FHA vs conventional loans, plus VA and USDA: side-by-side comparison
By the CallARealtor team · Published November 3, 2026 · Updated November 3, 2026
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Not sure which loan? Compare FHA, VA, USDA and conventional loans.
FHA vs VA vs USDA vs conventional at a glance
| Loan type | Minimum down payment | Credit score | Ongoing mortgage insurance | Upfront fee | Who can use it | Who it is not for |
|---|---|---|---|---|---|---|
| Conventional | 3% for some first-time buyer programs; often 5%+ | Varies by lender; 620 has long been the usual minimum | PMI if under 20% down; can be cancelled at 80% of the original value and ends automatically at 78% | None required | Anyone who qualifies | Buyers with weaker credit may pay high PMI |
| FHA | 3.5% with a 580+ score; 10% with 500–579 | 500+ (580+ for 3.5% down) | Upfront 1.75% of the loan plus an annual premium (0.55% for most 30-year loans with under 5% down); lasts the life of the loan unless you put 10%+ down (then 11 years) | 1.75% upfront mortgage insurance (can be financed) | Anyone who qualifies; FHA loan limits apply | Buyers with 20% down and good credit, who usually pay less with conventional |
| VA | 0% | Set by the lender (VA sets no minimum) | No monthly mortgage insurance | Funding fee: 2.15% first use under 5% down, 1.5% at 5%+, 1.25% at 10%+ (waived for many disabled veterans) | Eligible veterans, service members and some surviving spouses | Anyone without VA eligibility |
| USDA | 0% | Set by the lender | Annual fee of 0.35% of the balance | 1% upfront guarantee fee (can be financed) | Moderate-income households buying in USDA-eligible rural areas | Higher earners or homes outside eligible areas |
Program rules from HUD (FHA), the VA, USDA Rural Development and the Consumer Financial Protection Bureau, checked on November 3, 2026. Fees and limits can change; your lender gives the final figures. The same rate is used for each loan to show the effect of fees only. Real rates differ by program and borrower.
What each loan costs on a $300,000 home
| Loan | Down payment | Upfront fee | Monthly payment |
|---|---|---|---|
| Conventional, 5% down | $15,000 | $0 | $1,920 (PMI est. 0.5%) |
| FHA, 3.5% down | $10,500 | $5,066 (financed) | $1,995 |
| VA, 0% down | $0 | $6,450 (financed) | $1,937 |
| USDA, 0% down | $0 | $3,000 (financed) | $2,003 |
The VA loan has the lowest monthly cost here because it has no monthly mortgage insurance. FHA usually suits buyers with lower scores; conventional often wins once you have good credit and can put more down, because PMI can be removed later. Run your own numbers, plan your down payment, or talk to a local agent who works with first-time buyers.
FAQ
Which is cheaper, FHA or conventional?
It depends on your credit and down payment. FHA mortgage insurance usually lasts the life of the loan unless you put 10% or more down, while conventional PMI can be removed at 80% of the original value. With good credit, conventional is often cheaper over time.
Do VA loans have mortgage insurance?
No. VA loans have no monthly mortgage insurance. Most borrowers pay a one-time funding fee instead, which is waived for many veterans with service-connected disabilities.
Who qualifies for a USDA loan?
Households within USDA moderate-income limits buying a home in a USDA-eligible rural area. You can check addresses and income limits on the USDA eligibility site.
Sources: CFPB: Buying a house · Freddie Mac weekly mortgage rates · CFPB: What is PMI? · HUD: FHA loans · VA funding fee · USDA guaranteed loans
Info checked on November 3, 2026. All figures are estimates from the stated assumptions, not a loan offer. CallARealtor is not a lender or brokerage.