VA Loan Vs FHA Loan
Both are backed by the federal government and both are built for buyers who do not fit a conventional box. They differ most on who qualifies, what you pay for mortgage insurance, and how long that cost stays with you.
Quick answer
Saxton Mortgage offers both. A VA loan needs eligibility documented with a Certificate of Eligibility, and at least one VA program we offer starts at a 580 credit score on loans up to $1,000,000. At least one FHA program we offer starts at a 500 credit score. FHA loans carry a one-time upfront mortgage insurance premium plus an annual premium collected in monthly installments.
Two federal programs, two different front doors
What each one asks of you before anything else.
- A VA loan requires a Certificate of Eligibility tied to qualifying service
- An FHA loan has no service requirement and is open to any qualified buyer
- Both ask you to live in the home as your primary residence
- Both can be used to purchase or to refinance
- Both programs offer a streamline refinance with no appraisal
- Credit, income, and lender standards apply to both
VA charges one up-front fee, FHA two premiums
No down payment with full VA entitlement
FHA is open without military service
The VA funding fee can be waived
Either program can be refinanced later
Occupancy rules are similar on both
What Actually Separates Them
Three differences decide this for most borrowers.
The first is eligibility. A VA loan is a benefit tied to service. The Department of Veterans Affairs requires a Certificate of Eligibility, and states you must also meet VA and lender standards for credit and income and intend to live in the home you are buying. An FHA loan asks none of that. It is open to any qualified buyer.
The second is mortgage insurance. VA states that a VA-backed loan means no need for private mortgage insurance or a mortgage insurance premium. An FHA loan carries both an upfront premium and a periodic premium collected along with the regular payment.
The third is how long that cost lasts. VA describes its funding fee as a one-time payment, and it is waived entirely for several groups. HUD ties the end of the FHA periodic premium to when the case number was assigned, and for most newer loans it ends only when the mortgage is paid in full.
How to choose between them
Most people are not choosing between two open doors. They qualify for one, or one is simply the better fit for their file. Here is how it usually breaks down.
Eligibility Is The First Test
If you can get a Certificate of Eligibility, a VA loan is usually worth pricing first. VA lists three conditions: you qualify for a COE, you meet VA and lender standards for credit and income, and you will live in the home you are buying.
Mortgage Insurance Is The Split
This is the clearest difference between the two. VA states that a VA-backed loan needs no private mortgage insurance and no mortgage insurance premium. An FHA loan includes both an upfront premium and a periodic one.
A Disability Rating Waives It
A veteran paid VA compensation for disabilities tied to service owes no VA funding fee. The FHA up-front premium, by contrast, is refundable only when you refinance into a new FHA-insured loan.
FHA Insurance Tends To Stay
HUD ties termination of the periodic premium to when the case number was assigned. For loans with case numbers assigned on or after June 3, 2013, HUD states the insurance can be terminated if the mortgage is paid in full before the maturity date.
Both Ask You To Live There
Neither program is for a rental you will not occupy. VA requires that you live in the home you are buying, and FHA is likewise limited to a primary residence. Both still allow a one-to-four unit property when you occupy one of the units.
Your File Decides The Rest
Credit history, income documentation, the property itself, and your entitlement position all move the answer. Two veterans with identical service can land in different places, which is why we price both before recommending either.
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Frequently Asked Questions
The questions we get asked most when someone is weighing these two.
Saxton Mortgage offers both. A VA loan needs eligibility documented with a Certificate of Eligibility, and at least one VA program we offer starts at a 580 credit score on loans up to $1,000,000. At least one FHA program we offer starts at a 500 credit score. FHA loans carry a one-time upfront mortgage insurance premium plus an annual premium collected in monthly installments.
Yes, earlier VA use does not end your benefit, and you can even keep a VA loan while taking another if your Certificate of Eligibility shows eligibility left. Entitlement that was used and never restored lowers the guaranty on the new loan, and one program notes that extra down payment may then be required*.
Yes, a VA loan requires a Certificate of Eligibility, the document that proves your service and shows the entitlement you can use. At one program, the COE must show Active or Pending status before the appraisal can be ordered through VA’s WebLGY system*. We can request it at the start so the VA side of your comparison is ready.
No, a VA loan skips the two-part premium FHA charges. FHA collects an up-front premium at closing and then an annual premium split into monthly installments, while VA’s funding fee is charged once and the borrower may finance it*.
Disabled veterans collecting VA compensation for their service-connected condition do not pay the VA funding fee. Neither do service members holding a Purple Heart who document it by closing, or surviving spouses of service-related deaths who are on DIC by the closing date*.
Yes, VA and FHA both lend on properties of up to four units, so a duplex qualifies if you occupy one side. With VA, one program sets a reserve requirement of six months when the other unit’s rent is counted. FHA adds a rent test only at three and four units, where net rents must cover the full payment*.
How long the FHA annual premium lasts depends on the loan term, the base loan amount and your down payment, under HUD’s MIP chart. The up-front premium is refundable only toward a new FHA refinance. If you are VA eligible, swapping the FHA loan for a VA cash-out refinance can end it, because VA counts eliminating monthly mortgage insurance as a benefit*.
Choose VA if you are eligible and want to buy with no down payment: full entitlement covers it, and a disability rating for service-connected conditions removes the funding fee. FHA is the route without VA eligibility, with a 500 floor at Saxton*. We can price both on the same home so you compare real numbers.
Find out what you qualify for
Tell us about your service and the home you have in mind, and we will price a VA loan and an FHA loan side by side so you can see what the difference actually is for your situation.
Get Pre-Qualified- Department of Veterans Affairs, VA-backed home loans
- Department of Veterans Affairs, VA funding fee and closing costs
- U.S. Department of Housing and Urban Development, FHA mortgage insurance premiums
Saxton Mortgage, LLC. NMLS #1717191. Equal Housing Lender. Licensed in 41 states. This is not a commitment to lend. All loans are subject to credit approval and underwriting. Program terms and eligibility are set by the Department of Veterans Affairs and the U.S. Department of Housing and Urban Development and are subject to change.