Compare
VA Loan vs. Conventional Loan
For eligible veterans, active-duty service members, and surviving spouses, the VA loan is one of the most powerful mortgage benefits in the country. But it's not always the automatic pick over Conventional — here's how the two compare and when Conventional actually wins.
Side-by-side comparison
| VA Loan Zero down, no monthly mortgage insurance, VA funding fee replaces MI. | Conventional Loan Fannie Mae or Freddie Mac loan with 3% – 20%+ down and PMI under 20% down. | |
|---|---|---|
| Minimum credit score | VA sets no minimum; lenders 580–620 | 620 typical |
| Minimum down payment | $0 with full entitlement | 3% – 5% typical |
| Monthly mortgage insurance | None, ever | PMI until 78% LTV under 20% down |
| Upfront fee | VA Funding Fee 1.25%–3.3% (waived for disabled vets) | None |
| Loan limit | None for full-entitlement borrowers | $806,500 baseline (2026) |
| Occupancy | Primary residence only | Primary, second home, or investment |
| Streamline refinance | VA IRRRL — no appraisal, no income docs | Standard rate-and-term refi |
| Eligibility | Veterans, active duty, Reserves/Guard, surviving spouses | Any borrower who meets credit and income requirements |
How to choose
- If you're eligible for VA and are buying a primary residence, VA almost always wins because you get $0 down and no PMI.
- If you already have a service-connected disability rating, VA is unbeatable — the funding fee is waived, so there's no cost to using the benefit.
- Conventional wins if: you're buying a second home or investment property (VA doesn't allow those), you're at 20%+ down (no PMI on either), or you want to preserve your VA entitlement for a future purchase.
Best for a VA Loan
- Eligible veterans buying a primary residence with less than 20% down
- Veterans with a service-connected disability rating (funding fee waived)
- Existing VA borrowers refinancing via IRRRL
- Veterans buying above the Conventional loan limit ($806,500)
Best for a Conventional Loan
- Buying a second home or investment property (VA does not allow)
- Putting 20%+ down (no PMI on either, no VA funding fee saves the cost)
- Preserving VA entitlement for a future purchase
- Buyers who prefer Conventional's simpler underwriting on some scenarios
Frequently asked questions
Is a VA loan always better than a Conventional loan?
For eligible veterans buying a primary residence with less than 20% down, VA almost always wins because of the $0 down payment and no monthly mortgage insurance. Conventional beats VA only when the veteran is buying a second home or investment property (VA doesn't allow those) or when preserving VA entitlement for a future purchase is a strategic goal.
Do I have to pay the VA funding fee?
Most VA borrowers do — the funding fee typically ranges from 1.25% to 3.3% and can be rolled into the loan. Veterans with a service-connected disability rating and certain surviving spouses are exempt from the funding fee entirely.
Can I use a VA loan for a second home or investment property?
No. VA loans are for primary residences only. For second homes and investment properties, veterans use Conventional loans or, for investment properties specifically, DSCR loans.
Can I have both a VA loan and a Conventional loan?
Yes. Many veterans keep a VA loan on one property (typically the primary residence) and use Conventional financing on a second home or investment property.