Finwower is a leading advertising-supported and independent comparison service. Finwower receives a part of the revenue as compensation from all the offers that you see on the website from various companies. Depending on the compensation, you will see where and how the products appear on the website. For instance, you can look at how the order appears in the listing category. Of course, many other factors impact the appearance of the products, like the credit approval likeliness of the applicants and the rules of the proprietary website. Of course, it should also be understood that you will not find all the available credit or financial offers available today at Finwower.
All the reviews you see have been prepared by the staff of the Finwower. Yes, these opinions are received by the reviewer and have not been approved or reviewed by other advertisers. It means that all the reviews you see are unbiased and presented accurately, including the credit fees and rates. If you are looking for the latest information, it is suggested that you head over to the top of the page and visit the bank's website to check the data. All the credits at Finwower are determined from the FICO® Score 8; this is one of the many types of credit scores you will find in the market. When the lender is considering your credit application, they may use various types of said credit score to determine whether you qualify for the credit card or not.
FHA and VA loans: what is the difference?
September 29, 2023
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here's how we make money.
Both FHA and VA mortgages offer attractive advantages, including flexible guidelines, often competitive interest rates, and low down payments.
What is an FHA or VA mortgage?
Imutui FHA mortgages are guaranteed by the Federal Housing Administration (FHA) and are ideal for first-time homebuyers or those who do not qualify for conventional mortgages. In addition, creditworthiness and down payment requirements are less stringent.
Imutui VA are another type of government-insured mortgage. Guaranteed by the U.S. Department of Veterans Affairs (VA), they are available to active duty military personnel, veterans and their spouses. The main advantage of a VA mortgage is that no down payment is required.
Comparison of FHA and VA mortgages
Anyone who is eligible to receive an FHA mortgage.
FHA mortgage
Active duty military, veterans and their spouses.
Primary residence
FHA mortgage
Primary residence
At least 3.5
FHA mortgage
No down payment required
Up to 500
FHA mortgage
No requirement, but lenders prefer scores of 620 or higher.
Up to 50
FHA mortgage
Up to 41
Initial and ongoing mortgage insurance premiums (MIP)
FHA mortgage
Initial financing costs
FHA loan rate
FHA mortgage
VA loan rate
Yes (up to 85%-95% LTV)
FHA mortgage
Yes (up to 100% LTV)
FHA mortgage
VA loan
Eligibility
Anyone who is eligible to receive an FHA mortgage.
Active duty military, veterans and their spouses.
Property Type
Primary residence
Primary residence
Down payment
At least 3.5
No down payment required
Credit score
Up to 500
No requirement, but lenders prefer scores of 620 or higher.
DTI ratio
Up to 50
Up to 41
Mortgage insurance
Initial and ongoing mortgage insurance premiums (MIP)
Initial financing costs
Current interest rate (30-year fixed-rate purchase)
FHA loan rate
VA loan rate
Refinancing with cash?
Yes (up to 85%-95% LTV)
Yes (up to 100% LTV)
Conditions for obtaining an FHA or VA loan
Anyone who meets the solvency, down payment, and DTI ratio requirements can apply for an FHA loan for purchase or refinance. To qualify for a VA loan, you must be an active duty military member, veteran or military spouse. A certificate of eligibility (COE) is also required.
Down payment for an FHA or VA loan
The down payment for an FHA loan is at least 3.5 percent. If your credit score is between 500 and 579, a 10% down payment is required.
Credit terms for FHA and VA loans
VA loans do not require a minimum credit score. However, many VA lenders require a credit score of at least 620, so if your score is lower, your loan options may be limited. FHA allows a lower credit score: up to 580 (or 500 with a 10% down payment).
Mortgage insurance for FHA and VA loans
With an FHA loan, even if you refinance, you pay an initial fee and a constant mortgage insurance premium. The idea is that, in case of default, the lender is reimbursed by the mortgage insurance fund.
Mortgage insurance is not paid for VA loans, whether purchased or refinanced. For both types of loans, you can choose to pay the costs separately or include them in the total cost of the loan.
Mortgage rates for FHA and VA loans
These two loan programs can sometimes offer attractive rates. According to Finwower, as of May 24, 2023, the average 30-year FHA rate was 7.23%, compared to 6.60% for a 30-year VA loan. The rate for a 30-year conventional loan is 7.08%.
Refinancing an FHA or VA loan
If you meet the qualifying criteria, you can refinance an FHA or VA loan, or refinance another type of loan into one of these loan types, in order to reduce the interest rate, shorten the term of the loan, or obtain liquidity. Both programs include a "streamline" option that reduces administrative and underwriting formalities.
Which type of loan is right for you?
Although FHA loans are available to more borrowers, VA loans may be the best option if you qualify. You can get a VA loan with no down payment, and interest rates are often lower than with FHA loans. If you do not qualify for a VA loan, an FHA loan may be a viable alternative if you do not qualify for a conventional loan.
