Loan comparison

FHA vs VA Loan

Side-by-side breakdown of FHA 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	FHA	VA
Minimum credit score	580+	580+
Minimum down payment	3.5%	0%
Mortgage insurance	MIP for the life of the loan (0.55% annual on most 30-year loans, plus 1.75% upfront)	no monthly mortgage insurance (funding fee only, one-time)
Loan limit (2026, standard county)	$524,225	$806,500
Best for	buyers with credit scores 580–680 or limited down payment savings	eligible veterans, active-duty service members, and surviving spouses
Property types	Primary residence only	Primary residence only

FHA Loan

FHA loans are insured by the Federal Housing Administration and originated by approved lenders. They exist to make homeownership reachable for borrowers who don't fit conventional guidelines — lower credit scores, higher DTIs, or thin down payments.

580+ FICO for 3.5% down; 500–579 for 10% down
43% DTI standard, up to 56.9% with compensating factors
Primary residence only (no investment properties)
Property must meet FHA minimum property standards
2-year employment history in the same field

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 FHA over VA

Choose FHA when you're buyers with credit scores 580–680 or limited down payment savings. 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 FHA or VA loan better?

Neither is universally better — it depends on your profile. FHA Loans are buyers with credit scores 580–680 or limited down payment savings. 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 FHA loan to a VA loan later?

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

Which has lower monthly payments, FHA or VA?

Base P&I depends on rate, not program. The difference shows up in mortgage insurance: MIP for the life of the loan (0.55% annual on most 30-year loans, plus 1.75% upfront); no monthly mortgage insurance (funding fee only, one-time). Over a 30-year loan that gap can total tens of thousands.