VA vs FHA loan — side by side.
If you're a veteran, active-duty, or eligible surviving spouse, VA almost always wins. Here's the math, line by line.
| Feature | VA Loan | FHA Loan |
|---|---|---|
| Who qualifies | Veterans, active-duty, National Guard/Reserves, eligible surviving spouses | Any borrower meeting credit and DTI guidelines |
| Minimum down payment | 0% with full entitlement | 3.5% (580+ credit) or 10% (500–579) |
| Minimum credit score | 580–620 lender overlay (no VA minimum) | 580 typical / 500 with 10% down |
| Mortgage insurance | None — ever | Upfront 1.75% MIP + monthly MIP for life of loan in most cases |
| Funding fee | 2.15% first use (0% down) / 3.3% subsequent; exempt for disabled vets | 1.75% upfront MIP financed into loan |
| Loan limit (most counties, 2026) | No hard limit with full entitlement | $541,287 |
| Max DTI | Up to 60%+ with strong residual income | Up to 56.99% with compensating factors |
| Property condition standards | Strict — MPRs (Minimum Property Requirements) | Strict — appraiser flags safety/health issues |
| Occupancy | Primary residence only (60-day occupancy) | Primary residence only |
| Multi-unit (2–4 unit) | Yes, must owner-occupy one unit | Yes, must owner-occupy one unit |
| Assumability | Yes — by another VA-eligible buyer | Yes — by any qualified buyer |
| Streamline refinance | VA IRRRL — no appraisal, no income docs | FHA Streamline — no appraisal, no income docs |
The bottom line
VA wins on cost: No down payment, no monthly mortgage insurance, and competitive rates. The funding fee is one-time and can be financed; FHA's MIP is permanent and adds $150–$400 to every monthly payment.
FHA wins on flexibility: Available to any borrower (not just veterans), and can be used multiple times without entitlement restoration.
Our take: If you qualify for VA, use it. Save FHA as a backup if you've exhausted your entitlement on another property.
VA vs FHA FAQs
If I qualify for both VA and FHA, which is better?+
VA — almost always. Zero down, no monthly mortgage insurance, and competitive rates beat FHA's 3.5% down with permanent MIP in virtually every scenario. The only reason to pick FHA over VA is if you've already used your VA entitlement on another property and don't have enough remaining for the new loan.
Do I have to pay a VA funding fee?+
Most veterans pay a one-time VA funding fee — typically 2.15% on a first-time use 0%-down loan, or 3.3% on subsequent uses. Veterans receiving service-connected disability compensation and surviving spouses are exempt from the fee entirely.
Can I use VA more than once?+
Yes. You can restore your full VA entitlement by paying off a prior VA loan, or use bonus entitlement to carry two VA loans simultaneously in some cases. We help PCS-ing service members navigate entitlement restoration regularly.
Why do sellers sometimes prefer FHA over VA?+
Some sellers worry VA's MPRs (Minimum Property Requirements) will flag issues during appraisal. In practice, FHA's standards are similarly strict. A strong offer letter and a knowledgeable lender (who can explain the actual differences) usually overcomes seller objections.
Can I get an FHA loan after a VA foreclosure?+
Yes — FHA has a 3-year waiting period after a foreclosure. VA has a 2-year waiting period. After either, you can also try to restore your VA entitlement by paying back the loss to the VA.
Which has lower closing costs?+
VA caps certain non-allowable costs the borrower can pay (like underwriting and processing fees), which typically makes VA closing costs slightly lower than FHA. The big monthly difference is VA's lack of mortgage insurance — usually $200–$400/month less than FHA.