Mortgage education
VA, FHA, and Conventional: Which Primary-Residence Loan Fits You?
If you're buying a home to live in, three loan types cover most buyers: VA, FHA, and conventional. They differ in down payment, mortgage insurance, and who they're built for. Here's a plain comparison so you can see where you fit.
The quick comparison
Each loan type was designed with a different borrower in mind. None is universally "best" — the right one depends on your situation.
VA loans — for veterans and eligible service members
- Down payment: often zero.
- Monthly mortgage insurance: none.
- Credit: flexible, though lenders set their own thresholds.
- Best for: those who've earned the benefit through service. If you're eligible, it's frequently the strongest option available.
FHA loans — for lower down payment and flexible credit
- Down payment: as little as 3.5%.
- Mortgage insurance: both an upfront and an annual premium (MIP).
- Credit: more flexible thresholds than conventional in many cases.
- Best for: first-time buyers, or anyone whose credit or down payment doesn't yet fit conventional.
Conventional loans — the standard path
- Down payment: as low as 3–5% for many buyers, though more is common.
- Mortgage insurance: required under 20% down (PMI), but it can be removed later as you build equity.
- Credit: generally wants stronger credit for the best pricing.
- Best for: buyers with solid credit and some down payment who want to avoid permanent mortgage insurance.
How to think about the choice
A few questions usually point to the answer:
- Are you a veteran or eligible service member? Start with VA — the benefit is hard to beat.
- Is your down payment or credit tight right now? FHA often opens the door.
- Do you have strong credit and want to avoid lasting mortgage insurance? Conventional is usually the goal.
It's also common to start with one and refinance into another later — for example, buying with FHA now and moving to conventional once you've built equity and can drop mortgage insurance.
The multi-unit angle worth knowing
All three of these can be used for owner-occupied homes with more than one unit — up to four units on VA and FHA. That opens a strategy where you live in one unit and rent the others, using that rent to help you qualify. It's powerful enough that we've written a full guide on it, linked below.
Your situation is what matters
The right loan type is the one that fits your credit, your down payment, and your goals — and sometimes the best move is one program now and another later. Let's figure out which fits you.