Default answer for most service members: the VA loan wins. But "most" isn't "all," and knowing the narrow cases where conventional is better protects you from one-size-fits-all advice — in both directions.
Where the VA loan dominates
- Little or no cash to put down. 0% down with no PMI is unmatched. A conventional loan below 20% down carries PMI — often $100–300/month that buys you nothing.
- Any VA disability rating. Rated veterans pay no funding fee, removing the VA loan's only real cost. At that point it's nearly strictly better.
- Rate. VA rates typically run at or below comparable conventional rates because of the government guaranty.
- No-equity protection. VA loans are assumable — a buyer can take over your low-rate loan, which became a genuine selling advantage in high-rate years.
Where conventional can win
- You have 20%+ down and no disability rating. With no PMI on either side, the 1.25–2.15% funding fee becomes pure cost — run both quotes.
- Subsequent use on a short tour. The 3.30% fee on a second zero-down VA purchase is real money against 2–3 years of equity. Sometimes 5% down conventional (or 5% down VA at 1.50%) pencils better.
- Investment or second properties. The VA loan requires owner occupancy — conventional is the tool for pure rentals.
- Condos not on the VA-approved list — sometimes faster to go conventional than to get a project approved (an experienced local agent will know which buildings are already approved).
The myth that costs people money
"Sellers won't take VA offers." The data doesn't support it anymore — VA loans close at rates comparable to conventional, and the appraisal-delay reputation is largely obsolete. What actually loses deals: listing agents who haven't handled a VA offer recently, and buyers' agents who can't counter the misconceptions. In base markets, agents write VA offers every week and this problem mostly disappears — one more reason the right agent matters more than the loan type.
Bottom line
Get quoted both ways and compare the all-in numbers — total monthly payment and total cash to close. If you're at 0–5% down (most PCSing families) or hold any disability rating, expect VA to win. If you're at 20% down with no rating, make the lender earn it with both quotes side by side.