What Is the Difference Between FHA, Conventional, and VA Loans?

FHA Loans

Backed by the Federal Housing Administration. Typically require 3.5% down with a credit score of 580 or higher. For FHA loans with less than 10% down, mortgage insurance (MIP) is required for the life of the loan. For FHA loans with 10% or more down, MIP is required for 11 years. Available to all qualified borrowers regardless of military service.

Conventional Loans

Not backed by the government. May allow as low as 3% down for qualified first-time buyers, though 5-10% is more common. Private mortgage insurance (PMI) is typically required with less than 20% down. PMI can be cancelled automatically once the loan balance reaches 78% of the original value, or removed at the borrower's request when the balance reaches 80% of the original value. These thresholds are based on the original purchase price or appraised value at the time of origination, not the current market value. Refinancing may also eliminate PMI. Credit score requirements vary by lender but 620+ is common.

VA Loans

Backed by the Department of Veterans Affairs. Available to eligible veterans, active-duty service members, and surviving spouses. May allow zero down payment. No private mortgage insurance is required, but a funding fee may apply. The VA itself does not set a minimum credit score for its loan guarantee. Individual lenders may apply their own credit-score requirements as part of their underwriting standards.

Key Differences at a Glance