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Short answer
FHA and VA loans are both government-backed, but VA loans are only for eligible veterans, service members, and certain surviving spouses, while FHA loans are open to any borrower who meets FHA's rules. VA requires no down payment when the price is not above the appraised value and has no monthly mortgage insurance, though most borrowers pay a one-time funding fee unless exempt; FHA allows as little as 3.5% down for eligible borrowers and charges both upfront and annual mortgage insurance. If you are eligible for VA, compare both on Loan Estimates for the same home.
| Feature | FHA loan | VA loan |
|---|---|---|
| Who can use it | Any borrower who meets FHA and lender requirements | Eligible veterans, service members, and certain surviving spouses with a COE |
| Backed by | Insured by FHA (HUD) | Guaranteed in part by VA |
| Down payment | As little as 3.5% down for eligible borrowers with a 580+ score | None required by VA if the price is not above the appraised value |
| Credit score | 580+ for maximum financing; 500-579 limited to 90% LTV | VA has no minimum score; lenders set their own |
| Mortgage insurance | Upfront MIP (1.75%) plus annual MIP | No monthly mortgage insurance |
| Upfront government fee | Upfront MIP, usually financed | VA funding fee (1.25% to 3.3% on purchases), unless exempt |
| 2026 one-unit loan limit | $541,287 to $1,249,125, by county | No VA limit with full entitlement |
| Seller concessions | Interested parties up to 6% of the sales price | Concessions up to 4% of reasonable value; VA does not limit credits for closing costs |
| Occupancy | Primary home; move in within 60 days | Primary home; you must live in it |
FHA is part of the U.S. Department of Housing and Urban Development (HUD). It does not lend money itself; it insures loans made by FHA-approved lenders. According to the CFPB, the standards for qualifying for these loans are generally more flexible than for conventional loans.
Under HUD Handbook 4000.1, a minimum decision credit score of 580 or higher is eligible for maximum financing, which on a purchase is a loan-to-value (LTV) of 96.5%. That is why you hear "as little as 3.5% down for eligible borrowers." With a score from 500 to 579, the maximum LTV is 90%. At least one borrower must move into the home within 60 days of signing the mortgage.
VA sets the rules and guarantees part of each loan, but as the CFPB explains, VA loans are underwritten, closed, and serviced entirely by private lenders. To use the benefit for a purchase, VA's purchase loan page says you need to:
VA does not require a minimum credit score, but some lenders do have a requirement.
FHA charges an upfront MIP of 1.75% of the base loan amount, usually financed into the loan, plus an annual MIP paid monthly. Under HUD Mortgagee Letter 2023-05, for most loans with terms longer than 15 years and base loan amounts up to $726,200, the annual premium is 0.50% when your LTV is 95% or lower and 0.55% above 95%. If your starting LTV is 90% or less, annual MIP lasts 11 years; above 90%, it lasts for the mortgage term.
VA loans have no monthly mortgage insurance. Instead, most borrowers pay a one-time funding fee, which VA says applies only to the loan amount and can be financed into the loan. VA's chart for purchase loans:
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
You do not pay the funding fee if, among other cases listed by VA, you receive VA compensation for a service-connected disability, or you receive Dependency and Indemnity Compensation (DIC) as the surviving spouse of a veteran. Your COE shows whether you are exempt.
What this means
For an eligible borrower, the comparison usually comes down to a one-time VA funding fee (or none, if exempt) versus FHA's upfront premium plus years of annual MIP. Only Loan Estimates for your own scenario show the real totals.
FHA loan limits are set by county. For 2026, HUD set the one-unit limit from $541,287 in lower-cost areas up to $1,249,125 in high-cost areas. VA says borrowers with full entitlement do not have a loan limit, as long as they can afford the loan and the appraisal supports the price.
For seller help, FHA lets interested parties contribute up to 6% of the sales price. VA does not limit seller credits for closing costs, but it limits seller's concessions to no more than 4% of the home's reasonable value.
A VA loan is often worth a close look if:
An FHA loan is often worth a close look if:
Many eligible buyers qualify for both. The reliable way to choose is side by side, with the same price, down payment, and lock date.
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Yes. VA eligibility does not stop you from using FHA. Many eligible buyers compare both and choose based on cost, down payment, and how they want to use their VA entitlement.
No. VA loans do not require private mortgage insurance. Most borrowers pay a one-time VA funding fee instead, unless they are exempt, and the fee can be financed into the loan.
Under HUD Handbook 4000.1, an FHA score of 580 or higher is eligible for maximum financing, and 500 to 579 is limited to 90% loan-to-value. VA does not set a minimum score, but some lenders have their own requirement.
VA lists several exemptions, including borrowers receiving VA compensation for a service-connected disability and surviving spouses receiving Dependency and Indemnity Compensation. Your Certificate of Eligibility shows whether you are exempt.
VA says borrowers with full entitlement do not have a loan limit, as long as they can afford the loan and the appraisal supports the price. FHA limits are set by county; for 2026 the one-unit range is $541,287 to $1,249,125.
FHA lets interested parties contribute up to 6% of the sales price. VA does not limit seller credits for closing costs, but it limits seller's concessions to no more than 4% of the home's reasonable value.
This page is general education, not a loan offer, commitment, or approval. Program rules and figures change; the figures here were checked against the sources below in October 2026. Your options depend on your credit, income, property, and each lender's guidelines. All loans are subject to approval.
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