Chris, consult with a mortgage professional. I am a Veteran and have a VA loan myself - they are one of your best options if you do not have a sizeable down payment.

Conventional loans do not require a 20% down payment - with a 20% down payment you avoid paying monthly mortgage insurance. VA loans offer good rates, have no credit score requirements, have NO monthly mortgage insurance and the upfront funding fee (which is rolled into the loan) can be waived if you have at least a 10% VA disability.

VA loans make for certain allowances that other loan programs do not. I have gotten clients approved with a VA loan who could not get approved through other loan programs.

Seek out a local mortgage professional who offers VA loans. Check out the PA Mortgage Brokers Association.

Chris,
With the VA loan you can purchase a home with no down payment. The conventional loan you need 20% down. With the VA loan you could have a higher debt/ratio than a conventional loan. You will also to make sure you request your VA Certificate for the loan. Go to this site for additional info on VA Loans. http://www.military.com/Finance/HomeBuying/1,13397,66,00.html This site has mortgage caculators that might help you decide on which loan to get.

The VA loan will give you an opportunity to buy a house with little or no money down. They will allow the buyer to borrow more money than the conventional loan. For example, if a house is listed at $100,000 and you would like to buy it for $95,000, the VA will allow you to get a loan for $100,000 (provided you QUALIFY for that much) and apply $5,000 to your closing costs. The interest rates run very close to conventional rates.
One noticable difference is the appraisal process. The VA Appraisal will, sometimes, highlight things like missing handrails and peeling paint and make the loan conditional on these repairs.
A GOOD mortgage broker can walk you through all of your options and tell you what the best option is based on your credit and how much money you have for a downpayment.

Chris

For the buyer, the credit guidelines are a little more flexible, and the borrower may qualify for 100% financing (depending on debt ratio and cost of the property)

For the seller, there are a few non allowable buyer fees that the seller must pay.


Best of luck