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Home Financing for Military Families

The VA Loan Is Great.
It Is Not the Only Option.

Most military families know about the VA loan. Fewer know when it is the right tool, when it is not, and what other programs exist that can be stacked on top of it or used instead. Here is the full picture.

Compare Loan TypesWhich Is Right for Me?
90%+
of veterans who use a VA loan say they would use it again
$0
down payment required on a VA loan with full entitlement
6+
loan types available to military families, depending on situation
$0
VA funding fee for veterans with 10%+ service-connected disability

Know Your Options

Loan Types Side by Side

Each loan type has a use case. The right choice depends on your eligibility, your credit, where you are buying, and how much equity you have to work with.

VA Loan

Best for Most Eligible Veterans and Servicemembers
Down Payment
None required
Mortgage Insurance
None
Min. Credit Score
Typically 620+
Loan Limits
No loan limit with full entitlement

Who It Is For

Active duty (90+ days), veterans with honorable discharge, surviving spouses in some cases

Advantages

  • +No down payment required
  • +No private mortgage insurance (PMI)
  • +Competitive interest rates
  • +Lenient credit requirements
  • +Limits on closing costs
  • +Assumable by another qualified buyer
  • +Can use the benefit multiple times

Watch Out For

  • -VA funding fee required (0.5% to 3.3% depending on service and down payment)
  • -Property must meet VA Minimum Property Requirements
  • -Appraisal process can be stricter
  • -Not available for investment properties or vacation homes

Good to know: The funding fee can be financed into the loan. Veterans with a service-connected disability of 10% or higher are exempt from the funding fee entirely.

FHA Loan

Good When VA Is Not Available or Credit Is Rebuilding
Down Payment
3.5% (with 580+ credit score)
Mortgage Insurance
Required for the life of the loan if less than 10% down
Min. Credit Score
580+ for 3.5% down; 500-579 for 10% down
Loan Limits
Varies by county ($498,257 to $1,149,825 in 2024)

Who It Is For

Any buyer who meets income and credit requirements — including military members who do not yet qualify for VA benefits

Advantages

  • +Low down payment option
  • +More flexible credit requirements than conventional loans
  • +Can be used for properties in less-than-perfect condition with the right lender
  • +Good bridge option while building credit after transition

Watch Out For

  • -Mortgage insurance premium (MIP) required upfront and monthly
  • -MIP stays for the life of the loan if you put less than 10% down
  • -Lower loan limits in some markets
  • -Generally a worse deal than VA if you qualify for VA

Good to know: FHA is often used by servicemembers who are still on active duty and do not yet have the 90 days of service required to trigger VA eligibility, or by veterans rebuilding credit after transition.

Conventional Loan

Best When You Have a Large Down Payment or Strong Credit
Down Payment
3% to 20% (PMI required below 20%)
Mortgage Insurance
Required below 20% down; cancellable once equity reaches 20%
Min. Credit Score
620+ minimum; best rates at 740+
Loan Limits
Conforming limit $766,550 (2024); jumbo loans above that

Who It Is For

Buyers with strong credit and some down payment saved, or those buying properties that do not meet VA or FHA requirements

Advantages

  • +No property condition restrictions
  • +PMI cancellable at 20% equity (unlike FHA)
  • +Works for investment properties and vacation homes
  • +No funding fee
  • +Faster appraisal process in most cases

Watch Out For

  • -Higher credit score and down payment requirements
  • -PMI required without 20% down
  • -Generally higher rates than VA for veterans who qualify
  • -Less flexible for buyers with significant debt-to-income ratio

Good to know: Some military families who have sold a previous home with significant equity use conventional loans to avoid the VA funding fee or to purchase a second property. It is worth running the numbers with a military-savvy lender.

USDA Loan

Zero Down in Rural and Suburban Areas
Down Payment
None required
Mortgage Insurance
Annual guarantee fee (0.35% annually, much lower than FHA MIP)
Min. Credit Score
Typically 640+
Loan Limits
Income limits apply; loan limits based on area median income

Who It Is For

Buyers purchasing in USDA-eligible areas (many suburban areas qualify, not just rural farms) within income limits

Advantages

  • +No down payment required
  • +Lower guarantee fee than FHA MIP
  • +Competitive interest rates
  • +Works for primary residences in eligible areas

Watch Out For

  • -Geographic restrictions — property must be in an eligible area
  • -Income limits apply
  • -Longer processing times
  • -Cannot be used to buy investment properties

Good to know: USDA eligibility maps often surprise people. Many suburban neighborhoods within 30 to 45 minutes of a base qualify. If you are being stationed at a more rural installation, check USDA eligibility before assuming you need a VA or conventional loan.

Jumbo VA Loan

High-Cost Markets with Full or Partial Entitlement
Down Payment
Zero with full VA entitlement; partial down payment may be required with bonus entitlement
Mortgage Insurance
None
Min. Credit Score
Lender-specific, typically 640 to 720+
Loan Limits
Above conforming loan limits; lender sets maximum

Who It Is For

Veterans purchasing in high-cost markets like San Diego, DC, Honolulu, or Northern Virginia where base prices exceed conforming loan limits

Advantages

  • +No PMI even on high-value loans
  • +VA rates often beat conventional jumbo rates
  • +No down payment with full entitlement in most cases

Watch Out For

  • -Lenders impose their own overlays — requirements vary significantly
  • -Fewer lenders specialize in jumbo VA loans
  • -Processing can be slower

Good to know: Since the VA removed loan limits in 2020 for veterans with full entitlement, many veterans in high-cost markets are discovering they can buy without a down payment even on $900,000 or $1,000,000+ homes. This is one of the most underused VA benefits.

State Military Mortgage Programs

Check Your State Before You Close
Down Payment
Varies by program; many offer down payment assistance
Mortgage Insurance
Varies
Min. Credit Score
Varies by program
Loan Limits
Varies by state and program

Who It Is For

Varies — some are for active duty, some for veterans only, some for first-time homebuyers, some for any military family

Advantages

  • +Down payment assistance on top of VA or FHA
  • +Below-market interest rates in some states
  • +Closing cost grants in some programs
  • +Can often be stacked with VA benefits

Watch Out For

  • -Many are first-time homebuyer programs only
  • -Income and purchase price limits apply
  • -Require the home to be a primary residence
  • -Some programs have waiting lists

Good to know: States like Texas, Virginia, Florida, North Carolina, and Colorado have strong veteran mortgage assistance programs that can be combined with a VA loan to reduce or eliminate out-of-pocket costs at closing. Check our State Benefits pages for specifics.

By Situation

Which Loan Fits Your Situation?

If you are

First PCS, buying for the first time, eligible for VA

Likely best fit

VA Loan

No down payment, no PMI, competitive rate. Nothing touches it for first-time buyers with eligibility.

If you are

Active duty, under 90 days of service or not yet VA-eligible

Likely best fit

FHA or Conventional

FHA for lower credit or limited down payment. Conventional if you have 10-20% saved and good credit.

If you are

Buying in a high-cost area (DC, San Diego, Honolulu, Northern Virginia)

Likely best fit

Jumbo VA Loan

VA removed loan limits for full-entitlement borrowers. No PMI on a million-dollar home is enormous.

If you are

Buying near a smaller installation in a suburban or rural area

Likely best fit

VA Loan + check USDA eligibility

Many areas around mid-sized installations qualify for USDA. Run both scenarios with your lender.

If you are

Selling a home with significant equity, buying the next one

Likely best fit

Run VA vs. Conventional both

If equity covers 20%+ of the next purchase price, a conventional loan avoids the VA funding fee and may come out ahead. Do the math.

If you are

Veteran with 10%+ VA disability rating

Likely best fit

VA Loan — always

You are exempt from the VA funding fee. That is $5,000 to $10,000+ you just keep. No other loan type competes.

Work With a Lender Who Knows Military Financing

General mortgage lenders often default to recommending what they know best, not what is best for you. A lender who works regularly with VA loans, understands the funding fee exemption for disabled veterans, knows how to stack state programs on top of a VA loan, and has experience with PCS timelines is worth finding before you start shopping for homes.

The agents on our platform are connected to lenders who specialize in military and veteran financing. They know which programs are available in your area and how to use them together.

Find a Military-Savvy AgentLearn About Assumable VA LoansCheck State Mortgage Programs