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Updated March 2026 · Real rate data

VA Loan vs FHA Loan
2026 Comparison

VA loans offer $0 down and no mortgage insurance. FHA loans require 3.5% down and charge MIP for the life of the loan. On a $400,000 home, VA saves you $283/month and $101,000+ over 30 years. Here is the complete side-by-side breakdown.

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$0
VA saves vs FHA
$0
Lifetime savings
$0
VA down payment
$0
VA mortgage insurance
SIDE BY SIDE

VA vs FHA: Complete Comparison

Every major difference between VA and FHA loans on a $400,000 home purchase. Based on March 2026 rates.

Feature
VA Loan
FHA Loan
Down Payment
$0 (0%)
$14,000 (3.5%)
Mortgage Insurance
$0/mo — never
$251/mo for life of loan
Interest Rate (30yr)
5.750%
5.875%
Monthly P&I
$2,334
$2,283 (on $386K)
Total Monthly Payment
$2,334
$2,534 (incl. MIP)
Upfront Fee
2.15% funding fee
1.75% MIP upfront
Credit Score Minimum
580+ (lender varies)
580+ (3.5% down)
Loan Limit (2026)
No limit (full entitlement)
$524,225 (most areas)
Eligibility
Veterans, active duty, Guard, Reserve, surviving spouses
Anyone who qualifies
30-Year Total Cost
~$840,000
~$941,000

Based on $400K purchase, 740+ FICO, March 2026 rates. FHA: 3.5% down ($386K loan). VA: 0% down ($400K loan). NMLS #65506.

DOWN PAYMENT

Cash You Keep in Your Pocket

On a $400,000 home purchase, here is how much cash you need at closing for each loan type:

VA Loan
$0
Down payment
Best deal
FHA Loan
$0
Down payment (3.5%)
+ $251/mo MIP for life
Conventional (5%)
$0
Down payment (5%)
+ $183/mo PMI (~7 yrs)
Learn more about FHA loans → Compare conventional loans →
INSURANCE COST

Mortgage Insurance: $0 vs $251/month

This is the single biggest savings with a VA loan. FHA charges mortgage insurance premium (MIP) for the entire life of the loan. VA charges $0 — ever.

Cumulative Mortgage Insurance Cost Over Time
$0 $30K $60K $90K 5 yr 15 yr 25 yr 30 yr $90,360 FHA MIP VA: $0 forever
VA — $0 mortgage insurance
FHA — $251/mo MIP for life
FHA MIP over 30 years
$0

$251/mo × 360 months

VA mortgage insurance
$0

Zero. Not now, not ever.

Your savings with VA
$0

Over the life of the loan

WHICH TO CHOOSE

Which Loan Is Right for You?

Choose VA If You...
Are an eligible veteran, active duty, Guard, Reserve, or surviving spouse
Want $0 down payment and no monthly mortgage insurance
Want the lowest interest rates available (typically 0.25-0.50% below FHA)
Need to borrow above the FHA limit ($524,225 in most areas)
Want the lowest total cost over the life of the loan
Choose FHA If You...
Are NOT eligible for VA (no qualifying military service)
Have a lower credit score (FHA allows 500+ with 10% down)
Are buying a non-owner-occupied investment property (VA requires primary residence)
Want an alternative low-down-payment option if VA is not available to you
Learn about FHA loans at fhahomeloans.services →
KEY DIFFERENCES

The 5 Biggest Differences

1
Mortgage Insurance

VA loans never charge PMI or MIP. FHA charges 0.55% annually ($183/mo on $400K) for the entire life of the loan. The only way to remove FHA MIP is to refinance into a different loan type. Over 30 years, this costs $65,880-$90,000+.

2
Down Payment

VA: $0 down with full entitlement, any loan amount. FHA: 3.5% minimum ($14,000 on $400K). Putting down 5%+ on a VA loan reduces the funding fee, but is never required.

3
Loan Limits

VA: No limit with full entitlement (since 2020). You can buy a $2M home with $0 down. FHA: Capped at $524,225 in most areas ($1,249,125 in high-cost). This is a major advantage for VA in expensive markets.

4
Interest Rates

VA rates are consistently 0.125-0.375% lower than FHA (currently 5.750% vs 5.875%). This is because the VA guaranty provides stronger loss protection to lenders than FHA insurance.

5
Upfront Fees

VA: 2.15% funding fee (first use, $0 down) — tax-deductible starting 2026. Exempt if 10%+ VA disability. FHA: 1.75% upfront MIP — not tax-deductible, not waivable. Both can be financed into the loan.

FAQ

VA vs FHA Questions

For eligible veterans, VA loans are better in almost every measurable way. VA offers $0 down (vs 3.5%), $0 mortgage insurance (vs $251/mo for life), lower interest rates (5.750% vs 5.875%), and no loan limit with full entitlement. The only scenario where FHA might be preferable is if you are not eligible for VA benefits.
Yes. If you currently have an FHA loan and are VA-eligible, you can refinance into a VA loan using a VA Cash-Out refinance. This eliminates your FHA MIP (saving $150-300+/mo), potentially lowers your rate, and lets you access equity if needed. Many veterans save hundreds per month by switching from FHA to VA.
VA loans consistently have lower rates than FHA. As of March 2026, VA 30-year fixed rates start at 5.750% compared to 5.875% for FHA. This is because the VA guaranty reduces lender risk more effectively than FHA insurance, allowing lenders to offer better pricing.
The VA funding fee (2.15% first use) is slightly higher than FHA upfront MIP (1.75%). However, the VA funding fee became tax-deductible in 2026, and approximately 1 in 3 VA borrowers are completely exempt (10%+ disability rating). Even with the higher upfront fee, VA loans cost dramatically less overall because there is no monthly mortgage insurance.
No. Both FHA and VA require the property to be your primary residence, and you can only have one primary residence. However, you could have a VA loan on a former primary residence (now rented) and use FHA for a new purchase, or vice versa, as long as you meet occupancy requirements.
Both are relatively accessible. VA loans have the lowest denial rate of any major loan type. VA has no minimum credit score requirement (though lenders typically want 580-620). FHA allows scores as low as 500 with 10% down. VA uses a unique residual income test in addition to DTI, which can actually help borrowers with higher debt qualify.
Neither is preferred or disadvantaged in practice. Both loan types close at comparable rates and timelines. A strong pre-approval letter from a reputable lender matters far more than the loan type. VA purchases typically close in 25-30 days, similar to FHA.
If you qualify for both, VA is almost always the better choice. The $0 down payment and $0 mortgage insurance make VA dramatically cheaper. The only reason to choose FHA over VA would be if the specific property does not meet VA minimum property requirements but passes FHA standards — a rare scenario.
RELATED

Related Resources

VA Purchase LoansVA EligibilityVA Funding FeeVA vs ConventionalCompare Payments
EXPLORE

Related Resources

VA vs ConventionalVA PurchaseVA Rates TodayVA EligibilityVA Loan Guide
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REVIEWS

What VA Buyers Say

★★★★★

"$0 down, no PMI, lowest rate I found. Valley West closed my VA loan in 24 days."

— VA buyer, Las Vegas
★★★★★

"Third VA purchase with Valley West. They shop 50+ lenders every time. Always the best deal."

— VA buyer, Henderson
★★★★★

"Saved $66K over conventional. Zero fees, zero hassle. Valley West knows VA loans."

— VA buyer, North Las Vegas
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VA Loan Resources

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