FHA Loan vs VA Loan: How They Differ for Home Buyers (2026)

Federal Housing Administration (HUD) — originated by approved lenders

FHA Loan

3.5% down at 580 FICO — the most accessible government-backed path for first-time buyers without military service.

• Minimum down payment: 3.5% (580+ FICO)
• Mortgage insurance: Upfront MIP + annual MIP
• Credit score floor: 500 (10% down); 580 (3.5% down)
• Eligibility: Open to all qualifying borrowers

Pros

• 3.5% down payment at 580 FICO — one of the most accessible low-down-payment programs available
• Open to any qualifying borrower — no military service required
• More flexible underwriting on debt-to-income ratios vs conventional
• Assumable loans — a buyer can take over your FHA mortgage at your rate (subject to lender approval)

Read HUD FHA loan guidance →

U.S. Department of Veterans Affairs — originated by VA-approved lenders

VA Loan

0% down, no monthly mortgage insurance — exclusively for eligible veterans, active duty, and qualifying surviving spouses.

• Minimum down payment: 0% required
• Mortgage insurance: None (no monthly MIP or PMI)
• VA funding fee: 1.25–3.3% (financed or paid at closing)
• Eligibility: Veterans, active duty, qualifying spouses only

Pros

• No down payment required — full purchase price can be financed by eligible borrowers
• No monthly mortgage insurance — saves hundreds per month vs FHA on the same balance
• Competitive rates — VA-backed guarantee reduces lender risk, often producing below-market rates
• Funding fee is waived for veterans with a qualifying service-connected disability (VA.gov)

Read VA home loan guidance →

Eligibility and mortgage insurance. FHA loans are open to any qualifying borrower; VA loans are restricted to eligible veterans, active-duty service members, and qualifying surviving spouses. On cost, VA loans have no monthly mortgage insurance premium — saving hundreds per month vs FHA on a comparable balance — while FHA requires both an upfront MIP (1.75%) and an ongoing annual MIP for the life of the loan in most cases. Source: HUD at hud.gov and the VA at va.gov.

No. Each applies to a single primary-residence purchase or refinance. If you are VA-eligible, you generally have a choice between the two — and VA is almost always the better structural deal for those who qualify due to the absence of monthly mortgage insurance and no required down payment. You can have a VA loan and subsequently get an FHA loan on a different property if you no longer occupy the VA-financed home, subject to entitlement and occupancy rules. Source: VA at va.gov.

For eligible veterans, VA loans typically produce lower monthly payments on the same purchase price because there is no monthly mortgage insurance premium. FHA borrowers pay an annual MIP of 0.45–1.05% of the loan balance, added to the monthly payment. On a $300,000 loan, FHA MIP can add $100–$250/month. VA borrowers pay a one-time funding fee (1.25–3.3%) but nothing monthly for insurance. Source: VA.gov and HUD.gov.

FHA's published minimum is 500 (with 10% down) or 580 (with 3.5% down), though most lenders apply overlays requiring 580–620. The VA does not set a minimum credit score — it's left to individual lenders, with most requiring 580–640 in practice. Both programs are more flexible than conventional loan standards, which typically require 620+ for approval. Source: HUD FHA guidelines at hud.gov and VA lender requirements at va.gov.