If you’ve served in the military and you’re getting ready to buy a home in Arizona, you’ve probably heard that you have access to a VA loan. But you may also be wondering, is it actually better than a conventional loan? Should I use my VA benefit or just go conventional like everyone else? It’s a great question, and the honest answer is: it depends on your situation. But for most veterans and active duty service members in Arizona, the VA loan wins, and often by a significant margin. Let me show you exactly why, and walk you through the scenarios where conventional might make more sense.

VA Loans are mortgage loans backed by the U.S. Department of Veterans Affairs. They’re available to eligible veterans, active duty service members, National Guard and Reserve members, and surviving spouses. The VA doesn’t lend the money directly, lenders like Barrett Financial, LLC originate the loan, and the VA guarantees a portion of it. That guarantee is what gives lenders the confidence to offer exceptional terms. Conventional Loans are not backed by any government agency. They’re the most common mortgage type in the country and are offered by banks, credit unions, and mortgage brokers. Because there’s no government guarantee, lenders require stronger credit and larger down payments to offset their risk.

Let’s look at the key differences across the categories that matter most to buyers.

VA Loan: Zero. No down payment required for eligible borrowers, and this is arguably the single most significant financial advantage the VA loan offers. On a $400,000 home in the Phoenix Metro, that’s $80,000 you don’t have to come up with if you were aiming for 20% down conventionally.

Conventional Loan: Minimum 3% to 5% for most programs. To avoid private mortgage insurance (PMI), you need 20% down. For that same $400,000 home, that’s anywhere from $12,000 to $80,000.

VA Loan: The VA itself does not set a minimum credit score. Most lenders, including us at Home Sweet Loans, look for a 620 or above. Some lenders go as low as 580 depending on the full picture of your application.

Curious how low your score can actually be and still get approved? I break down the real approval ranges in this post →” https://sweetloans.net/how-low-can-your-credit-score-be-and-still-use-a-va-loan/

Conventional Loan: Minimum 620, but you won’t see competitive rates until you’re at 700 or above. The best conventional rates generally require 740+.

VA Loan: None. Zero. No private mortgage insurance, ever, regardless of how much you put down. This is a massive ongoing savings that most buyers don’t fully appreciate until they see the math.

VA Loan: VA loans consistently offer lower interest rates than conventional loans, often 0.25% to 0.5% lower, sometimes more. Because the VA guarantees a portion of the loan, lenders take on less risk and pass those savings to borrowers in the form of lower rates.

Conventional Loan: Rates vary significantly based on credit score, down payment, and market conditions. At 740+ with 20% down, conventional rates are competitive, but they still typically run higher than VA rates for the same borrower profile.

Here’s where conventional gets a point back. VA loans come with a funding fee, a one-time charge paid to the VA that helps keep the program running. According to the U.S. Department of Veterans Affairs funding fee schedule, first-time VA loan users putting no money down, the funding fee is currently 2.15% of the loan amount. On a $400,000 loan, that’s $8,600. It can be rolled into the loan rather than paid at closing. For subsequent VA loan use, the fee increases to 3.3%.

Important exception: Veterans with a service-connected disability rating of 10% or more are exempt from the funding fee entirely. If this applies to you, the VA loan becomes even more of a no-brainer.

Conventional loans have no equivalent funding fee, just standard closing costs.

VA Loan: For veterans with full VA entitlement (meaning you haven’t used your VA loan benefit before, or you’ve fully paid off a previous VA loan), there is no loan limit. You can borrow as much as the lender will approve based on your income and credit. Veterans with full VA entitlement face no conforming loan limit in 2026 — meaning the VA will back any amount the lender approves, with zero down.

Conventional Loan: Conforming loan limits for 2026, the baseline limit rose to $832,750 for a single-family home. Above that, you’re in jumbo territory with stricter requirements.

VA Loan: The property must meet VA Minimum Property Requirements (MPRs) — the home needs to be safe, sound, and sanitary. Most standard homes in good condition pass without issue. Fixer-uppers or heavily distressed properties may not qualify.

Conventional Loan: Property requirements are generally more flexible. Conventional financing can be used on a wider range of property conditions.

This is one area where VA loans have historically faced some headwinds, though the reality has improved significantly. Some sellers and their agents have historically preferred conventional offers over VA offers, believing VA loans take longer or are more likely to fall through due to the VA appraisal process. In Arizona’s competitive market, this can occasionally be a factor in multiple-offer situations. That said, an experienced VA lender can move as fast as any conventional lender. At Home Sweet Loans, powered by Barrett Financial, we close VA loans efficiently and work proactively with listing agents to set the right expectations. The perception gap has narrowed considerably, and a strong pre-approval letter from a credible lender goes a long way.

In most scenarios, VA wins. But here are the situations where conventional financing genuinely makes more sense for a veteran: You have 20% down and a 740+ credit score. At that point, you’d pay no PMI on conventional, get an excellent rate, and avoid the VA funding fee (assuming the veteran is not exempt from the funding fee). The math gets closer though VA often still edges it out on rate.

The property doesn’t meet VA MPRs. If you’re buying a fixer-upper or a home in rough condition, conventional (or a renovation loan) may be your only viable path.

You’ve used your VA entitlement and it’s tied up. If you have an existing VA loan that hasn’t been paid off, your remaining entitlement may limit what you can borrow VA. In some cases, conventional makes more sense while your entitlement is encumbered. You’re buying an investment property. VA loans are for primary residences only. If you’re purchasing a rental or investment property, conventional is your route.

If you’re an eligible veteran or active duty service member buying a primary residence in Arizona, the VA loan is almost always the better financial choice. Lower rates, no down payment, no mortgage insurance, those three things alone represent tens of thousands of dollars in savings over the life of a typical loan. The funding fee stings a little upfront, but it’s almost always offset by everything else the VA loan gives you. And if you have a service-connected disability, you don’t pay it at all.

Here’s what I tell every veteran who comes to me: Use your benefit. You earned it. The VA loan exists because of your service. There’s no reason to leave it on the table.

That said — every financial situation is unique. The best way to know which loan is right for you is to run the actual numbers side by side with a broker who does this every day.

I’d love to do that for you and let you see the real numbers…when you are ready.

Schedule a free consultation with Christian Wohl at Home Sweet Loans →
📞 (480) 275-9459

Home Sweet Loans | Christian Wohl, Certified Mortgage Advisor | NMLS #2043242
Barrett Financial Group LLC | NMLS #181106 | sweetloans.net
Equal Housing Lender. This is not a commitment to lend. All loans subject to credit approval. VA loans available to eligible veterans, active duty service members, and survivi