The VA loan is open only to eligible service members, veterans, and some surviving spouses, while an FHA loan is open to any qualified buyer who will live in the home. If you hold a valid VA eligibility, both programs are available and worth pricing. If you don’t, the question answers itself: FHA is your route to a low down payment mortgage.
Duane Buziak explains that for many buyers the real decision comes down to three things: eligibility, credit profile, and cash on hand. This guide covers the 2026 eligibility rules, the cost math with real numbers, and how to decide which loan fits your situation.
Quick Answer: Eligibility Decides Whether Both Loans Are on the Table
Quick answer: A VA loan requires qualifying military service and a Certificate of Eligibility (COE). An FHA loan requires a primary residence, a credit score of 580 or higher for 3.5% down (500 to 579 needs 10% down), and a debt-to-income (DTI) ratio that fits underwriting. See HUD’s FHA page and the VA.gov COE page.
Who qualifies for a VA loan
The VA guarantees loans for veterans, active-duty service members, certain National Guard and Reserve members, and some surviving spouses. Length-of-service requirements differ by era and by component, so confirm yours at VA.gov rather than relying on a rule of thumb. The COE is the document that proves your eligibility and shows your available entitlement, which is the amount of the loan the VA will guarantee on your behalf.
A non-veteran spouse generally cannot use VA financing alone. The exceptions are limited, such as certain surviving spouses. A married couple where only one spouse served can still use the VA loan with the veteran on the loan, but the program is built around the veteran’s eligibility.
Who qualifies for an FHA loan
FHA is insured by the Federal Housing Administration and has no service requirement. You must occupy the home as your primary residence, have a documented credit history, and carry a DTI that the automated or manual underwriting review accepts. Individual lenders can add their own rules on top of the program minimums, called overlays, which can raise the credit score they will accept above the 580 floor.
Veterans are not locked into VA
A common misconception is that a veteran must use the VA loan. Eligible veterans can legally choose FHA, and some do. Entitlement may be tied up in another VA loan, a COE may be delayed, or the property or payment structure may simply fit FHA better. Having VA eligibility gives you an extra option, not an obligation.
FHA vs VA Side by Side: Down Payment, Credit, Mortgage Insurance, and Limits
The table below compares the two programs on the features that most often change a buyer’s decision. FHA county loan limits for 2026 are $541,287 for the floor and $1,249,125 for the high-cost ceiling on a one-unit home, effective for case numbers assigned on or after January 1, 2026, per HUD Mortgagee Letter 2025-23. Look up your county on HUD’s FHA limits lookup (as of October 2026).
| Feature | FHA Loan | VA Loan | What it means for you |
|---|---|---|---|
| Who can apply | Any qualified buyer | Eligible service members, veterans, some surviving spouses | FHA is open to everyone. VA depends on your COE. |
| Minimum down payment | 3.5% with a 580+ score; 10% with 500 to 579 | 0% for eligible borrowers with full entitlement | VA wins on cash to close if you qualify. |
| Credit score floor | Set by HUD Handbook 4000.1 (580 and 500 tiers) | Set by each lender, no single VA minimum | FHA publishes a clear floor. VA varies by lender. |
| Monthly mortgage insurance | Annual MIP, 0.15% to 0.75% by loan tier | None | VA has no monthly insurance charge. |
| Upfront fee | UFMIP of 1.75% of the base loan | Funding fee, varies by down payment and use (exemptions apply) | Both can be financed into the loan. |
| Occupancy | Primary residence | Primary residence | Neither is built for investment purchases. |
| Loan limits | County limits: $541,287 floor, $1,249,125 ceiling (one unit, 2026) | No limit with full entitlement; county limits apply to reduced entitlement | Higher-priced homes may push FHA buyers to a different structure. |
| Streamline refinance | FHA Streamline Refinance | VA IRRRL | Each program has its own rate-reduction refinance path. |
| Co-borrower flexibility | Non-occupant co-borrower allowed | Spouse is straightforward; other non-veteran co-borrowers limit the guaranty | FHA is more flexible when family helps you qualify. |
| Assumability | Assumable with approval | Assumable with approval | A lower-rate loan can be a selling point later. |
The honest summary: VA offers 0% down and no monthly mortgage insurance for eligible borrowers, and that is a real advantage. FHA’s strengths are that it is open to all buyers, has a defined 580 credit floor for the 3.5% down tier, and accepts a non-occupant co-borrower to help you qualify. Borrower eligibility, not program preference, usually settles the question first.
How FHA Mortgage Insurance and the VA Funding Fee Actually Work
Both programs charge for the government backing behind them, just in different ways.
FHA: UFMIP and annual MIP
The upfront mortgage insurance premium (UFMIP) is 1.75% of the base loan amount, set by HUD Mortgagee Letter 2015-01. Most borrowers finance it into the loan rather than paying it at closing. Annual MIP is billed monthly and depends on loan term, loan amount, and loan-to-value (LTV). For a 30-year loan with LTV above 95% and a base amount at or below $726,200, the rate is 0.55% per year under Mortgagee Letter 2023-05. The full range across tiers runs from 0.15% to 0.75%, so the exact rate for your loan depends on its tier; the schedule lives in HUD Handbook 4000.1.
VA: the one-time funding fee
VA loans have no monthly mortgage insurance, but most borrowers pay a one-time funding fee. The percentage varies by down payment and by whether this is your first or a subsequent use of the benefit. As of 2026, a first-use purchase with nothing down carries a 2.15% fee, and it drops as your down payment rises. Veterans receiving VA disability compensation, along with certain other groups, are exempt. Confirm the current percentages on the VA funding fee page before you budget, since they can change.
When FHA MIP can come off
FHA MIP is not always permanent. With 10% or more down on a 30-year loan, annual MIP is removed after 11 years. With less than 10% down, it generally lasts the life of the loan. The typical way to get rid of it earlier is to refinance once you have enough equity. The CFPB explains how mortgage insurance works in plain language.
Worked Example: A $350,000 Home Financed With FHA, Line by Line
This is an illustration, not a quote. It assumes a 30-year fixed rate of 6.25%, a $350,000 purchase price, and a Henrico County, VA property tax rate of $0.85 per $100 of assessed value (see henrico.us), with assessed value assumed equal to the price. Homeowners insurance of $1,500 a year is also an assumption.
- Down payment (3.5%): $12,250
- Base loan amount: $337,750
- UFMIP (1.75%, financed): $5,910.63
- Total loan amount: $343,660.63
- Principal and interest (6.25%, 30 years): about $2,116 a month
- Annual MIP (0.55% of base loan): $1,857.63 a year, about $154.80 a month
- Property tax ($0.85 per $100): $2,975 a year, about $247.92 a month
- Homeowners insurance (assumed): $1,500 a year, $125 a month
- Total estimated monthly payment: about $2,643.72
Cash needed at the table for the down payment alone is $12,250, before closing costs. Ask about no-out-of-pocket closing options, which can be structured through seller credits or lender credits depending on the deal and the pricing you choose.
The VA contrast for an eligible buyer
Now suppose the same buyer is VA-eligible, uses the benefit for the first time, and puts nothing down. The funding fee at 2.15% is $7,525, financed, for a total loan of $357,525 (verify your percentage and use status on VA.gov). Holding the 6.25% assumption constant, principal and interest is about $2,201. Add the same tax and insurance, with no monthly mortgage insurance, and the payment is about $2,574.27 a month, roughly $69 less than the FHA example, with $12,250 less cash down.
The tradeoff is plain: VA costs less up front and monthly for an eligible buyer, but the larger loan balance builds equity more slowly. FHA remains the route for buyers without VA eligibility. Taxes and insurance vary by county and state, so your own numbers will differ, and actual rates differ by program and borrower profile.
Which Loan Fits Your Situation: Five Common Buyer Profiles
- Non-veteran first-time buyer: FHA. It is the open-access program, with 3.5% down and a published credit floor.
- Veteran with a valid COE and no down payment saved: Price VA alongside FHA. VA’s 0% down and lack of monthly mortgage insurance often win, but a side-by-side quote shows the real difference.
- Borrower with a 580 to 619 score: FHA has a defined path at 580 for 3.5% down. VA has no official floor, but individual lenders set their own, so ask what applies to you.
- Buyer using a non-occupant co-borrower: FHA is typically more flexible, since a family member can help you qualify without living in the home.
- Current FHA owner wanting a lower payment: An FHA Streamline Refinance can reduce your rate with reduced documentation, subject to program rules on net tangible benefit and payment history.
What shows up in underwriting
Each program has its own property standards. HUD’s minimum property requirements and the VA’s minimum property requirements both require a safe, sound, and sanitary home, and the appraiser flags issues for each. Lender overlays can raise credit minimums above the program floor, which is why two lenders can give different answers on the same file.
Why a broker can price both
Duane Buziak is a mortgage broker with access to hundreds of wholesale lenders, so an eligible veteran can see FHA and VA pricing from multiple sources in one conversation. His NoTouch Credit Pull is a soft pull mortgage process, giving you a mortgage pre-approval without hard pull and a no hard inquiry mortgage pre-approval, so you can compare before any hard credit inquiry is made. Some other lenders may require a hard pull to pre-qualify, which is worth asking about before you apply.
FHA vs VA Loan FAQ: Eight Questions Buyers Ask
Can a veteran use an FHA loan?
Yes. Veterans with VA eligibility can choose an FHA loan instead, and some do when their entitlement is in use or their COE is delayed. FHA has no service requirement, so it is open to any qualified buyer. See HUD’s FHA loan page for program basics.
Which loan has the lower credit requirement?
FHA publishes a defined floor: 580 for 3.5% down, or 500 to 579 with 10% down, under HUD Handbook 4000.1. VA sets no single minimum score, so each lender chooses its own. Lender overlays can push either program higher than its stated floor.
Does FHA always cost more than VA each month?
Not always, but for an eligible buyer VA is often lower because it has no monthly mortgage insurance. In the $350,000 example above, VA was roughly $69 a month less. Outcomes depend on rate, down payment, and funding fee status. Check the VA funding fee page.
Can I have both an FHA and a VA loan?
Yes, in some cases. Both programs require a primary residence, so holding both usually means one is paid off, sold, or you are relocating with specific occupancy circumstances. Your COE shows how much VA entitlement remains. Details are on VA.gov.
Is FHA mortgage insurance permanent?
Not always. With 10% or more down on a 30-year loan, annual MIP drops off after 11 years. With less than 10% down, it generally lasts the loan’s life, and refinancing is the usual way out. Tiers are in HUD Handbook 4000.1.
Does VA have loan limits?
Borrowers with full entitlement have no VA loan limit, though the lender sets how much it will approve based on your income and credit. County limits apply when entitlement is reduced. See the VA loan limits page. FHA, by contrast, has county limits starting at $541,287 for 2026.
Can I compare without a hard inquiry?
Yes. With Dare to Compare, Duane Buziak uses a NoTouch Credit Pull, a soft pull, to compare FHA and VA options without a hard inquiry. You see real pricing from hundreds of wholesale lenders before deciding. The CFPB’s home buying guide offers more on shopping around.
Which states does Duane Buziak serve?
Duane Buziak serves buyers in Virginia, Florida, Tennessee, Georgia, Washington DC, North Carolina, South Carolina, and Maryland. FHA program rules are federal, so the core requirements apply across these states, though property taxes and insurance vary by location. Licensing can be confirmed through NMLS Consumer Access.
Eligibility and Cash Decide the Choice: Compare Both Before You Commit
If you don’t have VA eligibility, FHA is the program to build around. If you do, the deciding factors are how much cash you have and how the monthly payment compares once the funding fee or MIP is counted. The only reliable way to know is to see both quotes on your own numbers.
Ready to take the first step toward homeownership with an FHA loan tailored to your needs? Schedule your free consultation today and discover how Duane Buziak at FHA Mortgages by Duane Buziak can help you through the path to your new home with competitive rates and expert guidance. As a broker with access to hundreds of wholesale lenders, Duane Buziak offers a NoTouch Credit Pull (soft pull, no hard inquiry), the Dare to Compare pricing challenge, and no-out-of-pocket closing options. Call 804-212-8663 or visit 4860 Cox Rd, Glen Allen, VA 23060. Licensed in VA, FL, TN, GA, and DC.
