Eligibility

• Only veterans who meet specific service requirements are eligible for a VA loan. Anyone is eligible to apply for an FHA or conventional loan.
  
  

Function

• FHA loans and VA loans are backed to a certain amount by the Federal Housing Administration and the Department of Veterans Affairs. This helps banks lend with more confidence because the loans are guaranteed by a third party, unlike conventional mortgages.
  
  

Down Payments

• VA loans do not require any down payment. FHA loans can have a down payment as low as 3.5 percent. Conventional loans prefer a down payment of 20 percent or more but can go as low as 5 percent.
  
  

Credit Requirements

• To get a conventional mortgage, you must have a good credit score. For VA and FHA loans, the requirements are lower because of the federal government guarantee on the loans.
  
  

Additional Fees

• VA loans carry a fee to fund the VA loan program that range from 0.5 to 3.3 percent of the loan. FHA loans are charged an up-front mortgage insurance premium of up to 3 percent (2.75 percent for first-time home buyers). Conventional mortgages may charge for private mortgage insurance if you do not pay at least 20 percent as a down payment.