How to Choose Between FHA, Conventional, and VA Loans

Compare FHA, conventional, and VA loans to find the right mortgage type based on your down payment, credit score, and military status.

  1. Check if you qualify for a VA loan. If you're active military, a veteran, or an eligible spouse, start here. VA loans require no down payment and no private mortgage insurance (PMI). You need a Certificate of Eligibility from the VA and typically a credit score of 620 or higher.
  2. Compare your down payment options. FHA loans require 3.5% down with a 580+ credit score, or 10% down with 500-579 credit. Conventional loans need 3-5% down for most buyers. If you have 20% down, conventional loans eliminate PMI entirely.
  3. Calculate the insurance costs. FHA loans charge both upfront (1.75% of loan amount) and annual mortgage insurance premiums (0.45-1.05% annually). Conventional loans charge PMI only until you reach 20% equity. VA loans charge a one-time funding fee (0.5-3.3% of loan amount) but no ongoing insurance.
  4. Consider loan limits in your area. FHA and VA loans have caps based on local housing costs — typically $472,030 in most areas, up to $1,089,300 in expensive markets as of 2026. Conventional loans can exceed these limits but become jumbo loans with stricter requirements and higher rates.
  5. Factor in your credit score impact. FHA loans accept scores as low as 500 with higher down payments. Conventional loans typically want 620+ for the best rates. VA loans usually require 620+ but focus more on income stability than perfect credit.
  6. Run the numbers on total monthly costs. Calculate principal, interest, taxes, insurance, and any PMI or MIP for each option. The lowest down payment doesn't always mean the lowest monthly payment. Get quotes from lenders for each loan type you qualify for.