FHA, VA, and Conventional Loans Explained Simply

Mortgages can be confusing, especially when you're trying to figure out which type is right for you. FHA, VA, and conventional loans each have different requirements, benefits, and trade-offs. This guide breaks them down in plain English—so you can make a confident decision.

🏦 What Is a Conventional Loan?

A conventional loan is not backed by the government. It’s issued by private lenders and typically requires:

• Minimum 620 credit score
• 3–20% down payment (often 5% or more for better rates)
• Lower debt-to-income ratio
• Private Mortgage Insurance (PMI) if putting down less than 20%

Best for: Buyers with strong credit, stable income, and the ability to make a larger down payment.

🏠 What Is an FHA Loan?

An FHA loan is insured by the Federal Housing Administration, making it more accessible for first-time and lower-credit buyers.

• Minimum 580 credit score (or 500 with 10% down)
• As little as 3.5% down
• More lenient on debt-to-income ratio
• Upfront and ongoing mortgage insurance required

Best for: Buyers with modest savings or less-than-perfect credit.

🎖 What Is a VA Loan?

A VA loan is a benefit for eligible veterans, active-duty service members, and certain military spouses. It's guaranteed by the Department of Veterans Affairs.

• No down payment required
• No PMI
• Competitive interest rates
• One-time funding fee (can be rolled into loan)

Best for: Eligible military buyers looking for low upfront costs.

🔍 Key Differences at a Glance

Feature	FHA	VA	Conventional
Down Payment	3.5%+	0%	3%–20%+
Credit Score Needed	580+	Flexible	620+
PMI or MIP	Yes	No	Yes (if <20% down)
Income/Debt Flexibility	High	Moderate	Low
Who It’s For	First-time buyers	Military-affiliated	Buyers with strong credit