A veteran buying in a rural census tract may have three primary-residence conversations — VA, USDA, and FHA — but this page does not pick one. Run the USDA map, remaining VA entitlement, and HUD occupancy as separate tests. Snapshot as of 2026-08.
This is a comparison of typical tests, not a recommendation that a veteran should take USDA, VA, or FHA. Eligibility, occupancy, and overlays decide the file.
VA eligibility is a service benefit. USDA eligibility is map plus household income. FHA is credit and MIP policy. None of these pages steer by national origin or other protected class.
Start with the tests, not a slogan
- VA. If remaining entitlement, occupancy, and residual income fit, VA is often the first conversation because monthly PMI is not charged and zero down can apply. That is not automatic for every veteran and not a promise it beats USDA or FHA on APR. Funding fee (first use, less than 5% down snapshot): 2.15%. The funding fee is typically waived for veterans with a qualifying service-connected disability rating and for some surviving spouses. Entitlement and occupancy rules also apply. VA loans. Finance vs pay the funding fee.
- USDA. USDA still needs an eligible address, household income under the current area limit, and primary occupancy. A rural tract is not a city-name slogan. Run the published map. Upfront guarantee fee snapshot: 1.00% of the loan amount (often financed); annual 0.35% of remaining principal (annualized; confirm current RD fee notice). USDA publishes an upfront guarantee fee and an annual fee. The percents in this module are a dated snapshot, not a quote. Confirm the current RD fee notice before anyone prices a file. USDA loans. Map and income how-to.
- FHA. FHA has no USDA map test and no VA COE. It has MIP and HUD occupancy. A veteran without remaining entitlement, or a property that fails USDA’s map or income test, sometimes lands here. That is a file fact, not a preference. Down payment at 580+: 3.5%. 1.75% of the base loan amount (often financed) Primary residence (with limited exceptions) FHA loans. FHA vs conventional.
Typical overlays — not a recommendation
Use this as a map of occupancy, down payment, and fee snapshots. A loan officer still applies the guide in force. Fee percents are dated; confirm before anyone prices a file.
| Question | FHA | VA | USDA |
|---|---|---|---|
| Credit (typical overlay, not a promise) | HUD allows 580+ for 3.5% down and 500–579 with 10% down. Many lenders set higher overlays. A 500 score is not a promise that a file will be originated. | VA does not publish a single FICO floor. Lender overlays still apply. | Automated GUS findings and lender overlays often sit near the mid-600s. That is not a published floor that guarantees an approval. |
| Down payment / equity | 3.5% down at 580+ under HUD policy; overlays often sit higher. 10% at 500–579. | Zero down is available only with remaining entitlement and when the loan otherwise meets VA and lender guidelines. It is not automatic for every veteran. | Zero down when the property map, household income, and occupancy tests are met. |
| Occupancy | Primary residence (with limited exceptions) | Primary residence. Remaining-entitlement cases still have an occupancy test. | Primary residence. Investment property is not eligible. |
| Property type | 1–4 units as a primary. Condos need FHA project approval. HUD minimum property standards apply. | VA MPRs and an occupancy appraisal. Condos need VA project approval. | Address must be on the USDA map. Existing homes and some new construction; not an investment rental. |
| MIP / PMI / funding fee / guarantee fee | Upfront MIP 1.75% of the base loan amount (often financed). Annual MIP is a range that depends on term, loan amount, and LTV. It is not a single published percent for every file. Life-of-loan MIP is common below 10% down. | Funding fee may apply or be waived. First-use, less than 5% down snapshot: 2.15%. The funding fee is typically waived for veterans with a qualifying service-connected disability rating and for some surviving spouses. Entitlement and occupancy rules also apply. No monthly PMI. | 1.00% of the loan amount (often financed); annual 0.35% of remaining principal (annualized; confirm current RD fee notice). USDA publishes an upfront guarantee fee and an annual fee. The percents in this module are a dated snapshot, not a quote. Confirm the current RD fee notice before anyone prices a file. |
| Loan limits | HUD FHA county limit. Different table from FHFA. Look up the property county. | County limits matter when entitlement is partial. Full entitlement files follow current VA/FHFA interaction — confirm, do not memorize a number. | Area loan limits exist. The map and income tests usually bind first. |
Program rules, fees, and county loan limits change. Confirm the current published schedule and lender overlays. Nothing here is a quote, a lock, or a credit decision.
Scenarios (file facts, not advice)
- COE and remaining entitlement fit, property is primary. VA is often the first conversation. USDA’s household income cap and map can still fail even if VA would work.
- Entitlement is tied up, USDA map and income pass. USDA may be in the conversation. It is still primary occupancy — not an investment. Primary residence. Investment property is not eligible.
- Map fails or household income is over the USDA limit, and VA does not fit. FHA may be the remaining low-down primary path. MIP is not a VA funding fee and not a USDA guarantee fee.
Zero down is available only with remaining entitlement and when the loan otherwise meets VA and lender guidelines. It is not automatic for every veteran.
Household income, not just the borrowers on the note, is tested against the current area limit and household size. Look it up on USDA’s published income tool. Do not use a marketing-page AMI figure.
What happens next
- Run the address on USDA’s published map — use the official eligibility tool, not a city name.
- Ask a lender to pull or update the COE. Entitlement restoration after a sale is a different page: VA entitlement restoration.
- Compare two Loan Estimates if two programs both fit. This page is not a quote or a lock.
Common questions
Keep going
What to do next
Education first. A conversation with a loan officer is how you find out what may actually fit your file.
Loan information is provided by Ondo Real Estate (NMLS ID on file). This is not a commitment to lend, a loan approval, or an offer of credit. Rates, terms, and payments shown are estimates for illustration only, are not a quote, and are subject to credit approval, underwriting, and market conditions. You are not required to use Ondo for financing to buy or sell with Ondo. Equal Housing Lender. Program rules, fees, and county loan limits change. Confirm the current published schedule and lender overlays. Nothing here is a quote, a lock, or a credit decision. Licensing and disclosures