Is VA always better than FHA for eligible veterans?

In almost all cases, yes. VA eliminates monthly mortgage insurance entirely, saving $100-$300 per month. VA also requires no down payment vs FHA's 3.5% minimum. The VA funding fee is offset by not paying monthly MI for 30 years. Exceptions include exhausted VA entitlement or when the veteran cannot be on the loan.

What is the VA funding fee and how is it different from MIP?

The VA funding fee is a one-time charge (2.15% for first use with 0% down) that goes to the VA program. Unlike FHA MIP, there is no monthly component. Veterans with 10%+ service-connected disability have this fee completely waived — worth $7,000-$20,000 depending on loan size.

How does the VA funding fee change for subsequent use?

For a second or subsequent VA loan with 0% down, the funding fee increases from 2.15% to 3.3%. With 5%+ down it drops to 1.65%. Disability status waives it entirely regardless of use number.

FHA vs VA Loan Calculator

Q: Does VA have a minimum credit score?

The VA itself does not set a minimum credit score, but most VA lenders require 620+. FHA has a hard floor of 580 for 3.5% down. For veterans with very low scores, VA financial terms are usually still better than FHA even with rate premiums.

Q: Can you use both FHA and VA on the same purchase?

No — you must choose one program. FHA and VA cannot be combined. If you are VA-eligible, you will almost always want to use your VA benefit over FHA.

For veterans eligible for both — which loan is actually better? Compare FHA (3.5% down + lifetime MIP) vs VA ($0 down + one-time funding fee + no monthly MI) side by side.

Home Price

Credit Score

Service Type

VA Loan Use

Base Interest Rate

Veteran has service-connected disability (VA funding fee waived — saves $7,525)

FHA Loan

$2,444/mo

Rate: 7.000%

Down Payment (3.5%)$12,250

Upfront MIP (1.75%, financed)$5,911

Monthly MIP$158

MIP DurationFull 30 years

Cash at Closing$12,250

Total 30-Year Extra$542,052

VA LoanLower Monthly

$2,349/mo

Rate: 6.875%

Down Payment$0 (zero down)

Funding Fee (2.15%)$7,525

Monthly MINone

MI DurationNever required

Cash at Closing$0 (no down payment)

Total 30-Year Extra$495,527

VA saves $95/month vs FHA and requires $0 down vs $12,250 cash needed for FHA.

Advanced

Zero Down Advantage, Monthly Cost & Credit Score Analysis

Deep comparison of cash required, monthly savings, and score-by-score breakdown

Net Cash Needed: VA vs FHA

VA: $0 down but 2.15% funding fee financed. FHA: 3.5% down + 1.75% UFMIP financed. Which costs more out of pocket and in the loan balance?

FHA Cash at Closing

$12,250

Down payment (min 3.5%)

VA Cash at Closing

No down payment required

FHA Financed MI

$5,911

1.75% UFMIP in loan balance

VA Financed Fee

$7,525

2.15% funding fee in loan

Item	FHA	VA
Down Payment	$12,250	$0
Upfront MI / Fee (financed)	$5,911	$7,525
Loan Balance at Start	$343,661	$357,525
Cash at Closing	$12,250	$0

Pro

Lifetime Cost, Disability Exemption & When FHA Wins

Full 30-year cost analysis and rare cases where FHA beats VA

True 30-Year Cost: VA vs FHA

FHA Total Interest

$479,437

On full FHA loan amount

FHA Total MIP (lifetime)

$62,615

Annual + upfront MIP

VA Total Interest

$488,002

On full VA loan amount

VA Funding Fee

$7,525

One-time, financed

Cost Component	FHA	VA
Total Interest Paid	$479,437	$488,002
Upfront MI / Fee (financed)	$5,911	$7,525
Annual MI Total	$56,704	$0
Total Extra Cost	$542,052	$495,527
Down Payment (cash out)	$12,250	$0

How to Use This FHA vs VA Calculator

This calculator is designed for veterans who are eligible for both FHA and VA loans and want to know which is the better financial choice.

Quick Comparison

Enter your Home Price, Credit Score, Service Type, and whether this is your first or subsequent VA loan use. The calculator computes both options: FHA at 3.5% down with MIP, and VA at $0 down with a one-time funding fee and no monthly mortgage insurance.

Disability Exemption Checkbox

If you have a service-connected disability rating of 10% or more, check the disability box. The VA funding fee is completely waived, saving thousands of dollars. This is one of the most significant benefits in the entire VA loan program.

Advanced and Pro Sections

The Advanced tier breaks down the zero-down cash advantage, monthly savings from no MI, and a score-by-score comparison. The Pro tier shows the full 30-year cost difference and explains the rare cases where FHA might actually be the better choice.

How VA and FHA Costs Are Calculated

FHA Loan = (Home Price - 3.5% Down) × 1.0175 (adds 1.75% UFMIP)
FHA Monthly MIP = FHA Loan × 0.55% ÷ 12 (for LTV above 95%)
FHA MIP Duration: Full 30 years when down payment is under 10%

VA Loan = Home Price × (1 + Funding Fee %)
VA Funding Fee: 2.15% (first use, 0% down) / 3.3% (subsequent use)
VA Funding Fee: 0% if veteran has 10%+ service-connected disability
VA Monthly MI: $0 — none required ever

VA Rate: Typically 0.25% lower than conventional at same credit profile

Example: Veteran Buying a $350,000 Home

First-time VA use, 700 credit score, 7.0% base rate

	FHA	VA
Down Payment	$12,250 (3.5%)	$0
Upfront MI / Fee	$5,903 UFMIP (financed)	$7,525 (2.15%, financed)
Loan Amount	$343,153	$357,525
Interest Rate	~7.0%	~6.75% (VA typically lower)
P&I Payment	$2,282	$2,319
Monthly MI	$157/mo (forever)	$0
Total Monthly	$2,439	$2,319
Monthly Savings (VA)	$120/month
Total MI Savings (30yr)	$56,520 in MIP avoided

VA saves $120/month and requires $12,250 less cash at closing. Over 30 years, the total advantage of VA exceeds $70,000 in this scenario.

Frequently Asked Questions

In almost all cases, yes. VA eliminates monthly mortgage insurance entirely, which alone saves $100-$300 per month. VA also requires no down payment vs FHA's 3.5% minimum. The VA funding fee (2.15% for first use) is offset by not paying monthly MI for 30 years. The only exceptions are when VA entitlement is exhausted or the veteran cannot be on the loan.

The VA funding fee is a one-time charge (typically 2.15% for first use with 0% down) that goes to the VA to sustain the program. Unlike FHA MIP, there is no monthly component. The fee can be financed into the loan. Veterans with a service-connected disability rating of 10% or more have this fee completely waived — a benefit worth $7,000-$20,000 depending on loan size.

The VA itself does not set a minimum credit score. However, most VA lenders require 620+, with some accepting 580. At lower scores, lenders add rate premiums. FHA has a hard floor of 580 for 3.5% down. For veterans with very low credit scores, finding a VA lender may be harder than finding an FHA lender, though the financial terms are usually still better with VA.

No — you choose one or the other. FHA and VA are separate government-backed programs and cannot be combined. If you are VA-eligible, you will almost always want to use your VA benefit over FHA. However, if the veteran cannot qualify (credit issues, exhausted entitlement) and a co-borrower is buying, FHA may be the right path for the household.

For a second or subsequent VA loan with 0% down, the funding fee increases from 2.15% to 3.3% — that is an extra 1.15% on the loan amount. On a $350,000 home, that is an extra $4,025. With 5% or more down, the fee drops to 1.65% for any use. If you have 10% or more down, it drops to 1.4%. Disability status waives it entirely regardless of use number.