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Real Estate

VA Loan vs Conventional Loan

Compare VA loans and conventional mortgages — when the VA benefit is hard to beat.

Overview

VA loans are guaranteed by the Department of Veterans Affairs and available to qualifying veterans, active military, and some surviving spouses. They allow 0% down, no PMI, and competitive rates — usually a better deal than conventional for those who qualify.

Feature
VA Loan
Conventional Loan
Eligibility
Veterans, active military, qualifying spouses
Anyone with credit + income to qualify
Down Payment
0%
3%–20%
PMI / Mortgage Insurance
None
Required if <20% down (cancellable)
Funding Fee
1.25%–3.3% of loan, financed
No equivalent fee
Interest Rate
Usually 0.25%–0.5% below conventional
Standard market rate
Loan Limits
No cap with full entitlement
$806,500 conforming (most areas)
Best For
Eligible service members and veterans
Civilians; high earners with large down payments

Choose VA Loan when...

Choose a VA loan whenever you're eligible — the combination of 0% down and no PMI typically beats any other option.

Choose Conventional Loan when...

Use a conventional loan if you're not VA-eligible, or in narrow cases where high VA funding fees outweigh the benefit (rare).

Our Verdict

For anyone who qualifies, the VA loan is one of the best mortgage products available — zero down, no PMI, lower rates. The only meaningful downside is the upfront funding fee, which is waived for veterans with service-connected disabilities. If you're eligible, use the VA benefit.

Frequently Asked Questions

What is the difference between VA Loan and Conventional Loan?

VA loans are guaranteed by the Department of Veterans Affairs and available to qualifying veterans, active military, and some surviving spouses. They allow 0% down, no PMI, and competitive rates — usually a better deal than conventional for those who qualify.

When should I choose VA Loan over Conventional Loan?

Choose a VA loan whenever you're eligible — the combination of 0% down and no PMI typically beats any other option.

When should I choose Conventional Loan over VA Loan?

Use a conventional loan if you're not VA-eligible, or in narrow cases where high VA funding fees outweigh the benefit (rare).

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