VA or Conventional? Two Cases Where We Will Tell You to Take the Conventional Loan
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
The VA loan is usually the better product for a veteran in Pennsylvania. Usually is not always, and we would rather lose the loan than put you in the wrong one.
Side by side
| VA | Conventional | |
|---|---|---|
| Minimum down payment | 0% with full entitlement | typically 3%–5% minimum |
| ★ Monthly mortgage insurance | ★ none | required below 20% equity |
| One-off fee | funding fee, or zero if exempt | none, but PMI instead |
| Loan ceiling | ★★ no limit on full entitlement | $832,750 in 66 PA counties |
| Second income test | ★ residual income | agency ratios |
| Who can use it | eligible veterans and some spouses | anyone who qualifies |
No rate column. We publish no rates, and a comparison that invented two would mislead more than it helped.
★★ Why VA usually wins in Pennsylvania
Two reasons, and the second is the underrated one.
No monthly mortgage insurance. A conventional borrower below 20% equity pays PMI every month until they are not. A VA borrower never does, at any deposit. Over a long hold that is the largest structural difference between the two.
★★ And for exempt veterans the funding fee is zero. The usual argument against VA is that the funding fee offsets the PMI saving. For a veteran receiving VA compensation for a service-connected disability, there is no fee to offset, so the comparison is not close. In Pennsylvania, where 30.60% of veterans report a disability against 15.90% of non-veterans, that is a large share of the market. The five exemptions.
★★ The two cases where conventional is the better answer
One: you are putting down 20% or more. At that deposit a conventional borrower pays no PMI either, so the VA's structural advantage disappears and you are comparing a funding fee against nothing. If you are not fee-exempt, conventional often wins outright.
★★ Two: you expect to sell within two or three years. This is the Pennsylvania-specific one. With 0% down you start with no equity, and Pittsburgh rose 0.2% over the year to August 2026. In a flat market, a short hold on a zero-equity position means selling costs come out of your pocket.
★ We will say that plainly rather than sell you the zero-down. If the plan is two years, run the rent comparison honestly first. The market data.
★ And one case where VA wins and nobody expects it to
Above the conforming limit. A conventional loan over $832,750 in most Pennsylvania counties becomes a jumbo, underwritten to the lender's own standards. A VA loan with full entitlement has, in the VA's words, "no loan limit".
★ At Pennsylvania prices that is a narrow band, Philadelphia's typical value is 47% of the baseline, but for a high-earning veteran buying well above typical, it is a real advantage over conventional. How the limit works.
★ What applies either way
- Transfer tax. 1% Commonwealth, 4.578% in Philadelphia, regardless of loan type.
- ★ The Pennsylvania property-tax exemption. It attaches to the veteran and the property, not the loan. A qualifying veteran gets it on a conventional loan too. The criteria
★★ That second point is worth stating clearly, because it is easy to assume the exemption is a VA-loan benefit. It is not. It is a Commonwealth tax exemption and the mortgage is irrelevant to it.
Send us the file and we will tell you which product fits. Mike Certo, NMLS #260555. (480) 296-6513.
Frequently asked questions
Is a VA loan better than a conventional loan in Pennsylvania?
Usually, because a VA loan requires no down payment with full entitlement and never charges monthly mortgage insurance, while a conventional borrower below 20 percent equity pays PMI. For a veteran exempt from the VA funding fee the comparison is not close. Conventional can win if you are putting 20 percent or more down, or if you expect to sell within two or three years.When should a Pennsylvania veteran choose a conventional loan?
In two cases. If you are putting down 20 percent or more, a conventional borrower pays no PMI either and you would be comparing a funding fee against nothing. And if you expect to sell within two or three years, starting with no equity in a flat market such as Pittsburgh, which rose 0.2 percent over the year to August 2026, means selling costs come out of pocket.Does a VA loan have mortgage insurance?
No. A VA loan never charges monthly mortgage insurance at any deposit level. It charges a one-off funding fee instead, which is waived entirely for five categories of veteran including those receiving VA compensation for a service-connected disability.Do I need a VA loan to get the Pennsylvania property tax exemption?
No. The Disabled Veterans' Real Estate Tax Exemption attaches to the veteran and the property, not to the mortgage, so a qualifying veteran receives it on a conventional loan as well.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about VA home loan financing, not a loan commitment and not legal, tax or financial advice. Cornerstone First Mortgage is a private lender and is not affiliated with, endorsed by or acting on behalf of the U.S. Department of Veterans Affairs or any government agency. VA entitlement, funding-fee exemption and disability ratings are determined by the U.S. Department of Veterans Affairs. The Pennsylvania Disabled Veterans' Real Estate Tax Exemption is administered by the Pennsylvania State Veterans' Commission through each county Director of Veterans Affairs, not by Cornerstone; its criteria and income thresholds are set by the Commonwealth and change. Figures here carry the date we verified them against primary sources. All loans are subject to borrower, property and program qualification.