VA Loan vs. FHA for Modular Homes: The 2026 Comparison

Both government-backed. Both work on modular. One's free of down payment.

VA loans (Department of Veterans Affairs) and FHA loans (Federal Housing Administration) both finance modular homes. For qualifying veterans, VA almost always wins.

Why this makes sense right now

VA loan originations: 465K in 2024 per VA. FHA: 780K per HUD. Both remain the primary paths for first-time or low-down buyers into modular homes.

The layout — head-to-head

Backing

• VA: US Dept of Veterans Affairs
• FHA: Federal Housing Administration

Eligibility

• VA: qualifying military service
• FHA: any borrower meeting credit + income

Down payment

• VA: 0%
• FHA: 3.5% (580 FICO); 10% (500 FICO)

Mortgage insurance

• VA: none (funding fee once)
• FHA: MIP monthly for life of loan (or 11 years at 10% down)

Funding fee (VA) or upfront MIP (FHA)

• VA: 2.15% first-time (0.5% for disabled)
• FHA: 1.75% upfront

Rate 2026

• VA: 6.25%-7.25%
• FHA: 6.75%-7.75%

Credit floor

• VA: 580-620 lender-dependent
• FHA: 500-580 depending on down

Modular home eligibility

• Both: yes (IRC-code required)
• Both: permanent foundation required

Loan limits

• VA: no limit (with entitlement)
• FHA: county limits ($524K-$1.2M)

Financing math

$300K modular home, 700 FICO, veteran:

VA at 6.5% with 0% down:

• Base P+I: $1,895/month
• No PMI, no MIP
• Total: $1,895/month

FHA at 7% with 3.5% down ($10,500):

• Base P+I ($289,500): $1,928/month
• MIP: $205/month
• Total: $2,133/month

VA saves $238/month + zero down payment. Over 30 years the VA saves $85K in interest and MIP.

Choose VA if...

• You qualify (veteran, active duty, spouse of KIA)
• Zero down matters
• Long-term MIP-free structure preferred

Choose FHA if...

• You don't qualify for VA
• Credit is 500-620 (lower floor than VA)
• Small down payment matters

The quiet part.

VA is a genuinely free-ish loan for qualifying veterans — no down, no PMI, no repeat funding fees on subsequent uses. Most veterans still take FHA because "everyone knows FHA." That's a real cost of not understanding what you already qualify for.

If you're a veteran, active-duty, National Guard/Reserves (with 6+ years), or surviving spouse — check VA eligibility before any other loan. It's almost always the best structure available in US mortgage lending.

Related guides

• FHA 203(k) vs. HomeStyle Renovation Comparison (2026)
• USDA vs. FHA Modular Comparison (2026)
• Conventional Mortgage: Modular vs. Site-Built (2026)

The waitlist is open

The Financing Finder sorts VA eligibility, FHA qualification, and conventional options. Eight questions.

For eligible veterans, VA almost always wins. Check eligibility before anything else.