Four Real Differences, and One of Them Is Written in the Ohio Revised Code
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
We are a lender that writes both, so this is a comparison and not a sales pitch. The honest answer is that the fourth difference is the one people underweight.
★ Side by side
| Feature | VA | Conventional |
|---|---|---|
| Minimum down payment | ★★ None with full entitlement | Typically required |
| Monthly mortgage insurance | ★ None | Usually until equity is reached |
| Upfront fee | 2.15% to 3.3%, or 0 if exempt | No comparable VA-style fee |
| Loan limit | ★★ "No loan limit" with full entitlement | Conforming limits apply |
| Residual income test | ★ Yes | ★ No equivalent |
| Who must be eligible | Service history and entitlement | Anyone who qualifies |
| Occupancy | Principal dwelling rules apply | Investment property permitted |
★★ The deposit, and the sentence that qualifies it
The VA: with full entitlement you have "no loan limit (as long as you can afford the loan amount and the property appraisal supports the purchase price of the home)", and "your lender will still need to approve you for a loan."
★★ Both halves are load-bearing. The guaranty is uncapped; the underwriting is not. Which entitlement you have.
★ The fee is where the comparison is closest
A conventional borrower with a real deposit and no mortgage insurance is not obviously worse off than a VA borrower paying 3.3% on subsequent use. Where the comparison stops being close:
- ★★ If you are fee-exempt, a compensable service-connected rating, retirement pay in lieu, DIC, a memorandum rating before closing, or active duty with a Purple Heart, the fee is not charged, and a zero-fee no-deposit loan with no mortgage insurance has no conventional analogue. The five exemptions
- ★ If the deposit is the constraint, which in Ohio it usually is rather than the price.
★ The test that only one side has
VA underwriting asks what is left in the household each month after the payment, taxes, insurance, utilities, maintenance, debts and withholding, against a threshold by household size and region. Conventional underwriting looks at ratios instead.
★ So the two can disagree in both directions. We have seen VA files clear where ratios looked tight, and the reverse. How the test works and where the VA publishes it.
★★ And the Ohio difference, which is not a loan feature at all
ORC 323.152 reduces the taxable value of a qualifying disabled veteran's homestead by $50,000 of true value as adjusted, against $25,000 for the standard exemption, with no wartime-service condition and no income test on that branch.
★★ No loan product gives you that, and no lender grants it. It comes from the Ohio Revised Code and your county auditor. But it lowers your escrowed property tax, which lowers your payment, which feeds the residual-income test above. Every condition.
★★ That is the layer people underweight when they compare loan types: in Ohio the biggest difference for a totally-disabled veteran is not in the loan at all.
★ Where conventional genuinely wins
- Investment property. VA occupancy rules require a principal dwelling.
- A second simultaneous purchase can run into remaining-entitlement arithmetic a conventional loan does not have. The 25% guaranty rule
- A large deposit already in hand narrows the VA advantage considerably.
We write both. Bring the actual numbers and we will tell you which is cheaper for you. We publish no rates and no payment figures anywhere on this site.
Mike Certo, NMLS #260555. (480) 296-6513 · mcerto@cfmtg.com.
Frequently asked questions
Is a VA loan better than conventional in Ohio?
It depends on the deposit and on whether you are funding-fee exempt. A fee-exempt veteran gets a no-deposit loan with no mortgage insurance and no upfront fee, which has no conventional equivalent. A borrower with a large deposit already in hand, or one buying investment property, may do better conventionally.Do VA loans have mortgage insurance?
No. VA loans carry no monthly mortgage insurance. They carry a one-time funding fee instead, from 2.15 percent on first use to 3.3 percent on subsequent use with less than 5 percent down, and nothing at all for an exempt borrower.What underwriting test do VA loans have that conventional loans do not?
Residual income: the dollar amount left in the household each month after the payment, taxes, insurance, utilities, maintenance, other debts and tax withholding, measured against a threshold by household size and region. Conventional underwriting uses ratios and has no equivalent test.Does the loan type affect Ohio's disabled veteran homestead exemption?
No. The $50,000 reduction in Ohio Revised Code 323.152 comes from state law and your county auditor, not from any loan product or lender. It does lower your escrowed property tax and therefore your monthly payment, which helps the VA residual-income test.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 Ohio homestead exemption for disabled veterans is governed by Ohio Revised Code sections 323.151 and 323.152 and is administered by county auditors, not by Cornerstone; the statutory amounts are adjusted annually by the Ohio Tax Commissioner and the tax effect depends on local assessment and effective tax rates. Figures here carry the date we verified them against primary sources. All loans are subject to borrower, property and program qualification.