FHA and VA Loan Requirements 2026: Credit Scores, Down Payments, Fees and Limits
Short answer: FHA takes 3.5% down with a 580 score (10% down from 500) and charges mortgage insurance for the life of most loans. VA takes 0% down with no monthly insurance for eligible service members and veterans, charging a one-time funding fee instead. Above a 720 score with 10%+ down, a conventional loan usually beats both.
Side by side
| Requirement | FHA | VA | Conventional (for comparison) |
|---|---|---|---|
| Minimum credit score | 580 (3.5% down); 500–579 (10% down) | No official minimum; most lenders 580–620 | 620 |
| Minimum down payment | 3.5% | 0% | 3% (first-time programs) / 5% |
| Mortgage insurance | 1.75% upfront + 0.55%/yr on most loans; life of loan if <10% down | None | PMI until 20% equity |
| Funding / guarantee fee | — | 2.15% first use, 3.3% subsequent (0% down); lower with 5%+ down; waived for disability-rated veterans | — |
| Back-end DTI | 43%; up to ~56.9% with compensating factors | 41% guideline; residual income test | 43%–50% |
| Loan limits (2026) | Set by county; from the FHA floor to the high-cost ceiling | None for full entitlement | Conforming limit by county |
| Occupancy | Primary residence only | Primary residence only | Primary, second home or investment |
| Property condition | FHA appraisal with minimum standards | VA appraisal with Minimum Property Requirements | Standard appraisal |
| Seller concessions | Up to 6% | Up to 4% plus all closing costs | 3%–9% by down payment |
FHA in detail
FHA loans are insured by the Federal Housing Administration and made by ordinary lenders. The credit flexibility is real — a 600 score that would fail conventional underwriting is routine for FHA — and the 3.5% down payment can be a gift. The cost is mortgage insurance: on a $400,000 loan, $7,000 upfront (usually financed) and about $183 a month, and if you put down less than 10% it never drops off. The exit is a refinance into a conventional loan once you have 20% equity, which the Refinancing Guide covers. FHA also requires the home to meet minimum property standards, which can be a problem for fixer-uppers unless you use an FHA 203(k) renovation loan.
Best credit for an FHA loan: 580 is the floor for 3.5% down, but lenders set their own overlays and many want 620–640. Above 680, compare conventional pricing — the FHA rate is often a little lower, but PMI on a conventional loan is usually cheaper than FHA MIP at that score and, unlike MIP, it ends.
VA in detail
VA loans are guaranteed by the Department of Veterans Affairs for active-duty members, veterans, National Guard and Reserve members with qualifying service, and some surviving spouses. There is no down payment, no monthly mortgage insurance, and no loan limit if you have full entitlement. The funding fee (2.15% of the loan on first use with no down payment, 3.3% on later uses, less with a down payment, waived for veterans receiving disability compensation) is usually financed. VA underwriting leans on residual income — what is left after housing and debts — rather than a hard DTI cap, which is why VA borrowers are often approved at DTIs conventional lenders would reject. The VA appraisal enforces Minimum Property Requirements (safe, structurally sound, sanitary), so some older or distressed homes do not qualify.
Which to choose
- VA-eligible? Use it unless you have 20% down and a 740+ score, where conventional is comparable and avoids the funding fee.
- Score under 660 or down payment under 5%? FHA will almost always be cheaper and easier than conventional.
- Score 700+ and 10% or more down? Conventional — lower total insurance cost and it ends.
- Buying a rental or second home? Conventional only; FHA and VA are for the home you live in.
Run the two payments in the Mortgage Calculator (add 0.55% to the rate as a rough FHA MIP equivalent) and read FHA vs Conventional for the full comparison with 2026 numbers.