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The Difference between a VA and Conventional Loan

Posted by abreitenbach on October 1, 2021

VA loans are home loans provided by private lenders and are only available to active or retired members of the military. If you are a member of the military and looking into purchasing a home, you might have some questions about VA loans versus conventional or FHA loans and which is right for you and your family.

The two biggest benefits a VA loan offers are the fact that they don’t have a minimum credit score or down payment to qualify. Other loans require a minimum credit score (typically around 600) and a 3.5 percent down payment or higher. Another perk is that a VA loan doesn’t add PMI (pre-mortgage insurance) to your monthly payment. Conventional and FHA loans sometimes do.  A VA loan is also backed by the Department of Veteran Affairs.

The one downfall to the VA loan is the upfront funding fee that varies from 1.5 to 3.3 percent of the loan amount. However, you can negotiate that fee to be paid by the seller or roll it into your loan.

A conventional loan is best for people with a high credit score, plan to rent it out or use it as a second home, and you have enough money saved for a 20 percent down payment. A FHA loan is best for those with a lower credit score (at least a 500) and for those planning to live on the property. A VA loan is best for those who don’t have a down payment and don’t have a high credit score.

Overall, a VA loan is a great opportunity for our members of the military to purchase their dream home without the added hassle of a down payment and PMI.

United Country Real Estate is an active supporter of all military members past and present. If you’re looking to find your dream property, contact a United Country agent near you. Visit to find an office near you.


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