VA Loan vs. Conventional Loan for Military Buyers
Updated: Oct 5
Most military buyers assume the VA loan is the better choice, and often it is. But not always. As a military spouse for more than 30 years and an Arlington Associate Broker with 560+ transactions, I help families compare both before they choose.
This article is general information, not tax, legal or financial advice.
Side by side
Down payment: none required for a VA loan; as little as 3% for some conventional programs.
Mortgage insurance: none with a VA loan; usually required on a conventional loan with less than 20% down.
Upfront fee: a VA funding fee of 1.25% to 3.3% of the loan for a purchase, unless you're exempt; no funding fee on a conventional loan.
Loan limit: none for a VA loan with full entitlement; conforming limits apply to conventional loans.
Property: a VA loan must be for your home and meet VA's minimum property standards; a conventional loan can be for a primary home, second home or investment.
Appraisal: a VA appraisal, with an escape clause if it comes in low; a standard appraisal for conventional loans.
When the VA loan usually wins
You want to keep cash for reserves, moving and repairs.
You're exempt from the funding fee because you receive VA disability compensation.
You'd otherwise pay mortgage insurance on a conventional loan.
When a conventional loan can make sense
You're putting 20% or more down and want to avoid the funding fee, especially if you'd pay 3.3% for a later use.
You want to keep your VA entitlement free for a future purchase.
The property may not meet VA's standards, or it's a second home or investment.
Compare real numbers
Rates change weekly. On October 1, 2026, the 30-year fixed rate averaged 7.28%. Ask two or three lenders for Loan Estimates on both options the same day, and compare the total cost over the years you expect to own the home. Include the funding fee or mortgage insurance, not just the rate.
In Northern Virginia
High prices here make the VA loan's no-limit, no-down-payment feature especially valuable. My VA loan benefits guide and VA appraisal guide explain the details.
Sources: VA funding fee; VA loan limits; Fannie Mae, private mortgage insurance; Freddie Mac, October 1, 2026.
Last reviewed: October 2026
Comments