VA Vs FHA Vs Conventional

Dated: June 10 2016

Views: 454

I've gotten a lot of questions lately regarding what program is BEST for clients. Here's a quick breakdown of what each program does and how you qualify:

FHA - Requires 3.5% of the purchase price for a down payment. 580 FICO credit score usually required. FHA loans can also be used to do renovation projects or "fixes" prior to closing on the house! If you need a new roof on a house but everything else is nice and passes inspection, you can use what's called an FHA 203k loan to roll the cost of putting on a new roof into the FHA loan and have no extra money out of your pocket! Because of the nature of this program, FHA buyers are also eligible to receive up to 6% of the purchase price from the seller of the house to pay for closing costs!!!!

VA- For Veterans or spouses of Veterans that died in line of duty. 0% down payment!!! VA Buyers are also eligible to receive up to 4% of the purchase price from the seller of the house to pay for closing costs. 

Conventional - Between 5% and 20% down payment OR 20% plus. Any % LESS than 20% still requires Private Mortgage Insurance to be paid for by the buyer so it is a huge benefit if you can put the full 20%+ as a down payment. Conventional loans are also generally less strict on condition of the property being purchased. That doesn't mean you can purchase something with MAJOR issues and they'll look past it, but minor fixes required by FHA and VA loans are not always necessary with Conventional loans.

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