FHA and VA Loan Comparison

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Both FHA and VA loans are from government programs that come with their fair share of benefits. However, the programs are geared for different people and work differently. The key difference between the two programs is that the VA loan is geared toward military borrowers. If you are considering a mortgage, you should look at what the FHA and VA have to offer you.


VA, or Veteran Affairs, loans require that you were a part of the military at some point of your career. You can get a loan from the VA if you are currently in military or if you were previously in the military. You have to be able to prove that you had an honorary discharge from the military to qualify. The form required is called the DD214; all lenders will only accept an original discharge form.

For FHA loans, anyone can qualify. You do not have to be a member of the military or any other organization. This makes the FHA a much larger program for more people to consider. 

Down Payments

The down payment criteria for FHA loans and VA loans are more favorable than with traditional lenders. With an FHA loan, you can usually come up with 3.5% or less for your down payment depending on the loan. This makes home buying much more accessible for many different buyers. 

With a VA loan, you have no down payment to come up with. This is a huge advantage over almost every other loan program out there. 100% loans are hard to come by and when you can get one from the VA, you should definitely consider it. 

Mortgage Insurance

One way that the programs differ is in the area of mortgage insurance. When you deal with an FHA loan, you are required to pay mortgage insurance. In fact, the upfront premium that you pay for the mortgage insurance is often greater than what private mortgage insurance would be with a traditional loan. This means that you could have a larger expense than you were expecting.

With a VA loan, you are not required to pay any type of mortgage insurance. With a VA loan, you can avoid paying any extra fees for insurance upfront or on your monthly mortgage payment. This can be a significant source of savings for you each and every month. 


Each type of loan has a few different aspects that could be considered drawbacks. For example, with a VA loan, the application process will take much longer than with a regular loan. You have to send everything off and have it approved by the VA in order to get approved. 

With the FHA, you have a loan maximum depending on your area. This can limit the amount of houses that you can get an FHA loan for.  Also, rates for FHA tend to be slightly higher than traditional market rates. It is important to shop around for the best rates, no matter what the program type.