VA vs. Conventional: A Side-By-Side for Veterans
When the VA loan clearly wins, when conventional might edge it, and the surprisingly narrow band where it's actually close.
Down payment
VA: $0 required. Conventional: 3–20% typical, with anything under 20% triggering PMI.
For a $400K home, this is $12K–$80K in cash the VA borrower keeps.
Mortgage insurance
VA: none. Conventional: $100–$400/month PMI until you hit 20% equity (usually 6–10 years).
This is the single biggest lifetime savings advantage of the VA loan.
Closing costs
VA caps what the lender can charge you and disallows several standard fees. The seller can also pay up to 4% of the loan amount in concessions.
The one added cost is the funding fee (usually financed). For most borrowers, the funding fee is still less than 12 months of PMI on a comparable conventional loan.
When conventional might edge
If you're already putting 20%+ down AND you're funding-fee-exempt-adjacent (planning to sell in 2 years) AND you have strong credit, a conventional loan can occasionally price out slightly better.
This is a narrow band. For roughly 90% of veteran buyers, VA wins.
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