FHA vs VA loans: eligibility, down payment, fees and limits (2026)
Edited by Moe Ameen · Published
A VA loan is for eligible service members, veterans and some surviving spouses. It needs no down payment and has no monthly mortgage insurance, but most borrowers pay a one-time funding fee of 1.25% to 3.3%. An FHA loan is open to anyone who meets HUD's rules. You put down at least 3.5% with a 580 score and pay an upfront premium of 1.75% plus annual mortgage insurance. Both are for homes you'll live in.
Key takeaways
- VA needs no down payment if the price isn't above the appraised value; FHA needs at least 3.5%, or 10% with a score from 500 to 579.
- FHA charges 1.75% upfront plus annual MIP, 0.55% on most loans with 3.5% down. VA charges a one-time funding fee instead, and some veterans are exempt.
- FHA's 2026 one-unit limit runs from $541,287 to $1,249,125 by county. VA has no loan limit if you have full entitlement.
- HUD sets a floor of 500 for FHA. VA doesn't publish a minimum score, so the lender sets one.
Who can get a VA loan, and who can get an FHA loan?
VA loans need enough military service, or surviving-spouse status, shown on a Certificate of Eligibility. FHA has no service test.
For service members on active duty, VA asks for at least 90 continuous days [4]. Veterans who served after August 2, 1990 generally need 24 continuous months, or the full period they were called up for with a 90-day minimum [4]. Guard and Reserve members can count 90 days of non-training active duty or six creditable years [4]. Earlier service periods have their own minimums, and a discharge for a service-connected disability can count with less time [4].
Some surviving spouses are eligible too, including those who receive or are eligible for certain Dependency and Indemnity Compensation [4]. To show a lender you're eligible, you get a Certificate of Eligibility (COE). You can request it online, or the lender can request it for you [4].
FHA has no service test. Its rules are about the borrower and the loan: your credit score, how much you put down and whether you'll live in the home [1].
How much do you need to put down on an FHA vs a VA loan?
VA: nothing, as long as the price isn't above the appraised value. FHA: at least 3.5%, or 10% if your score is between 500 and 579.
VA says there's no down payment as long as the sales price isn't higher than the home's appraised value [6]. If you've used part of your entitlement before, a lender may ask for money down; most want your entitlement and down payment together to cover at least 25% of the loan [5].
FHA calls its down payment the Minimum Required Investment: at least 3.5% of the property's adjusted value [1]. The cap on a purchase is 96.5% loan-to-value [1]. With a score from 500 to 579, HUD caps the loan at 90% loan-to-value, which works out to 10% down [1].
What does FHA mortgage insurance cost compared with the VA funding fee?
FHA charges 1.75% upfront plus an annual premium, 0.55% on most 3.5%-down loans. VA has no monthly insurance and charges a one-time funding fee of 1.25% to 3.3%.
| Base loan amount | Loan-to-value | Annual MIP | How long you pay it |
|---|---|---|---|
| $726,200 or less | 90% or less | 0.50% | 11 years |
| $726,200 or less | Over 90% up to 95% | 0.50% | Life of the loan |
| $726,200 or less | Over 95% | 0.55% | Life of the loan |
| Over $726,200 | 90% or less | 0.70% | 11 years |
| Over $726,200 | Over 90% up to 95% | 0.70% | Life of the loan |
| Over $726,200 | Over 95% | 0.75% | Life of the loan |
The annual premium is billed monthly. The upfront premium can be added to the loan or paid in cash at closing, and it isn't refundable except when you refinance into another FHA loan [1].
| Loan | First use | After first use |
|---|---|---|
| Purchase, less than 5% down | 2.15% | 3.3% |
| Purchase, 5% or more down | 1.5% | 1.5% |
| Purchase, 10% or more down | 1.25% | 1.25% |
| Cash-out refinance | 2.15% | 3.3% |
| Interest rate reduction refinance (IRRRL) | 0.5% | 0.5% |
You don't pay the funding fee if you receive VA compensation for a service-connected disability, or are eligible for it but get retirement or active-duty pay instead. The same goes for surviving spouses who receive Dependency and Indemnity Compensation, and for active-duty service members with a Purple Heart [3]. On a VA purchase loan, the funding fee is the only closing cost you can roll into the loan [3].
What are the FHA and VA loan limits for 2026?
FHA's one-unit limit runs from $541,287 to $1,249,125 depending on the county. VA has no loan limit for borrowers with full entitlement.
| Units | Low-cost floor | High-cost ceiling | Alaska, Hawaii, Guam, Virgin Islands |
|---|---|---|---|
| One | $541,287 | $1,249,125 | $1,873,625 |
| Two | $693,050 | $1,599,375 | $2,399,050 |
| Three | $837,700 | $1,933,200 | $2,899,800 |
| Four | $1,041,125 | $2,402,625 | $3,603,925 |
Your county's FHA limit sits somewhere between the floor and the ceiling. HUD publishes each county's figure on its FHA mortgage limits page [2].
With full entitlement, VA says you don't have a loan limit, as long as you can afford the payment and the appraisal supports the price [5]. The loan still can't be more than the appraised value or the purchase price, whichever is lower [5]. If you've already used some entitlement, the county limit matters again. VA uses the same one-unit limits as the Federal Housing Finance Agency to work out how much entitlement you have left [5].
What credit score do FHA and VA loans require?
HUD's floor is 500, and 580 or higher gets the full 96.5% financing. VA doesn't publish a minimum score, so each lender sets its own.
For FHA, the lender uses your Minimum Decision Credit Score. With three scores that's the middle one, with two it's the lower one, and with co-borrowers it's the lowest of theirs [1]. Under 500, you can't get an FHA-insured loan. From 500 to 579 the loan is capped at 90% of the value. At 580 or higher you can get maximum financing [1].
VA's purchase loan page doesn't name a minimum score. You have to meet VA's standards and your lender's for credit, income and other requirements [6]. Bankrate says many VA lenders prefer 620 or higher [7]. What each score means and how lenders read it is in credit score for a mortgage.
If you've been through a bankruptcy, both programs have waiting periods measured from the discharge date. They're listed in rebuilding credit after bankruptcy.
Do you have to live in the home with an FHA or VA loan?
Yes. Both are for a home you'll live in. FHA wants a borrower moved in within 60 days and planning to stay at least a year.
HUD requires at least one borrower to move in within 60 days of signing and to plan on living there for at least a year [1]. FHA won't insure more than one property as your principal residence, except in the cases the handbook lists [1]. VA lists living in the home you're buying as one of its conditions for a purchase loan [6].
Glisten check
One $300,000 home, priced both ways
| FHA, 3.5% down | VA, nothing down | |
|---|---|---|
| Down payment | $10,500 | $0 |
| Base loan | $289,500 | $300,000 |
| Upfront charge | $5,066 (1.75% UFMIP) | $6,450 (2.15% funding fee) |
| Monthly mortgage insurance, first year | About $133 (0.55%) | None |
| How long the monthly charge lasts | Life of the loan (LTV over 90%) | No monthly charge |
| If the veteran is exempt from the fee | No change | $0 upfront [3] |
The upfront charges come out close: VA's is about $1,400 higher here. The gap is the monthly premium. At 3.5% down, FHA's annual premium runs for the life of the loan [1], so a borrower who could use either one keeps paying it unless they refinance. Put 10% down on the FHA loan and the premium stops after 11 years [1]. For the VA loan, putting 5% down drops the fee to 1.5% [3].
Is this right for you?
Best for
- Veterans and service members working out whether their VA benefit beats FHA on cost.
- Buyers with a score from 500 to 619 comparing what FHA's rules allow with what lenders tend to want.
Not ideal for
- Investment properties or second homes. Both programs are for a home you live in.
- Picking a lender or a rate. We don't list or rank lenders; get Loan Estimates from more than one.
Frequently asked questions
Is a VA loan always cheaper than an FHA loan?
Usually, if you can use either one, because VA has no monthly mortgage insurance [6]. The funding fee can be higher upfront than FHA's 1.75% premium, at 2.15% on a first-use purchase with less than 5% down [1][3].
Can I get an FHA loan if I'm a veteran?
Yes. FHA has no service requirement, so veterans can use it like anyone else [1]. It's often worth pricing both.
Who doesn't have to pay the VA funding fee?
Veterans who receive VA disability compensation, or are eligible for it but get retirement or active-duty pay instead. Surviving spouses on Dependency and Indemnity Compensation, and active-duty members with a Purple Heart, are exempt too [3].
Does FHA mortgage insurance ever go away?
On a loan longer than 15 years, it stops after 11 years if you put at least 10% down. With less down, it lasts for the life of the loan [1].
What is a Certificate of Eligibility?
It's the document that shows a lender you can use a VA home loan, based on your service history and duty status. You can request it online, or your lender can do it for you [4].
Can a seller pay my closing costs on a VA loan?
Yes. VA doesn't limit seller credits for closing costs, but caps seller concessions, which include paying your funding fee, at 4% of the home's reasonable value [3].
How we know this
On November 2, 2026 we read HUD Handbook 4000.1 (August 12, 2026 update) for FHA's mortgage insurance chart, score rules, down payment and occupancy, HUD Mortgagee Letter 2025-23 for the 2026 loan limits, and VA's pages on the funding fee, eligibility, loan limits and purchase loans. We cross-checked the general rules against Bankrate. The worked example is our own arithmetic from those published rates. This is general information, not a loan offer or advice, and Glisten doesn't make loans.
- Handbook 4000.1, FHA Single Family Housing Policy Handbook (August 12, 2026 update), II.A.1, II.A.2 and Appendix 1.0, HUD. Checked November 2, 2026.
- Mortgagee Letter 2025-23: 2026 Nationwide Forward Mortgage Loan Limits, HUD. Checked November 2, 2026.
- VA funding fee and loan closing costs, U.S. Department of Veterans Affairs. Checked November 2, 2026.
- Eligibility for VA home loan programs, U.S. Department of Veterans Affairs. Checked November 2, 2026.
- VA home loan limits, U.S. Department of Veterans Affairs. Checked November 2, 2026.
- VA purchase loan, U.S. Department of Veterans Affairs. Checked November 2, 2026.
- FHA vs. VA loans: What's the difference?, Bankrate. Checked November 2, 2026.