VA vs. Conventional Loans for Veterans With Money Down: Which Fits in 2026?
Quick answer: If you’re VA-eligible, a VA loan is usually the lower-cost choice when you put less than 20% down — there’s no monthly mortgage insurance, and if you receive VA disability compensation there’s no funding fee at all. With 20% or more down, conventional can come out ahead because it has neither PMI nor a funding fee. Keeping your VA entitlement free for a later purchase, or buying a second home or rental, are other reasons to go conventional. The honest answer comes from pricing both on the same day. (Comparing FHA too? See VA vs. FHA and FHA vs. conventional.)
Last updated: October 2026. Guidelines may change; lender overlays may be stricter.
VA vs. conventional at a glance (2026)
| VA loan | Conventional loan | |
|---|---|---|
| Who can use it | Eligible veterans, active duty, Guard/Reserve, some surviving spouses | Anyone who qualifies |
| Minimum down | $0 with full entitlement | 3%–5% for many buyers |
| Monthly mortgage insurance | None | PMI if under 20% down; can be removed as equity builds |
| Upfront fee | Funding fee: 2.15% (first use, <5% down), 1.5% at 5%+ down, 1.25% at 10%+ down | None |
| Fee exemption | Yes — e.g., veterans receiving VA disability compensation, active-duty Purple Heart recipients | N/A |
| 2026 loan limit (Duval, Clay, St. Johns, Nassau) | No VA limit with full entitlement | $832,750 (1-unit) conforming; jumbo above that |
| Property types | Primary residence only | Primary, second home, or investment |
| Seller help | Concessions up to 4% plus normal closing costs | 3% (under 10% down), 6% (10–25% down), 9% (25%+ down) on a primary home |
| Assumable later | Yes, with lender/VA approval | Generally no |
| Condos | Must be VA-approved | Must meet conventional project rules |
General program rules as of October 2026. Guidelines may change, and lender overlays may be stricter. Available for qualified borrowers; program guidelines apply.
The three down-payment scenarios
5% down: VA usually wins. The funding fee drops to 1.5% (first use), and there’s no monthly PMI. Conventional at 5% down carries PMI, priced mostly by credit score.
10% down: Still usually VA, especially with a fee exemption. The VA fee drops to 1.25%. Conventional PMI is lower at 10% down and comes off sooner — so with excellent credit, the gap narrows. Price both.
20% down: Conventional often comes out ahead for a buyer who pays the funding fee, because conventional has no PMI and no upfront fee. If you’re fee-exempt, VA may still win. Compare the rate, points and total cost — not just the payment.
Side-by-side example
$400,000 home in Duval County, first-time VA use, no disability exemption, 30-year fixed:
| Down payment | VA funding fee (usually financed) | Conventional PMI |
|---|---|---|
| 5% ($20,000) | 1.5% of $380,000 ≈ $5,700 | Yes — e.g., at 0.5% a year ≈ $158/mo until removed |
| 10% ($40,000) | 1.25% of $360,000 ≈ $4,500 | Yes — lower, removed sooner |
| 20% ($80,000) | 1.25% of $320,000 ≈ $4,000 | None |
With a VA disability exemption, every VA fee in this table is $0.
This is an estimate based on the information provided, not a quote. PMI is shown at an illustrative rate; your actual PMI depends on credit score, down payment and loan details. Rates, taxes, and insurance will vary. Rates and terms are subject to change. All loans subject to credit approval.
When conventional can make more sense
- You have 20%+ down and pay the funding fee. No PMI and no upfront fee on conventional.
- You want to save your VA entitlement. If you plan to keep this home as a rental after your next PCS, using conventional now keeps full VA entitlement ready for the next duty station. (Already keeping a VA home? See our second VA loan guide.)
- It’s a second home or rental. VA is for primary residences only. (Investment loans are business-purpose loans for non-owner-occupied rental property.)
- The condo isn’t VA-approved. Some Northeast Florida condos meet conventional rules but aren’t on VA’s list.
- Competitive offers. Some sellers still prefer conventional offers. A strong pre-approval and a clear explanation of the VA appraisal usually close that gap.
When VA is usually the better tool
- Less than 20% down — no monthly mortgage insurance.
- You receive VA disability compensation — no funding fee.
- Your credit is good but not great — VA pricing tends to be less sensitive to credit score than conventional PMI.
- You want an assumable loan — a future buyer may be able to take over your rate, subject to approval.
- Higher prices — no VA loan limit with full entitlement, which matters in Ponte Vedra, Nocatee and the Beaches.
Jacksonville details that matter
- Bases: NAS Jacksonville, Naval Station Mayport, Blount Island, Camp Blanding; Kings Bay families often buy in Nassau County.
- CDDs and HOAs in Nocatee, SilverLeaf, RiverTown and Wildlight affect qualifying on both loan types.
- Insurance and flood costs near the coast count in your payment on both.
- Florida disabled-veteran property tax exemptions can lower your payment on any loan type.
How we help
North Star Mortgage Network, Inc. is a Jacksonville mortgage broker serving Florida since 2000. We price VA and conventional side by side across many wholesale lenders on the same day, show you the 5-year and full-term cost, and let you choose. Learn more: Jacksonville VA loans · Conventional loans · VA funding fees. Already have a Loan Estimate? Send it — we’ll review it at no cost.
Next step: Get a free rate quote or call 904-880-6741.
Frequently Asked Questions
Should I use a VA loan if I have 20% down?
It depends. With 20% down, conventional has no PMI and no upfront fee, so it can cost less if you’d pay the VA funding fee. If you’re exempt from the fee, VA often still wins. Pricing both on the same day is the only way to know.
Is a VA loan cheaper than a conventional loan?
Often, when you put less than 20% down, because VA has no monthly mortgage insurance. The VA funding fee is the main extra cost, and veterans receiving VA disability compensation don’t pay it.
What is the VA funding fee with 5% or 10% down?
For a purchase, it’s 1.5% of the loan with 5% down and 1.25% with 10% down, for first use and after. With less than 5% down it’s 2.15% for first use and 3.3% after. Guidelines may change, so we confirm the current chart on your loan.
Does a VA loan have PMI?
No. VA loans have no monthly mortgage insurance at any down payment. Conventional loans carry PMI when you put less than 20% down, and it can be removed as you build equity.
Can I use a conventional loan to save my VA entitlement?
Yes. Being VA-eligible doesn’t require you to use VA. Some buyers choose conventional now so their full entitlement is available for a future home, such as after their next PCS.
What is the 2026 conforming loan limit in Jacksonville?
For a one-unit home, it’s $832,750 in Duval, Clay, St. Johns and Nassau counties. VA has no loan limit for borrowers with full entitlement.
North Star Mortgage Network, Inc. | Company NMLS #356789 | Nathan Young NMLS #325206 | 12058 San Jose Blvd, Suite 404, Jacksonville, FL 32223 | 904-880-6741 | Equal Housing Opportunity. All payment examples are estimates based on the information provided. Rates and terms are subject to change. All loans subject to credit approval. Available for qualified borrowers; program guidelines apply. VA, Fannie Mae and Freddie Mac guidelines may change, and lender overlays may be stricter. Not affiliated with or endorsed by the U.S. Department of Veterans Affairs or any government agency. Verify licensing at nmlsconsumeraccess.org.
