Most buyers who ask me about FHA have been told it's the loan for people with bad credit. Most veterans who ask about VA have been told sellers won't take their offer. Both ideas are years out of date, and both cost people money every month.
FHA is a loan the government insures so a lender can accept a smaller down payment and a thinner credit file. You pay for that insurance, up front and every month, and on most FHA loans it never goes away. VA is a loan the government guarantees for people who served. There is no down payment, no monthly mortgage insurance, and the rate is usually the lowest on the board. If you're eligible for VA, the question is rarely FHA or VA. It's VA or conventional, and we'll look at that on the same page.
You’re probably thinking:
"FHA is for people who can't qualify for anything else."
It's for people whose down payment or credit file doesn't fit the conventional box today. Plenty of them have strong income. The trade is the mortgage insurance, and we'll talk about how to get out of it later.
"Sellers don't take VA offers."
Some agents still believe that, and they're wrong. A VA appraisal has a few extra checks on the condition of the house. That's it. In a market that's cooled, a clean VA offer with a real pre-approval competes fine, and I write the offer myself.
Buyers pick FHA or VA because of the down payment. Then they live with the payment for years. The right question is what each loan costs to carry every month once the insurance, the funding fee, and the rate are all in, and whether that payment still fits the year after the furnace goes.
FHA's monthly insurance is the piece people forget. VA's funding fee is the piece they don't know about; it's usually rolled into the loan and waived entirely for veterans with a service-connected disability rating. Conventional has its own insurance that drops off once you have enough equity. Three loans, three different monthly stories on the same house. That's what the second call is for: your numbers, all three side by side, before you write an offer.
The three questions I’ll ask you:
Have you or your spouse ever served, even for a short stint in the Guard or Reserve?
What's the most you'd be comfortable paying each month, before we look at what you could qualify for?
If the house you want is in a mountain county, have you checked whether it's inside the loan limit, or are we solving that too?
I've placed FHA loans for people with great credit and VA loans that beat every conventional quote in the room. The loan doesn't know your story. It only knows the numbers, and we'll know them before we pick.
— Bobby Friel · CO Home Equity
If the monthly payment were the same on both, which would you rather have: a smaller loan with insurance for life, or the bigger one with none?
Open to almost anyone
Earned through service
| FHA | VA | Conventional | |
|---|---|---|---|
| Who qualifies | Any buyer who fits the guidelines | Veterans, service members, some Guard and Reserve, eligible surviving spouses | Any buyer who fits the guidelines |
| Down payment | Small | None | Small to moderate; larger avoids insurance |
| Mortgage insurance | Up front and monthly; usually for the life of the loan | None monthly; one-time funding fee, often rolled in, waived with a disability rating | Monthly until you reach enough equity, then it drops |
| Credit posture | Most forgiving | Forgiving; residual-income test matters more than score | Least forgiving |
| Loan size in Colorado | County limit; higher in mountain counties | No limit with full entitlement | County limit; jumbo above it |
| Occupancy | Must be your home | Must be your home | Home, second home, or rental |
| Someone can assume it | Yes, if they qualify | Yes, if they qualify; entitlement stays tied until released | No |
| Best for | Thin down payment, rebuilding credit | Anyone eligible | Strong credit, real down payment, or a second home |
If you're eligible for VA, start there. It wins on the monthly more often than not.
If you're not, FHA versus conventional comes down to your credit file and how long you'll keep the loan. That's a numbers question, and we answer it together on the second call.
Monthly payment · 30-yr fixed
$4,109 / mo
Working range $3,900–$4,300
That's your starting number. The exact figure comes from a conversation, not a form.
Start a ConversationA good fit
You served, or your spouse did
VA first, every time.
Your down payment is small
You'd rather buy this year than save for three more.
Your credit took a hit
And it has been healing for a while.
You're buying the home you'll live in
Both loans are built for an owner-occupied house.
Another door
You have a real down payment and strong credit
Conventional will likely cost less to carry.
The house is a second home or a rental
FHA and VA are for the home you occupy.
The price is above the county limit and you're not VA-eligible
That's a jumbo conversation.
You're planning to refinance the day rates drop
We plan the loan you'd be fine keeping.
Illustrative, not specific clients
He'd been out of the Army four years and a lender had him pre-approved FHA with a down payment his parents were helping with. On our first call I asked one question: had he ever served. He had his certificate of eligibility within a week. VA, nothing down, no monthly insurance, and the parents' money stayed in the parents' account. The offer was accepted the second weekend out.
Two years out of school, good income, a credit file that was mostly a car loan and one card. Conventional wanted a bigger down payment than she had. FHA didn't. We ran the monthly with the insurance included so nothing surprised her later, planned the equity path to a conventional refinance as a bonus rather than a promise, and she was at signing day in a month.
Here's how it goes, from the first conversation to the keys.
A meet-and-greet.
We talk about the house you want, the month you can carry, and whether you've served. You leave with an action plan, not a pitch.
Through my secure client portal, or by phone if that’s easier.
For VA, we request your certificate of eligibility at the same time.
Now there's real data.
FHA, VA, and conventional, side by side, on your numbers. We pick together.
A pre-approval built on verified income, not a guess.
If I'm also your agent, I write the offer the same day.
FHA and VA appraisals check the condition of the house a little harder.
I've seen what they flag, and we handle it before it's a problem.
Papers, keys, done.
Our insurance partner has the policy bound before you sit down.
Timing depends on the house and the file. Most of my buyers are at signing day within about a month of an accepted offer.
I've been in lending since before FHA and VA were the loans everyone forgot to explain. The pattern hasn't changed: the buyer hears one word from a friend, a lender confirms it because it's easy, and the buyer carries the wrong loan for a decade.
VA is the best consumer mortgage in America, and I've watched eligible buyers get steered into FHA because nobody asked a question. FHA is a fine loan for the right file, as long as you go in knowing what the insurance costs and what it would take to leave it behind.
You'll get both from me, on paper, with your numbers, before we pick. And because I'm also the broker on the house side for many of my buyers, the loan and the offer are built by the same person. That's the whole point of doing it this way.
One call. No pitch. You leave with a plan and a straight answer about FHA, VA, or neither.
FHA and VA loans placed by Bobby Friel, licensed mortgage broker (NMLS# 332039, Friel-Good Mortgage, Inc. NMLS# 1901977) and licensed real estate broker, based in Edwards and serving homeowners and buyers across Colorado. Insurance through our insurance partner. 42 five-star Google reviews. (720) 799-2202 · info@cohomeequity.com.
