For eligible borrowers, the VA loan is the very best loan to have. From the seller’s point of view, it is the worst kind of loan.

The VA prohibits the borrower from paying several kinds of fees that are commonly charged to buyers. The seller must pay these, or convince people not to charge them, an undesirable complication.

The VA requires an inspection by a VA-specified inspector. The seller may be required to remedy certain conditions which would not become issues with other types of loans. As much trouble as it is, the VA inspection is not sufficiently detailed to be the only inspection. You should still engage an inspector working for you to give the house an exhaustive examination.

In a competitive situation, the VA loan will be the first one eliminated from consideration (unless you happen to be dealing with a seller who is also a veteran and feels affluent enough to give a fellow veteran a break).

Calculate whether you can tolerate an FHA loan with the 3.5% down payment, taking into account the federal tax credit, if eligible. If it doesn’t work today, listen for the announcement of a larger tax credit, with relaxed eligibility requirements.