FHA vs VA

FHA vs. VA

Advantages w/VA:
1. no down payment if qualify
2. no monthly mi insurance . vs. .55 on FHA
3. funding fee is waived if 10% or more disabled from military
4. up to: 4% of true closing costs paid by seller + discount points

Advantages w/FHA:
1. Easier to qualify: up to: 56.9% diti for fha vs. 41-43% max VA
2. FHA usually has .125% lower rate than VA
3. FHA allows non-married co-borrowers income to qualify, vs. VA does not
4. FHA appraisal ordered from list of lenders approval list, VA uses their own appraisers
5. FHA usually can close faster – as little as 2 weeks, VA takes usually 4 weeks
6. FHA does not use any residual income to qualify, VA does – may make harder to qualify ( residual income is income left over each month)

Changes to FHA coming soon:
• 4/1 up front mi premium, now: 1.75% going to: 2.25% - affects payment on a $250,000 sales price: $7.24 p/m
• At some point during summer, FHA will max out seller assist to: 3%, now 6%


Which loan is best?
It comes down to a case by case basis. FHA is usually more widely accepted by listing agents in our area, some agents have spent 15 years selling homes and never sold a home using a VA loan. So..... at times, a seller / listing agent maybe more likely to accept an offer from an FHA buyer, than a VA buyer.