JENNY'S TIPS: FHA vs Conventional Loans and VA Loans

One of the most popular questions I get asked by my home buyers is "What is the difference between FHA loans, conventional loans (Fannie Mae and Freddie Mac) and VA loans?"  VA loans are available for qualifying Veterans only. 

Here is a general comparison:

                                                                                                                                                

FHA                                 Conventional                     VA Loans

 

3.5% Down                     5% with high                        0% down
Payment                          credit score                     

6% Maximum                  3%                                         6%

Contribution

for closing cost                  

Up Front Mortgage         No Upfront MIP                Varies depends

Insurance Premium                                                 on Veteran's status

(MIP) Financed into

the Loan                                                                                     

 

 

Monthly Mortgage         Monthly Mortgage                 None

Insurance                        Insurance with 20%

                                       Down

580 minimum                 Higher credit score               620 typically

credit score                     required                           

                                                                        

Max 1 FHA Loan            Max 4 Loans:                        Depends on

per person on                  1 Primary Residence           Veteran's entitlement  

primary residence           3 Investment Properties

These are general guidelines. Borrowers should be reviewed on a case-by-case basis. In today's market, mortgage guidelines are constantly changing as regulators try to "fix" the industry. The trend is that mortgage qualifications will only get tougher.  Best to talk to an experience loan professional and do a pre-qualification analysis.