"Should I use my VA loan or go conventional?"
I hear that question almost every week. And most of the answers out there stop at "it depends," which doesn't help anyone. So let's do the math instead.
Quick background on why I care about this one: over 25 years in the Air Force, I've used a VA loan, a 30-year conventional and a 15-year conventional myself. I've been on your side of the closing table with each of them.
Here's the setup. One Short Pump house, one buyer, two loan options. By the end, you'll know which one leaves more money in your pocket in the 23059 market.
The Setup: A $575,000 Home in Short Pump
$575,000 sits right in the middle of where most detached single-family homes in Short Pump are selling. Our buyer has a 720 credit score and steady income, qualifies for either loan, and would be using their VA benefit for the first time.
| VA loan 0% down | Conventional 5% down | Conventional 20% down | |
|---|---|---|---|
| Down payment | $0 | $28,750 | $115,000 |
| Funding fee | $12,363 rolled into loan | None | None |
| Monthly PMI | None | ~$159 | None |
| 30-year rate (est.) | ~6.14% | ~6.11% | ~6.11% |
| Typical cash to close | $5,000–$8,000 | $36,000–$40,000 | — |
Rate estimates as of fall 2026. PMI based on a 720 credit score with 5% down. Cash to close doesn't include prepaid escrow, which depends on your closing date.
Line by Line
Down Payment
VA: $0.
Conventional with 5% down: $28,750. Go the full 20% route and it's $115,000.
That's real money. For most military families I work with, it does more good as an emergency fund, an investment, or a cushion for the next PCS than it does sitting in a house.
The VA Funding Fee
This is the part that makes people nervous, so let's look at it head on.
First-time VA users with zero down pay a one-time funding fee of 2.15%. On $575,000, that's $12,363. You don't bring it to closing. It gets added to your loan, which bumps your balance and your monthly payment up a little.
The 2026 funding fee schedule:
| Down Payment | First Use | Subsequent Use |
|---|---|---|
| 0% | 2.15% | 3.30% |
| 5–9.99% | 1.50% | 1.50% |
| 10%+ | 1.25% | 1.25% |
Good news for a lot of veterans: if you have a service-connected disability rating of 10% or higher, you pay no funding fee at all. Surviving spouses receiving DIC benefits don't pay it either. In that case your loan stays at $575,000 and your payment drops with it.
PMI: The Quiet Monthly Cost
This is where VA pulls ahead every single month.
With 5% down and a 720 credit score, a conventional buyer pays about $159 a month in PMI until they reach 20% equity. On this house, that takes around nine years of normal payments. That's roughly $17,000 in PMI, on top of the down payment.
VA loans don't have PMI. Not at zero down, not at 5% down, not ever.
Interest Rates
Right now it's close to a tie. VA 30-year rates are running around 6.14%, with conventional near 6.11%. Over time VA has usually come in 0.25% to 0.50% lower, but the gap moves day to day with lender pricing and your own profile.
So don't pick VA for the rate. Pick it for no PMI and no down payment.
Closing Costs
The VA program has a few protections here that most buyers never hear about.
- Lender origination fees are capped at 1% of the loan. Conventional has no cap, and I've seen 1.5% to 2% or more slip in.
- VA lenders can't charge you document prep, tax service, application or rate lock fees. That alone can be $500 to $1,500.
- Sellers can pay all of your standard closing costs, plus up to 4% of the price in additional concessions. In Short Pump, where sellers often have some room to negotiate, that's a lever worth pulling.
Put it together and most VA buyers bring $5,000 to $8,000 to closing. Most 5%-down conventional buyers bring $36,000 to $40,000.
Does the Funding Fee Wipe Out the Savings?
That's the question everybody's really asking. Here's how it shakes out.
VA vs. Conventional with 5% Down
At closing, the VA buyer adds a $12,363 funding fee to the loan but skips a $28,750 down payment. That's about $16,387 more cash in their pocket on day one.
Over the next nine years, the conventional buyer pays about $17,172 in PMI. The VA buyer's slightly bigger loan costs about $76 a month more in principal and interest, or $8,208 over the same nine years.
Net result: the VA buyer comes out about $8,964 ahead over nine years, and never had to drain their savings to buy the house.
VA vs. Conventional with 20% Down
This one's closer. If you really do have $115,000 ready to put down, conventional probably wins. Smaller balance, smaller payment, no funding fee.
But ask yourself one question first: is that $115,000 working harder as a down payment, or somewhere else? If there's a decent chance you'll move again in five to seven years, keeping that cash liquid usually wins for military families.
When I'd Tell You Not to Use VA
The VA loan isn't automatically the right call. A few situations where I'd slow down:
- You're on your second use (3.30% funding fee) and you only plan to stay three or four years. The math gets tight.
- You're in a bidding war where the VA appraisal is a sticking point. A good agent can usually structure around this, but it's worth talking through.
- You have a service-connected disability and a big down payment. A conventional loan with 20% down and no PMI might land a lower payment, depending on rates that week.
That's why I run both options for every client before recommending one.
My Take
If you're a veteran buying in Short Pump's 23059 market and you're putting less than 20% down, the VA loan wins, and it's not close. No down payment, no PMI, capped fees and room for seller concessions add up over a 7 to 10 year stretch.
The funding fee is real. It's also the cost of getting into a program that saves most buyers far more than it costs them.
New to using your benefit here? Start with my VA loan guide for buying in Short Pump. It covers eligibility, the VA appraisal and the neighborhoods worth a look.
Want to see these numbers with your credit score, your down payment and your timeline? Call or text me. It takes about 20 minutes, and you'll walk into the lender's office knowing exactly which path makes sense.