residence only)
- You want to avoid VA appraisal requirements on a property that might not pass MPRs
- You have excellent credit (680+) and enough down payment to get competitive rates without government backing
Deeper Two-Way Comparisons
Want more detail on a specific matchup? These guides go deeper:
I'm Barrett Henry — a Military Relocation Professional (MRP)and Broker Associate with REMAX Collective. With 23+ years of real estate experience, I help veterans and military families across Tampa Bay's eight counties understand their financing options and find the right fit. I don't originate loans — I connect you with lenders who specialize in VA financing and make sure you're getting the best deal. For official VA loan information, visit the U.S. Department of Veterans Affairs. For FHA program details, see HUD.gov.
Barrett Henry, MRP
Broker Associate, REMAX Collective
23+ years of real estate experience helping Tampa Bay veterans navigate VA home loans.
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Frequently Asked Questions
Which loan type has the lowest monthly payment?
VA loans typically produce the lowest monthly payment because they require $0 down and charge no monthly mortgage insurance (PMI or MIP). On a $350,000 home, a VA borrower avoids the $137/month FHA MIP and the $150-300/month conventional PMI that borrowers with less than 20% down would pay. Combined with VA rates that tend to run 0.25-0.50% lower, the savings add up fast.
Can I switch between VA, FHA, and conventional loans after closing?
Yes, through refinancing. An eligible veteran with an FHA or conventional loan can refinance into a VA loan to eliminate mortgage insurance. A VA borrower could also refinance into a conventional loan if they have 20%+ equity and want to avoid the VA funding fee on a subsequent use. Each refinance has its own closing costs, so run the numbers with a lender first.
Which loan is easiest to qualify for with a low credit score?
FHA loans have the clearest low-credit path: 580 for 3.5% down, or 500 with 10% down. The VA has no official minimum, but most VA lenders require 580-620. Conventional loans generally need 620+, with 680+ for the best rates. If your score is below 580, FHA with 10% down may be your only government-backed option.
Do all three loan types require mortgage insurance?
VA loans never require mortgage insurance — that is one of their biggest advantages. FHA loans charge both an upfront MIP (1.75%) and annual MIP (0.55%) for the life of the loan. Conventional loans require PMI only when you put less than 20% down, and PMI can be removed once you reach 20% equity.
Which loan type allows the highest loan amount?
VA loans with full entitlement have no loan limit since 2020 — you can borrow whatever a lender will approve with $0 down. Conventional conforming loans are capped at $766,550 in most areas for 2026 (higher in high-cost areas). FHA limits are lower, at $498,257 in most Florida counties. Above these limits, you need a jumbo loan for conventional or FHA.