LOAN COMPARISON

VA vs FHA Loans: Complete Nevada Comparison

Detailed side-by-side analysis of VA and FHA loans for Nevada homebuyers. Discover which government-backed loan program offers better rates, lower costs, and fits your situation.

Quick Comparison Overview

Feature VA Loan FHA Loan
Minimum Down Payment 0% (None required) 3.5% with 580+ credit
Mortgage Insurance (PMI/MIP) None Required for life (0.55% annual)
Upfront Fee 2.15% funding fee (can finance) 1.75% MIP upfront (can finance)
Minimum Credit Score 580-600 (lender dependent) 580 for 3.5% down
Typical Interest Rate 0.25-0.5% lower Competitive market rates
Property Type 1-4 units, primary residence 1-4 units, primary residence
Loan Limits (Nevada 2025) No limit with full entitlement $498,257 (Clark/Washoe)
$472,030 (other counties)
Eligibility Veterans & military only Any US citizen/resident
Seller Concessions Up to 4% Up to 6%
Best For Veterans seeking zero down First-time buyers, low credit

VA Loan Advantages

  • Zero Down Payment

    Purchase any home with $0 down - save tens of thousands upfront

  • No Monthly PMI

    Save $200-300/month vs FHA MIP - $90,000+ over loan life

  • Lower Interest Rates

    Typically 0.25-0.5% lower than FHA, saving thousands annually

  • No Loan Limits

    Veterans with full entitlement can buy any price home

  • Lifetime Reusability

    Use VA benefits multiple times throughout your life

Total Savings Example (Nevada):

$450K home: $0 down vs $15,750 (FHA 3.5%)
Monthly: $0 PMI vs ~$206 MIP
30-year savings: ~$90,000+

FHA Loan Advantages

  • Available to Everyone

    No military service required - any US citizen qualifies

  • Very Low Down Payment

    Only 3.5% down vs 5-20% conventional requirement

  • Flexible Credit Standards

    Accepts 580 credit scores, even lower with compensating factors

  • Higher Seller Concessions

    Sellers can contribute up to 6% toward closing costs

  • Gift Funds Allowed

    Entire down payment can come from family gifts

Best For:

First-time buyers who don't have military service, need low down payment, and have limited credit history or funds for down payment assistance.

Cost Comparison: Real Nevada Example

Scenario: $450,000 home purchase in Las Vegas

Let's compare the actual costs for a typical Nevada homebuyer with a 650 credit score and limited funds.

VA Loan Costs

Home Price:$450,000
Down Payment (0%):$0
VA Funding Fee (2.15%):$9,675
Total Loan Amount:$459,675
Interest Rate (6.25%):Lower
Monthly P&I:$2,830
Monthly PMI/MIP:$0
Est. Total Monthly:$3,330
Cash Needed at Closing:~$5,000

*Closing costs only (can request seller pay 4%)

FHA Loan Costs

Home Price:$450,000
Down Payment (3.5%):$15,750
Upfront MIP (1.75%):$7,599
Total Loan Amount:$441,849
Interest Rate (6.50%):Higher
Monthly P&I:$2,793
Monthly MIP (0.55%):$202
Est. Total Monthly:$3,495
Cash Needed at Closing:~$20,750

*Down + closing costs (can request seller pay 6%)

Savings Analysis

$15,750
Less Cash at Closing
(VA vs FHA)
$165/mo
Lower Monthly Payment
(VA vs FHA)
$74,650
Total 30-Year Savings
(MIP + rate difference)

Which Loan Is Right For You?

Both VA and FHA loans offer powerful benefits. Your best choice depends on your eligibility and financial situation.

Choose VA If:

  • You're a veteran or active-duty service member
  • You want $0 down payment
  • You want to avoid monthly PMI forever
  • You want the lowest possible interest rate
  • You're buying above conforming limits

Choose FHA If:

  • You don't have military service history
  • You can afford 3.5% down payment
  • Your credit score is 580-620 range
  • You need higher seller concessions (6%)
  • You're a first-time buyer seeking assistance
IN-DEPTH ANALYSIS

Down Payment Comparison

The down payment is often the biggest barrier to homeownership. Here's how VA and FHA loans differ and what that means for Nevada buyers.

VA Loan Down Payment

0%
Zero Down Payment Required

VA loans are the only major loan program that offers 100% financing with no down payment required, regardless of credit score or loan amount (up to reasonable lender limits).

No Down Payment Ever
Buy any home up to $1M+ with $0 down if you have full entitlement
Keep Your Savings
Use your savings for furnishings, emergencies, or investments instead
No Loan Limits With Full Entitlement
Veterans with full entitlement can exceed conforming limits with no down payment
Faster to Homeownership
No need to wait years saving for a down payment
Nevada Example:
Las Vegas median home price: $450,000
VA Down Payment Required: $0
*Only closing costs needed (~$5,000 or seller can pay 4%)

FHA Loan Down Payment

3.5%
Minimum Down Payment

FHA requires a minimum 3.5% down payment with a 580+ credit score. With 500-579 credit score, 10% down payment is required.

3.5% Minimum (580+ Score)
The minimum for most FHA borrowers with acceptable credit
10% Minimum (500-579 Score)
Higher down payment required for lower credit scores
Gift Funds Allowed
Entire down payment can come from family gift funds
Down Payment Assistance Available
Nevada programs can help cover the 3.5% requirement
Nevada Example:
Las Vegas median home price: $450,000
FHA Down Payment Required (3.5%): $15,750
*Plus closing costs (~$5,000) or seller can pay up to 6%
Down Payment Assistance in Nevada

Nevada Housing Division offers down payment assistance programs that can cover part or all of the 3.5% requirement for qualifying first-time buyers.

Down Payment Savings Calculator

$350,000 Home
$12,250
VA Saves vs FHA Down
$450,000 Home
$15,750
VA Saves vs FHA Down
$600,000 Home
$21,000
VA Saves vs FHA Down

VA loans allow you to keep this money for furniture, emergency fund, or investing

MORTGAGE INSURANCE

PMI & MIP: The $90K Difference

Mortgage insurance is one of the biggest cost differences between VA and FHA loans. Here's the complete breakdown and how it affects your monthly payment.

VA Loan

NO PMI
$0
Monthly Mortgage Insurance

VA loans have ZERO monthly mortgage insurance regardless of down payment amount, credit score, or loan-to-value ratio.

No Monthly PMI Payment
Save $150-300+ every single month vs FHA MIP
Never Increases
No mortgage insurance means no annual MIP increases
Can't Be Added Later
No risk of FHA-style lifetime MIP that cannot be removed
Lower Payment Qualification
Without PMI, you qualify for more house with same income
VA Funding Fee (One-Time)

VA loans have a one-time funding fee (typically 2.15% for first-time use) that can be financed into the loan. Disabled veterans are exempt. This is far less costly than FHA's lifetime MIP.

Example: $450K loan = $9,675 funding fee vs $72,720 in FHA MIP over 30 years

FHA Loan

LIFETIME MIP
$202/mo
Monthly Mortgage Insurance

FHA requires 0.55% annual MIP on the loan amount, paid monthly for the life of the loan. Cannot be removed without refinancing.

Based on $450K loan: $450,000 × 0.55% ÷ 12 = $206.25/month
Required for Life of Loan
MIP cannot be removed even if you reach 78% LTV (unless you put 10%+ down)
Upfront MIP Required
1.75% upfront MIP ($7,875 on $450K) plus 0.55% annual
Adds $72K+ Over 30 Years
$206/mo × 360 months = $74,160 total MIP cost
Refinance Required to Remove
Only way to eliminate MIP is refinance to conventional at 20% equity
FHA MIP Breakdown
Upfront MIP (1.75%): $7,875
Annual MIP (0.55%): $2,475/year
Monthly MIP: $206.25/mo
30-Year Total: $82,035

Total Mortgage Insurance Cost Comparison

Based on a $450,000 Nevada home purchase with 30-year mortgage

VA Loan Total MI Cost
$0
Zero monthly mortgage insurance over 30 years
*One-time funding fee of $9,675 can be financed (exempt for disabled vets)
FHA Loan Total MI Cost
$82K
$7,875 upfront + $206/mo × 360 months
MIP required for life of loan, cannot be cancelled without refinancing
VA Loan Saves You
$82,035
Over 30 years by eliminating lifetime FHA mortgage insurance
Plus lower interest rate typically saves an additional $15-30K
CREDIT REQUIREMENTS

Credit Score Requirements

Both VA and FHA loans are designed for borrowers with less-than-perfect credit. Here's what you need to qualify.

VA Credit Requirements

580+
Typical Minimum Score

Most Nevada VA lenders require 580-620 minimum credit score, though the VA itself doesn't set a minimum requirement.

No VA Minimum
VA doesn't mandate a minimum score - lender overlays determine requirement
580-620 Most Common
Most VA lenders in Nevada accept 580+ scores with compensating factors
Compensating Factors Help
Low DTI, stable income, cash reserves can offset lower credit scores
Manual Underwriting Available
Veterans with limited credit history can qualify through manual underwriting
Credit Score Tiers
740+ (Excellent): Best rates available
680-739 (Good): Great rates, easy approval
620-679 (Fair): Competitive rates
580-619 (Needs Help): May need compensating factors

FHA Credit Requirements

580+
Minimum for 3.5% Down

FHA requires 580 minimum credit score for the 3.5% down payment option. 500-579 scores require 10% down payment.

580+ for 3.5% Down
The standard minimum for most FHA borrowers seeking low down payment
500-579 Requires 10% Down
Borrowers with lower scores must put down 10% to qualify for FHA
Recent Bankruptcy Impact
FHA accepts applicants 2 years after bankruptcy discharge (vs 4 years conventional)
Foreclosure Waiting Period
3 years after foreclosure (vs 7 years for conventional loans)
FHA Credit Score Tiers
660+ (Preferred): Best FHA rates
620-659 (Acceptable): Standard FHA approval
580-619 (Minimum): 3.5% down possible
500-579 (Challenged): Requires 10% down

Which is Better for Your Credit Score?

680+ Credit Score
VA is Best
Get the absolute lowest rates with zero down and no PMI
580-679 Credit Score
Either Works
VA offers better long-term value; FHA easier if no military service
Below 580 Credit
Work Needed
Build credit before applying or explore FHA with 10% down

Nevada Credit Repair Tips

Pay all bills on time for 6-12 months before applying
Reduce credit utilization below 30% on all cards
Dispute errors on credit report with bureaus
Avoid opening new accounts 6 months before application
REAL-WORLD SCENARIOS

Which Loan is Best for Your Situation?

Let's compare VA and FHA loans across common Nevada homebuyer scenarios to help you make the best choice.

Scenario 1: Nevada Veteran, Good Credit, Limited Savings

Profile: Air Force veteran stationed at Nellis AFB, 720 credit score, $5,000 saved, $75K income, wants to buy $425K home in Las Vegas

VA Loan - BEST CHOICE

Down Payment: $0
Funding Fee (2.15%): $9,138 (financed)
Cash Needed: ~$4,500
Monthly P&I (6.25%): $2,674
Monthly PMI: $0
Total Monthly: ~$3,174
Why VA Wins:
  • ✓ Only needs $4,500 vs $20K for FHA
  • ✓ Saves $195/mo with no PMI
  • ✓ Keeps emergency fund intact
  • ✓ Lower rate saves additional $20/mo

FHA Loan - Not Ideal

Down Payment (3.5%): $14,875
Upfront MIP (1.75%): $7,172 (financed)
Cash Needed: ~$19,375
Monthly P&I (6.50%): $2,635
Monthly MIP (0.55%): $195
Total Monthly: ~$3,330
Why FHA Falls Short:
  • ✗ Would deplete entire savings ($5K)
  • ✗ $195/mo MIP for life of loan
  • ✗ Higher rate costs more monthly
  • ✗ Less financial cushion
Recommendation: VA Loan

Clear winner for this veteran. VA saves $14,875 upfront and $195/month forever. Total 30-year savings exceeds $85,000. FHA would leave no emergency fund.

Scenario 2: First-Time Buyer, No Military Service, Fair Credit

Profile: Teacher in Henderson, 620 credit score, $18K saved, $65K income, wants to buy $375K condo, no military service

VA Loan - Not Eligible

Cannot Use VA Loan

VA loans require military service (active duty, veteran, National Guard/Reserve with qualifying service, or eligible surviving spouse).

FHA Loan - BEST CHOICE

Down Payment (3.5%): $13,125
Upfront MIP (1.75%): $6,333 (financed)
Cash Needed: ~$17,625
Monthly P&I (6.625%): $2,381
Monthly MIP: $172
Total Monthly: ~$2,903
Why FHA Works:
  • ✓ Only option available (no military service)
  • ✓ Low 3.5% down payment manageable
  • ✓ Accepts 620 credit score
  • ✓ Still has $375 emergency fund after closing
  • ✓ Can refinance to conventional later to remove MIP
Recommendation: FHA Loan

FHA is the only government-backed option for non-military buyers. With 620 credit and 3.5% down, this teacher can become a homeowner. Plan to refinance to conventional once equity reaches 20% to eliminate MIP.

Scenario 3: Veteran + Spouse, High Debt, Needs Low Payment

Profile: Army veteran + spouse, 680 credit, $95K combined income, $35K student loans + car payment, buying $500K home in Reno

VA Loan - BEST CHOICE

Down Payment: $0
Funding Fee: $10,750 (financed)
Monthly P&I: $3,147
Monthly PMI: $0
Student Loans: $385/mo
Total DTI: 44% (Approved)
Why VA is Critical Here:
  • ✓ No PMI keeps payment $230/mo lower than FHA
  • ✓ Lower payment = qualifies with high debt
  • ✓ VA allows 50% DTI vs 43% FHA limit
  • ✓ $0 down preserves cash for debt paydown

FHA Loan - DTI Too High

Down Payment (3.5%): $17,500
Upfront MIP: $8,444 (financed)
Monthly P&I: $3,104
Monthly MIP: $230
Student Loans: $385/mo
Total DTI: 47% (Denied)
Why FHA Fails:
  • ✗ MIP adds $230/mo pushing DTI over 43% limit
  • ✗ Would need to pay down $10K+ debt first
  • ✗ $17,500 down depletes savings
  • ✗ Higher overall monthly cost
Recommendation: VA Loan Only Option

VA is the only viable path to homeownership here. The absence of PMI keeps the payment low enough to qualify despite high debt. FHA would require paying down $10K+ in debt before qualifying. VA's flexible DTI guidelines (up to 50% with compensating factors) make this possible.

Scenario 4: Veteran Buying Multi-Unit Property (House Hacking)

Profile: Marine veteran, 710 credit, $60K saved, wants to buy $650K 4-unit property in Las Vegas, live in one unit and rent others

VA Loan - BEST CHOICE

Down Payment: $0
Loan Amount: $650,000
Monthly P&I: $4,004
Monthly PMI: $0
Rental Income (3 units): -$3,150/mo
Net Housing Cost: $1,354/mo
Why VA Dominates:
  • ✓ $0 down on 4-unit = instant equity
  • ✓ No PMI saves $300+/mo on high loan
  • ✓ 75% of rental income offsets mortgage
  • ✓ Lives essentially free while building wealth
  • ✓ Keeps $60K for reserves & improvements

FHA Loan - Also Possible

Down Payment (3.5%): $22,750
Loan Amount: $627,250
Monthly P&I: $3,965
Monthly MIP: $287
Rental Income (3 units): -$3,150/mo
Net Housing Cost: $1,602/mo
Why VA is Still Better:
  • ⚠ Needs $22,750 down (vs $0 VA)
  • ⚠ MIP adds $287/mo ($103K over 30 years)
  • ⚠ $248/mo more expensive than VA
  • ⚠ Less cash for repairs/vacancies
Recommendation: VA Loan for House Hacking

VA loan is the ultimate house-hacking tool. Buy a 4-unit with $0 down, live in one unit, rent the other three. Rental income covers 75%+ of the mortgage. No PMI means maximum cash flow. This strategy builds wealth while living nearly rent-free. FHA works but VA is vastly superior for this exact scenario.

FREQUENTLY ASKED QUESTIONS

VA vs FHA Questions Answered

Common questions Nevada homebuyers ask when choosing between VA and FHA loans

Still Have Questions?

Our Nevada VA loan specialists can help you determine whether VA or FHA is the best fit for your situation