Overview
FHA Loan
Federal Housing Administration loans are government-backed mortgages designed to make homeownership accessible, especially for first-time buyers and those with lower credit scores or smaller down payments.
Try Calculator →VA Loan
Department of Veterans Affairs loans are exclusive mortgage benefits for eligible veterans, active-duty service members, and certain surviving spouses, offering exceptional terms with no down payment requirement.
Try Calculator →Feature Comparison
| Feature | FHA Loan | VA Loan |
|---|---|---|
| Down Payment Requirement | As low as 3.5% | 0% (no down payment required) |
| Credit Score Requirements | 580+ for 3.5% down (500-579 with 10% down) | No minimum set by VA (lenders typically 620+) |
| Mortgage Insurance | MIP required upfront and annually | One-time funding fee (no monthly PMI) |
| Eligibility | Open to all qualified borrowers | Veterans, active military, eligible spouses |
| Property Requirements | FHA standards | VA standards (generally similar) |
| Loan Limits | County-specific limits apply | County-specific limits apply (but higher than FHA) |
| Occupancy Requirement | Must be primary residence | Must be primary residence |
FHA Loan
Pros
- Low down payment (3.5%)
- More lenient credit requirements
- Open to all qualified borrowers
- Higher debt-to-income ratios allowed
- Gift funds allowed for down payment
- Assumable loans
Cons
- MIP required for the life of the loan
- Upfront mortgage insurance premium (1.75%)
- Lower loan limits than conventional loans
- Property must meet FHA standards
- Seller concessions limited to 6%
VA Loan
Pros
- Zero down payment required
- No monthly mortgage insurance (PMI)
- Competitive interest rates
- Higher loan limits than FHA
- More lenient credit requirements
- Limited closing costs for veterans
- Assumable loans
Cons
- One-time funding fee (0.5%-3.3%)
- Only available to eligible veterans/military
- VA funding fee can be rolled into loan
- Property must meet VA requirements
- Certificate of Eligibility required
Which Should You Choose?
Choose FHA Loan if...
Choose an FHA loan if you're not eligible for a VA loan, have a lower credit score (580+), can afford at least 3.5% down payment, or are a first-time homebuyer who needs more flexible qualification requirements.
Choose VA Loan if...
Choose a VA loan if you're an eligible veteran, active-duty service member, or qualifying surviving spouse, want to avoid a down payment, want to avoid monthly mortgage insurance, or want to take advantage of the exclusive benefits earned through military service.