Loan comparison

Conventional vs VA Loan

Q: Is a Conventional or VA loan better?

Neither is universally better — it depends on your profile. Conventional Loans are buyers with 680+ credit and 5%+ down who want to avoid FHA's lifetime MIP. VA Loans are eligible veterans, active-duty service members, and surviving spouses. Run your numbers in the ReadinessIQ scorecard to see which one you actually qualify for at the best pricing.

Q: Can I switch from a Conventional loan to a VA loan later?

Yes — refinancing from Conventional to VA (or vice versa) is common once you build equity or improve credit. Many borrowers start on Conventional and refinance to VA to drop mortgage insurance.

Q: Which has lower monthly payments, Conventional or VA?

Base P&I depends on rate, not program. The difference shows up in mortgage insurance: PMI required if <20% down, but drops off automatically at 78% LTV; no monthly mortgage insurance (funding fee only, one-time). Over a 30-year loan that gap can total tens of thousands.

Q: What credit score do I need for Conventional vs VA?

Conventional Loan: 620+. VA Loan: 580+. Lenders often add overlays above these floors — most originators want 620+ for Conventional and 640+ for VA in practice.

Side-by-side breakdown of Conventional Loans and VA Loans — credit, down payment, mortgage insurance, and who each one fits.

See which one you qualify for →Run affordability

At a glance

Feature	Conventional	VA
Minimum credit score	620+	580+
Minimum down payment	3%	0%
Mortgage insurance	PMI required if <20% down, but drops off automatically at 78% LTV	no monthly mortgage insurance (funding fee only, one-time)
Loan limit (2026, standard county)	$806,500	$806,500
Best for	buyers with 680+ credit and 5%+ down who want to avoid FHA's lifetime MIP	eligible veterans, active-duty service members, and surviving spouses
Property types	Primary, second home, and investment	Primary residence only

Conventional Loan

Conventional loans conform to Fannie Mae / Freddie Mac guidelines and aren't backed by the government. They're the most common loan type in the U.S. and offer the widest range of terms, property types, and borrower profiles.

620+ FICO minimum (740+ for best pricing)
45% DTI standard, up to 50% with strong compensating factors
3% down for first-time buyers (HomeReady/Home Possible) or 5% otherwise
Primary, second home, and investment properties all eligible
Two years of employment history preferred

VA Loan

VA loans are guaranteed by the Department of Veterans Affairs. There's no down payment requirement, no monthly mortgage insurance, and lenient credit standards — the strongest loan product available to those who qualify.

Valid Certificate of Eligibility (COE) from the VA
Meet minimum service requirements (typically 90 active-duty days wartime, 181 peacetime, or 6 years Guard/Reserve)
Sufficient residual income after monthly obligations
Primary residence only
Property must pass VA appraisal (Minimum Property Requirements)

When to choose Conventional over VA

Choose Conventional when you're buyers with 680+ credit and 5%+ down who want to avoid FHA's lifetime MIP. Choose VA when you're eligible veterans, active-duty service members, and surviving spouses. The scorecard shows exactly which programs price best for your credit, DTI, and down payment in about 90 seconds.

Frequently asked questions

Is a Conventional or VA loan better?

Neither is universally better — it depends on your profile. Conventional Loans are buyers with 680+ credit and 5%+ down who want to avoid FHA's lifetime MIP. VA Loans are eligible veterans, active-duty service members, and surviving spouses. Run your numbers in the ReadinessIQ scorecard to see which one you actually qualify for at the best pricing.

Can I switch from a Conventional loan to a VA loan later?

Yes — refinancing from Conventional to VA (or vice versa) is common once you build equity or improve credit. Many borrowers start on Conventional and refinance to VA to drop mortgage insurance.

Which has lower monthly payments, Conventional or VA?

Base P&I depends on rate, not program. The difference shows up in mortgage insurance: PMI required if <20% down, but drops off automatically at 78% LTV; no monthly mortgage insurance (funding fee only, one-time). Over a 30-year loan that gap can total tens of thousands.

What credit score do I need for Conventional vs VA?

Conventional Loan: 620+. VA Loan: 580+. Lenders often add overlays above these floors — most originators want 620+ for Conventional and 640+ for VA in practice.