VA Loan vs FHA vs Conventional: Which Is Best for LA Buyers?
Real dollar breakdowns at $600K, $800K, $1M, and $1.2M. Down payment math, insurance costs over 5 and 30 years, and a decision matrix built for LA price points.
I have worked with buyers in Pasadena, Eagle Rock, Glendale, and across the San Gabriel Valley for over 13 years. The single most common question I get from first-time buyers: "Should I go VA, FHA, or conventional?"
The answer depends on three things: your military eligibility status, your credit score, and how much cash you have for a down payment. But in a market where the median home price sits above $800,000 in most LA neighborhoods, the math gets very specific very fast.
This is not a generic loan comparison. I am going to run the actual numbers at four LA price points, show you what each loan costs over 5 and 30 years, and give you a decision matrix you can use today. Every dollar amount below reflects 2026 LA County loan limits and current rate assumptions.
- The Three Loan Types at a Glance
- Down Payment Math at LA Price Points
- PMI, MIP, and Funding Fee: The Real Cost
- Credit Scores and DTI Limits
- Appraisal and Closing Cost Differences
- Refinance Options and Exit Strategies
- Decision Matrix: Your Exact Scenario
- Common Myths Debunked
- Frequently Asked Questions
Not sure which loan fits your situation? Text us for a free consultation.
✉ Text (213) 262-5092The Three Loan Types at a Glance
Before I get into the dollar-for-dollar comparisons, here is a quick overview of what separates these three loan programs for Los Angeles buyers.
Available to veterans, active-duty service members, and eligible surviving spouses. Backed by the U.S. Department of Veterans Affairs. No maximum purchase price with full entitlement.
Government-insured loan through the Federal Housing Administration. Popular with first-time buyers in Highland Park, Alhambra, and other entry-level LA markets. 2026 LA County limit: $1,209,750.
Not government-backed. Offered by private lenders, backed by Fannie Mae or Freddie Mac. Best rates go to 740+ credit scores. Most flexible for LA condos and investment properties. 2026 conforming limit: $1,249,125.
| Feature | VA | FHA | Conventional |
|---|---|---|---|
| Down Payment | $0 | 3.5% | 3-20% |
| Monthly Insurance | None | 0.55%/yr (life of loan) | 0.5-1.2%/yr (removable) |
| Upfront Fee | 2.15% funding fee | 1.75% MIP | None |
| Min Credit Score | ~620 (lender varies) | 580 | 620 |
| Max DTI | Up to 60% | Up to 57% | Up to 50% |
| Loan Limit (LA County) | No limit (full entitlement) | $1,209,750 | $1,249,125 |
| Condo Restrictions | VA-approved only | FHA-approved only | Any condo |
| Seller Concessions | Up to 4% | Up to 6% | 3-9% (varies by LTV) |
Need help figuring out which loan you qualify for? Let us run the numbers for you.
✉ Text Us Your ScenarioDown Payment Math at LA Price Points
This is where the rubber meets the road. In Glendale, you are looking at $600K for a condo. In Pasadena, entry-level single-family starts around $800K. Move into South Pasadena or San Marino and you are at $1M to $1.2M before you blink.
Here is exactly what each loan type requires you to bring to closing at four LA price points.
At $600,000 (Condos in Alhambra, Glendale, Highland Park)
| Cost Item | VA | FHA | Conventional (5% down) |
|---|---|---|---|
| Down Payment | $0 | $21,000 | $30,000 |
| Upfront Fee/MIP | $12,900 | $10,133 | $0 |
| Loan Amount | $612,900 | $589,133 | $570,000 |
| Cash Needed at Close | ~$8,000 | ~$29,000 | ~$38,000 |
At $800,000 (Single-Family in Pasadena, Eagle Rock)
| Cost Item | VA | FHA | Conventional (5% down) |
|---|---|---|---|
| Down Payment | $0 | $28,000 | $40,000 |
| Upfront Fee/MIP | $17,200 | $13,510 | $0 |
| Loan Amount | $817,200 | $785,510 | $760,000 |
| Cash Needed at Close | ~$10,500 | ~$38,500 | ~$50,500 |
At $1,200,000 (San Marino, Arcadia, Sierra Madre)
| Cost Item | VA | FHA | Conventional (5% down) |
|---|---|---|---|
| Down Payment | $0 | N/A (near limit) | $60,000 |
| Upfront Fee/MIP | $25,800 | N/A | $0 |
| Loan Amount | $1,225,800 | N/A | $1,140,000 |
| Cash Needed at Close | ~$15,500 | N/A | ~$75,500 |
Want your own personalized down payment breakdown? Text us your target price and credit score.
✉ Get Your Custom NumbersPMI, MIP, and Funding Fee: The Real Cost
This is the section most "loan comparison" articles skip. They show you the monthly payment and call it a day. But the true cost of each loan type shows up in the insurance or fees you pay over time. For buyers in the LA market, these numbers get large fast.
Let me break this down at the $800,000 price point, which is the sweet spot for Pasadena and NELA single-family homes.
Total Insurance/Fee Cost on an $800K Home
| Time Period | VA (Funding Fee) | FHA (MIP) | Conventional (PMI) |
|---|---|---|---|
| Year 1 | $17,200 (one-time) | $13,510 + $4,320/yr | $5,700/yr |
| After 5 Years | $17,200 total | $35,110 total | $28,500 total |
| After 10 Years | $17,200 total | $56,710 total | $42,000 total* |
| After 30 Years | $17,200 total | $143,110 total | $42,000 total* |
*Conventional PMI drops at 78% LTV, typically around year 8-10. FHA MIP stays for the life of the loan when putting less than 10% down.
5-Year Insurance Cost Comparison ($800K Home)
One more thing. Veterans with a VA-connected disability rating of 10% or higher pay zero funding fee. That means the total insurance cost of a VA loan for a disabled veteran is $0. Not $17,200. Zero. On a $1M home in La Canada Flintridge, that is $21,500 you never pay.
VA-eligible? Let us calculate your exact funding fee (or confirm you are exempt).
✉ Check Your VA BenefitCredit Scores and DTI Limits
Your credit score does not just determine whether you get approved. It determines how much you pay. In the LA market where loan amounts are high, even a 0.25% rate difference on an $800K loan costs $150 per month.
Credit Score Requirements by Loan Type
| Credit Range | VA | FHA | Conventional |
|---|---|---|---|
| 500-579 | Not available | Yes (10% down required) | Not available |
| 580-619 | Some lenders | Yes (3.5% down) | Not available |
| 620-679 | Yes (good rates) | Yes (good rates) | Yes (high PMI) |
| 680-739 | Yes (great rates) | Yes (great rates) | Yes (moderate PMI) |
| 740+ | Yes (best rates) | Yes (best rates) | Yes (lowest PMI, best rates) |
DTI (Debt-to-Income) Limits
DTI matters more than most buyers realize. In LA, where housing costs eat up a larger share of income, hitting the DTI ceiling is common. Here is how each loan type handles it.
Curious about your max approval amount? Text us your income and debts for a quick estimate.
✉ Get a Quick EstimateAppraisal and Closing Cost Differences
Appraisals work differently on each loan type, and in LA's older housing stock, this matters. Homes built in the 1920s through 1960s across Pasadena, Eagle Rock, and Highland Park often trigger issues on government-backed appraisals that conventional appraisals skip entirely.
| Appraisal Factor | VA | FHA | Conventional |
|---|---|---|---|
| Strictness | Strictest (MPR standards) | Strict (health/safety) | Most lenient |
| Can Waive? | No | No | Yes |
| Timeline | 10-14 days | 7-10 days | 5-7 days |
| Stays on Property | 6 months | 120 days | Buyer only |
| Pest Inspection | Required (CA) | Required if flagged | Not required |
| Older LA Homes | Peeling paint, handrails flagged | Similar flags to VA | Rarely flagged |
Closing Cost Comparison ($800K Home)
| Closing Cost Item | VA | FHA | Conventional |
|---|---|---|---|
| Title + Escrow | $4,000-$5,300 | $4,000-$5,300 | $4,000-$5,300 |
| Upfront Fee/MIP | $17,200 (can finance) | $13,510 (can finance) | $0 |
| Typical Total (excl. down) | $8,000-$10,500 | $8,000-$10,000 | $7,500-$9,500 |
Wondering about total closing costs for your specific situation?
✉ Text for a Closing Cost EstimateAlready own a home in LA? Find out what it is worth before your next move.
🏠 Get Your Free Home Value EstimateRefinance Options and Exit Strategies
Your first mortgage is rarely your last. In my experience working with buyers across Pasadena and the San Gabriel Valley, most people refinance within 3-5 years. The refinance options available to you depend heavily on your original loan type.
| Refinance Factor | VA IRRRL | FHA Streamline | Conventional |
|---|---|---|---|
| Appraisal | Not required | Not required | Required |
| Income Docs | None | Minimal | Full underwriting |
| Refi Fee | 0.5% funding fee | 0.01% upfront MIP | Closing costs only |
| Timeline | 15-20 days | 20-30 days | 30-45 days |
| Insurance After Refi | None | MIP continues (life of loan) | PMI drops at 80% LTV |
The VA IRRRL is the simplest refinance in the industry: no appraisal, no income verification, no credit check in most cases. You just need a net tangible benefit (lower rate). This alone makes VA loans worth choosing if you are eligible. Many FHA borrowers in LA eventually refinance into conventional once they have 20% equity to eliminate their lifetime MIP.
Planning to refinance later? Let us map out your exit strategy before you choose a loan.
✉ Text for Refinance StrategyDecision Matrix: Your Exact Scenario
I have put together the scenarios I see most often from buyers across Pasadena, Glendale, Eagle Rock, and the San Gabriel Valley. Find yours below.
Still not sure? Text us your situation and we will tell you which loan wins for you.
✉ Text (213) 262-5092Common Myths Debunked
After 13 years of helping buyers in LA, I hear the same myths repeated by friends, family members, and even some loan officers. Let me set the record straight.
Have a loan question that is not answered here? Text us directly.
✉ Ask a Loan QuestionThinking about selling your current LA home before buying? See what it is worth.
📊 Free Home Valuation ToolQuick Reference Cheat Sheet
| If You Want... | Choose This | Why |
|---|---|---|
| Lowest total cost over 30 years | VA | $0 down + zero monthly insurance = unbeatable |
| Lowest cash needed at closing | VA | $0 down, funding fee can be financed |
| Approval with credit under 620 | FHA | Only option that accepts 580 with 3.5% down |
| Maximum buying power (DTI) | VA | Up to 60% DTI = more purchasing capacity |
| Most condo flexibility | Conventional | No approval list required for any condo |
| Insurance that drops off | Conventional | PMI auto-removes at 78% LTV |
| Easiest future refinance | VA (IRRRL) | No appraisal, no income docs, 15-20 days |
| Purchase above $1.25M | VA or Jumbo Conv. | VA has no limit; FHA caps at ~$1.21M |
Ready to get pre-approved? We work with lenders experienced in VA, FHA, and conventional.
✉ Text for Lender IntroductionsFrequently Asked Questions
Which loan type has the lowest monthly payment in Los Angeles?
VA loans almost always produce the lowest monthly payment in LA. On an $800,000 home, a VA loan with $0 down and no PMI runs about $5,090 per month. FHA with 3.5% down plus MIP costs roughly $5,340. Conventional with 5% down plus PMI lands around $5,280. The VA advantage grows at higher price points.
Can I use an FHA loan to buy a home over $1 million in LA?
Not with a standard FHA loan. The 2026 FHA loan limit for LA County is $1,209,750. You could buy up to about $1,253,000 with the minimum 3.5% down payment. Above that, you need a conventional jumbo loan or VA loan. VA loans have no maximum purchase price for veterans with full entitlement.
How much does PMI cost on a conventional loan in Los Angeles?
PMI on a conventional loan in LA typically runs 0.5% to 1.2% of the loan amount per year, depending on your credit score, down payment, and loan size. On a $760,000 loan (5% down on $800K), that is $317 to $760 per month. PMI drops off automatically at 78% loan-to-value, usually 7-10 years into the loan.
Is the VA funding fee worth it compared to PMI?
Yes, in almost every scenario. The VA funding fee is a one-time cost of 2.15% (first use, $0 down) that can be rolled into the loan. PMI on conventional loans costs 0.5-1.2% every year until you reach 78% LTV. On an $800K home, the VA funding fee totals $17,200 once, while conventional PMI costs $45,600 to $109,440 over 10 years. Veterans with disability ratings pay zero funding fee.
What credit score do I need for each loan type in LA?
VA loans have no official minimum, though most lenders require 620. FHA accepts scores as low as 580 with 3.5% down, or 500 with 10% down. Conventional loans need 620 minimum, but you will pay significantly higher PMI below 740. For the best rates in LA's competitive market, aim for 740+ regardless of loan type.
Can I remove MIP from an FHA loan?
If you put less than 10% down on an FHA loan, the annual MIP stays for the entire life of the loan. It never drops off. The only way to eliminate it is to refinance into a conventional loan once you reach 20% equity. This is a major cost difference compared to VA loans (no ongoing insurance) and conventional loans (PMI drops at 78% LTV).
Which loan type is best for buying a condo in Los Angeles?
Conventional loans offer the most flexibility for LA condos since any condo qualifies. FHA requires the complex to be on the FHA-approved list, which eliminates many LA buildings. VA loans require VA-approved condo projects. In areas like Downtown LA, Pasadena, or Glendale, check condo approval status before choosing your loan type.
Should I put money down on a VA loan in Los Angeles?
It depends on your cash reserves. Putting 5% down on a VA loan reduces the funding fee from 2.15% to 1.5%, saving $5,200 on an $800K purchase. But $0 down is one of the VA loan's biggest advantages. If you need cash for moving costs, furniture, or an emergency fund after buying in LA, keep the money and finance the full amount.
Have a question not listed above? We are here to help.
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