VA vs FHA vs Conventional Loans in San Diego: Real Numbers Compared
Quick Answer
In the VA vs FHA vs conventional comparison, VA usually wins for eligible buyers: no down payment, no monthly mortgage insurance, and no VA loan limit with full entitlement, in exchange for a one-time funding fee. FHA allows as little as 3.5% down and more flexible credit, but charges a 1.75% upfront premium plus an annual premium that usually lasts the life of a low-down-payment loan. Conventional rewards strong credit and larger down payments, and its private mortgage insurance can be removed as you build equity. On a Chula Vista home at the $943,000 median, our sample shows VA at about $7,530 a month with $0 down, FHA at about $7,860 with about $33,000 down, and conventional at about $6,150 with about $188,600 down.
Sources: VA.gov funding fee and entitlement pages; HUD Mortgagee Letter 2023-05; FHFA and HUD 2026 San Diego County loan limits.
What This Guide Covers
- VA vs FHA vs conventional at a glance
- What the payment looks like on a Chula Vista home
- VA vs conventional loan
- FHA vs conventional loan
- VA vs FHA loan
- FHA mortgage insurance explained
- When does PMI go away?
- 2026 loan limits in San Diego
- Condos, multi-unit homes and appraisals
- Is mortgage insurance tax deductible in 2026?
- Frequently asked questions
One of the first real decisions you make as a San Diego buyer is how you will finance the purchase, and for most people it comes down to VA, FHA or conventional. The mistake I see most often is assuming one is automatically better. The right loan depends on your eligibility, credit, cash, the property and the market for that home, and at San Diego prices the difference between programs can be tens of thousands of dollars. My job is to help you look at the real numbers before you start writing offers, not after.
VA vs FHA vs conventional at a glance
| VA | FHA | Conventional | |
|---|---|---|---|
| Who can use it | Eligible service members, veterans, Guard and Reserve members, some surviving spouses | Any qualified buyer | Any qualified buyer |
| Minimum down | 0% with enough entitlement | 3.5% | As low as 3% on some programs |
| Upfront program cost | One-time funding fee, 2.15% first use under 5% down, waived with a disability rating | 1.75% upfront premium | None |
| Monthly mortgage insurance | None | Annual premium, usually for the life of a low-down loan | PMI below 20% down, removable later |
| 2026 San Diego limit | No VA limit with full entitlement | $1,104,000, one unit | $1,104,000 conforming, one unit |
| Second home or investment | No, must live in it | No, must live in it | Yes |
What the payment looks like on a Chula Vista home
Here is the same home financed three ways: a detached home at Chula Vista’s $943,000 median. To compare the programs themselves, all three use the same rate. In practice, VA and FHA rates are often a little different from conventional rates, which is one more reason to get real quotes.
| VA, 0% down | FHA, 3.5% down | Conventional, 20% down | |
|---|---|---|---|
| Down payment | $0 | $33,005 | $188,600 |
| Loan amount | $963,275, with the 2.15% funding fee financed | $925,920, with the 1.75% upfront premium financed | $754,400 |
| Principal and interest at 6.95%, per month | $6,376 | $6,129 | $4,994 |
| Mortgage insurance, per month | $0 | about $569, at 0.75% a year | $0 |
| Property tax at about 1.2%, per month | $943 | $943 | $943 |
| Homeowners insurance, estimated, per month | about $215 | about $215 | about $215 |
| Estimated monthly payment | about $7,535 | about $7,855 | about $6,150 |
Illustrative only, as of September 2026. Price is the trailing 12-month median detached sale across all five Chula Vista zip codes from Paragon MLS, captured September 2026. The rate is the Freddie Mac Primary Mortgage Market Survey 30-year fixed average for September 17, 2026. FHA annual premium per HUD Mortgagee Letter 2023-05 for a 30-year loan above $726,200 with less than 5% down. Property tax is estimated at about 1.2% a year and insurance is an estimate that varies by home and carrier. Mello-Roos and HOA dues vary by home and are not included. Your lender will give you actual figures.
The takeaway is not that one program is best. The VA buyer gets into the home with no down payment and a lower payment than FHA. The conventional buyer has the lowest payment, but needed $188,600 more cash to get there. On top of any down payment, plan on closing costs. The rule of thumb I give buyers is about 2 to 3% of the purchase price, which seller credits can often help cover, as I explain in VA closing costs and seller concessions.
In my experience, Chula Vista is one of the biggest areas for my VA buyers, and a big reason is location. Chula Vista sits just south of National City, close to Naval Base San Diego along the bay, and not far from Naval Amphibious Base Coronado and Naval Air Station North Island. Even East Chula Vista, in communities like Eastlake, Otay Ranch and Rancho Del Rey, is relatively close to those bases compared with a lot of other parts of San Diego County. You can see what is on the market now across Chula Vista homes for sale.
VA vs conventional loan
For an eligible buyer putting little or nothing down, VA is usually the stronger choice. There is no down payment requirement if you have enough entitlement, no monthly mortgage insurance, and with full entitlement there is no VA loan limit. The trade-off is the one-time VA funding fee: 2.15% on a first-use purchase with less than 5% down, 3.3% after first use, 1.5% with 5% or more down, and 1.25% with 10% or more down. Veterans receiving VA compensation for a service-connected disability do not pay it at all.
Conventional can make more sense for a veteran putting a large amount down, buying a second home or investment property, or buying a condo in a project that is not VA-approved. Being eligible for VA does not require you to use it, so run both.
A VA buyer who put money down, El Cajon, 92021
In June 2026, repeat clients of mine bought a three-bedroom home in El Cajon for $850,000 with a VA loan. They put about $250,000 down from the sale of their townhome. Putting 10% or more down dropped their funding fee to the 1.25% tier, which came to $7,497 on a $600,000 base loan, and they still got the VA benefits of no monthly mortgage insurance. Their offer also won against four competing offers, which is exactly the kind of result I cover in VA loan misconceptions in San Diego.
FHA vs conventional loan
This is the comparison most non-VA buyers face. FHA allows 3.5% down and is more forgiving on credit scores and debt-to-income ratios, so it can be the realistic path for a buyer who is financially ready but does not fit conventional underwriting cleanly. FHA is not a consolation prize. For the right borrower, it is the correct loan.
The cost is the mortgage insurance. FHA charges a 1.75% upfront premium plus an annual premium, and on a low-down-payment 30-year loan that annual premium stays for the life of the loan. Conventional private mortgage insurance is priced on your credit and down payment, and it comes off as you build equity. With stronger credit, conventional often costs less over time, even with a smaller down payment.
Conventional also does not require 20% down. Some programs allow as little as 3% down for qualified buyers. A buyer who puts 10% down and keeps a solid cash reserve is often in a stronger position than one who drained savings to reach 20%.
VA vs FHA loan
If you qualify for both, VA usually comes out ahead. It allows no down payment where FHA requires 3.5%, and it has no monthly mortgage insurance, while FHA charges an annual premium on top of the 1.75% upfront premium. In our Chula Vista example, the VA payment is about $320 a month lower than FHA with about $33,000 less down. That is roughly $3,800 a year for as long as the FHA premium stays on the loan.
Where FHA can still fit a VA-eligible buyer is rare: usually a credit or property situation a specific lender will approve under FHA but not VA. If that comes up, it is worth a second lender’s opinion before giving up the VA benefit.
FHA mortgage insurance explained
FHA mortgage insurance has two parts, set by HUD Mortgagee Letter 2023-05:
- Upfront premium: 1.75% of the base loan amount, usually financed into the loan.
- Annual premium: paid monthly, and priced by loan amount, down payment and term. For a 30-year loan above $726,200, which covers most San Diego FHA purchases, it is 0.75% a year with less than 5% down and 0.70% with 5% to 10% down.
How long it lasts depends on your down payment. On a loan longer than 15 years, the annual premium ends after 11 years if you put at least 10% down. With less than 10% down, it stays for the life of the loan. Many FHA owners eventually refinance into a conventional loan to remove it, but that depends on rates, equity and qualifying at the time.
When does PMI go away?
Conventional private mortgage insurance is not permanent. Under federal law, you can ask your servicer to cancel PMI once your balance reaches 80% of the home’s original value, as long as you are current and meet the servicer’s requirements. It must end automatically when your balance is scheduled to reach 78% of the original value, or at the midpoint of the loan term, if you are current on payments. That removable feature is one of the biggest long-term differences between conventional and FHA.
2026 loan limits in San Diego
San Diego County is a high-cost area, so its limits sit above the national baseline of $832,750.
- FHA: $1,104,000 for a one-unit home in 2026.
- Conventional: $1,104,000 high-balance conforming limit for one unit. Above that, the loan becomes jumbo financing with different pricing and qualifying. The limit applies to the loan amount, so a larger down payment can keep a higher-priced purchase conforming.
- VA: with full entitlement, there is no VA loan limit, as long as you qualify and the appraisal supports the price. With part of your entitlement still in use, the county limit shapes how much you can borrow with no down payment, which I walk through in VA loan eligibility in San Diego and VA bonus entitlement.
Want your own VA, FHA and conventional comparison?
I will connect you with a lender who can run all three side by side on the homes you are actually considering, before you write an offer.
Condos, multi-unit homes and appraisals
The property can decide the loan. A condo needs project approval for VA and FHA, while conventional is usually the most flexible, though not guaranteed in every complex. The VA side is covered in VA loans and condos in San Diego.
All three programs can finance an owner-occupied two to four unit property, which is one of the best entry points into investing here. I cover that in house hacking in San Diego.
VA and FHA appraisals also check minimum property standards for safety, soundness and sanitation, so a fixer with active leaks, damaged wood or exposed wiring can run into required repairs. Outdated finishes are not the problem. If a home has known condition issues, settle your loan program before you spend money on inspections. What gets flagged is in the VA appraisal and MPRs.
Is mortgage insurance tax deductible in 2026?
It can be again. Starting with tax year 2026, federal law once more treats mortgage insurance premiums, including FHA premiums and the VA funding fee, as deductible mortgage interest. Two conditions limit who benefits: you have to itemize rather than take the standard deduction, and the deduction phases out as adjusted gross income rises above $100,000, disappearing at $110,000. At San Diego incomes, many buyers will be above that range. Confirm with a tax professional before counting on it.
Whatever program you lean toward, the next step is a real pre-approval, covered in my guide to mortgage pre-approval in San Diego. VA buyers should also read how much house a VA buyer can afford and my complete guide to VA home loans in San Diego.
How I help buyers pick the right loan
I always recommend working with a lender who specializes in the loan you are using, especially VA. A lender and agent who know the program understand how aggressive we can be to get an offer accepted, how to structure closing cost credits so your cash to close stays as low as possible, and when it makes sense to use seller money to buy down the rate. Anything we can do to lower that rate over 30 years shows up in your monthly payment.
My job is not to pick your loan. It is to make sure the loan fits the homes you are looking at and that the offer we write makes your financing an asset rather than a question mark. You can read what past buyers say about working with me on my client reviews page.
Frequently Asked Questions
Is a VA loan better than a conventional loan in San Diego?
For an eligible buyer who wants to put little or nothing down, VA usually wins, because there is no down payment requirement and no monthly mortgage insurance. Conventional can be the better fit for a second home, an investment property, a condo that is not VA-approved, or a buyer putting a large amount down. Compare real Loan Estimates for both before deciding.
Is FHA better than conventional for a first-time buyer?
FHA can be better when your credit score or debt-to-income ratio makes conventional financing expensive or hard to qualify for. Conventional is often better with stronger credit, because private mortgage insurance can be cheaper and can be removed as you build equity, while FHA mortgage insurance usually stays for the life of a low-down-payment loan.
VA vs FHA: which is better if I qualify for both?
For most eligible buyers, VA. It allows no down payment and has no monthly mortgage insurance. FHA requires at least 3.5% down, a 1.75% upfront premium and an annual premium paid monthly. On a Chula Vista home at the $943,000 median, our sample shows the VA payment about $320 a month lower than FHA while requiring about $33,000 less down.
What is the FHA loan limit in San Diego County for 2026?
The 2026 FHA limit for a one-unit home in San Diego County is $1,104,000. That is a limit on the loan amount, not the purchase price. Limits are higher for two to four unit properties.
How much is FHA mortgage insurance?
FHA charges an upfront premium of 1.75% of the base loan amount, which is usually financed, plus an annual premium paid monthly. The annual rate depends on the loan amount, down payment and term. On a 30-year loan above $726,200 with less than 5% down, which covers most San Diego FHA purchases, it is 0.75% a year.
Does FHA mortgage insurance go away?
On a loan longer than 15 years, the annual premium lasts 11 years if you put at least 10% down, and the life of the loan if you put down less. Many FHA borrowers remove it by refinancing into a conventional loan once they have enough equity, but a refinance depends on rates and qualifying at that time.
When does PMI go away on a conventional loan?
Under federal law, you can ask your servicer to cancel private mortgage insurance once your balance reaches 80% of the original value, if you are current and meet the servicer requirements. It must end automatically when the balance is scheduled to reach 78% of the original value, or at the midpoint of the loan term, if you are current.
How much do you need down for a conventional loan?
Some conventional programs allow as little as 3% down for qualified buyers. Putting less than 20% down usually means paying private mortgage insurance. In San Diego, a larger down payment also helps keep the loan within the $1,104,000 conforming limit and out of jumbo financing.
Can I buy a San Diego home with no money down?
Among these three programs, only VA allows no down payment. You still need money for closing costs. The rule of thumb I give VA buyers is about 2 to 3% of the purchase price, and seller credits can often cover part of it. FHA requires at least 3.5% down.
Is the VA funding fee better or worse than FHA mortgage insurance?
Usually better over time. The VA funding fee is a one-time charge, 2.15% on a first-use purchase with less than 5% down, and it can be financed. FHA charges a 1.75% upfront premium and an annual premium every month, usually for the life of a low-down-payment loan. Veterans with a service-connected disability rating do not pay the funding fee at all.
Can a veteran choose conventional financing instead of VA?
Yes. Being eligible for VA does not require using it. A veteran putting a large amount down, buying a second home or investment property, or buying a condo that is not VA-approved may be better served by conventional financing. Compare both with real numbers.
Is mortgage insurance tax deductible in 2026?
It can be again, starting with tax year 2026. Mortgage insurance premiums, including FHA premiums and the VA funding fee, are treated as deductible mortgage interest if you itemize. The deduction phases out as adjusted gross income rises above $100,000 and is gone at $110,000, so many San Diego buyers will not benefit. Confirm with a tax professional.
Ryan Fisher
Realtor · Founder, Lovery Real Estate
I am a San Diego Realtor and the founder of Lovery Real Estate, with $56M+ in career sales across 90+ transactions. I work with buyers across Chula Vista, Bonita, North Park, University Heights, Normal Heights and La Jolla Mesa, and throughout San Diego County, including many military and VA buyers.
Before real estate I played professional baseball after being drafted out of UC Irvine. I grew up around Fisher Bros. House Moving, the fifth-generation California house-moving business my family ran from the 1850s, and worked in it myself before real estate.
Here are your options, here are the numbers, here is what I would do. No pressure. No performance.
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Ryan Fisher, Realtor. California DRE #02110091. Lovery Real Estate is a brand of Ryan Fisher, licensed under LPT Realty. 323 Minot Ave, Chula Vista, CA 91910. This article is general information and is not legal, tax, or lending advice. Loan programs, limits, rates and fees change; confirm current terms with a licensed mortgage professional. Consult appropriate professionals of your own choosing.