and by the way, he doesn't get paid more to take her to a specific product. One might be easier for him though.

Since she has no monthly MI on VA and her rate will be significantly lower, go VA. Lets say he is right about being able to drop the MI in 18 months. She will still pay at least $1000 in monthly MI premiums that she wouldn't with the VA. Plus she will pay far more over the life of the loan for the higher interest rate of the conventional loan. Dropping MI is harder than people think. You actually have to be at 75% ltv or less to remove it via a new appraisal. I think the choice is pretty easy as long as he is giving her a better rate with VA, which he should.

I would also probably tell her to only put 10% down on a VA. Her funding fee will still be 1.25% and she could invest that other 5% somewhere else. She doesn't have to do that but it is an option.

Go VA, and if that guy gives her any pressure the other way let me know I am licensed in AZ. I would be happy to check the rates/fees he is giving her to make sure she is getting a good deal.