If you qualify the VA loan is usually much better than any other loan product. However, occasionally there are circumstances where an FHA makes more sense.

Let’s compare the two:

VA                                                                          FHA

$0 Down Payment                                            3.25% Down Payment

No Mortgage Insurance                                 .5% Mortgage insurance

* VA funding fee 2.15%                                   None

Low credit score approval                             Low credit score approval is possible

Lower interest rates                                        -

*the funding fee can be paid by the seller, third party, or finance with the loan. If you have service connected disabilities, the funding fee may be waived.

Va rates are usually ¼ - ½ better.

An FHA loan may be a better option in one of these circumstances:

- Your VA entitlement is used for an existing home you plan to keep.

- You’re a subsequent user of the VA so your fee is 3.3% of the loan. If cash is available apply the 3% towards the FHA down payment and closing costs.