VA vs. FHA vs. Conventional Loans in 2025: Which Is Right for You in Southern California?

If you're planning to buy a home in Southern California in 2025, you've probably heard about FHA, Conventional, and VA loans. But which one is actually best for you. This week, we're breaking down the key differences between these three popular loan options — and how to decide which one fits your situation best.

Featured image for article: VA vs. FHA vs. Conventional Loans in 2025: Which Is Right for You in Southern California?

VA vs. FHA vs. Conventional Loans in 2025: Which Is Right for You in Southern California?

By Glenn Siaumau and Nicole Thompson-Stockmoe | S2 Mortgage
VA Loan Specialists Serving All of Southern California

If you're planning to buy a home in Southern California in 2025, you've probably heard about FHA, Conventional, and VA loans. But which one is actually best for you — especially in markets like Los Angeles, San Diego, Orange, Riverside, or San Bernardino?

This week, we're breaking down the key differences between these three popular loan options — and how to decide which one fits your situation best.

Down Payment Requirements

  • VA Loans: No down payment required. This is one of the biggest advantages for eligible veterans and military families.
  • FHA Loans: Minimum down payment of 3.5% required.
  • Conventional Loans: Typically requires 3% to 5% down for first-time buyers, and up to 20% to avoid mortgage insurance.

Mortgage Insurance

  • VA Loans: No monthly mortgage insurance, ever — a huge monthly savings.
  • FHA Loans: Requires both upfront and monthly mortgage insurance (called MIP). If you put less than 10% down, MIP is required for the life of the loan.
  • Conventional Loans: Private mortgage insurance (PMI) is required if you put down less than 20%, but it can be removed once you reach 20% equity.

Credit Score Guidelines

  • VA Loans: Flexible credit requirements; many lenders accept scores as low as 580.
  • FHA Loans: Minimum score of 580 with 3.5% down.
  • Conventional Loans: Generally requires a minimum score of 620, but better terms are available at 700 and above.

Loan Limits in Southern California

In 2025, the conforming loan limits vary by county. Most loan programs (VA, FHA, and Conventional) follow the same local limits. For example:

  • Los Angeles & Orange County: $1,149,825
  • San Diego: $1,006,250
  • Riverside & San Bernardino: $766,550

VA loans can exceed these amounts in some cases with full entitlement.

Funding Fees and Closing Costs

  • VA Loans: Includes a one-time VA Funding Fee (can be rolled into the loan or waived if you have a VA disability rating).
  • FHA Loans: Requires an upfront mortgage insurance premium and monthly MIP.
  • Conventional Loans: No upfront fee, but you may have to pay PMI depending on your down payment.

Who Each Loan Is Best For

  • VA Loans: Best for eligible military buyers — active-duty, veterans, and surviving spouses. Offers the most benefits with the least cash out-of-pocket.
  • FHA Loans: A solid choice for first-time buyers with lower credit or limited savings.
  • Conventional Loans: A good fit for buyers with strong credit and a decent down payment. Offers flexibility and lower long-term costs for those who qualify.

Real Example

We recently worked with a couple in Orange County who qualified for all three options.
After comparing the numbers side-by-side, the VA loan saved them over $20,000 in upfront costs and reduced their monthly payment by more than $400 compared to FHA.

They had excellent credit and were planning to use a down payment — but after seeing how the VA loan worked, they kept their cash in the bank and still got a lower payment.

The Bottom Line

If you're eligible for a VA loan, it’s almost always your best option — especially in high-cost Southern California.
If you’re not eligible, FHA and Conventional loans can still offer great pathways to homeownership, depending on your credit, income, and savings.

Need Help Comparing Your Loan Options?

We specialize in helping first-time buyers, military families, and move-up homeowners make smart, confident mortgage decisions. Let’s run the numbers side-by-side — and help you choose the right loan for your situation.

Call or text us today:

  • Glenn Siaumau: 562-999-6347
  • Nicole Thompson-Stockmoe: 619-540-0559

Email: glenn@s2mortgage.com | nicole@s2mortgage.com
Website: www.s2mortgage.com

As a U.S. Navy Veteran and a Marine Corps Surviving Spouse, we take pride in educating and empowering our community — whether you're buying your first home, your next one, or just exploring your options.

If you know someone who’s thinking about buying, selling, or refinancing — we’d be honored to help. Can we count on you to connect us?