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in Colusa, CA
Both FHA and VA loans make homeownership easier in Colusa, but they work for different buyers. FHA loans open doors for anyone with modest savings and average credit, while VA loans reward military service with unbeatable terms.
Most Colusa buyers qualify for FHA if they have steady income and 3.5% down. VA eligibility requires military service but eliminates the down payment entirely and skips mortgage insurance costs that FHA requires.
FHA loans let you buy with just 3.5% down and a 580 credit score. The Federal Housing Administration insures these mortgages, which means lenders take less risk and approve more borrowers.
You pay an upfront mortgage insurance premium of 1.75% at closing, plus monthly premiums for the loan's life if you put down less than 10%. Debt-to-income ratios can stretch to 50% with strong credit, which helps buyers with student loans or car payments.
VA loans require zero down payment and charge no monthly mortgage insurance. Veterans, active-duty service members, National Guard, and surviving spouses can use this benefit repeatedly throughout their lives.
You pay a one-time funding fee of 2.15% to 3.3% depending on down payment and prior use, but this fee can be rolled into the loan. Lenders typically want 620+ credit, though some approve lower scores with compensating factors like cash reserves.
The down payment gap is stark: FHA needs 3.5% saved while VA needs nothing. On a $350,000 Colusa home, that's $12,250 versus zero upfront, which matters when you're relocating or buying your first home.
Monthly costs diverge even more. FHA charges ongoing mortgage insurance that adds $200-300 monthly on typical loans, while VA loans skip this entirely. Over 30 years, that saves VA borrowers $72,000-108,000 in premiums.
Choose VA if you qualify through military service, period. The zero down payment and eliminated mortgage insurance make it the strongest loan program available, saving you tens of thousands versus FHA.
Choose FHA if you're not eligible for VA and need lower credit or down payment requirements than conventional loans demand. It costs more monthly than VA but still beats conventional financing for buyers with under 10% down or credit below 680.
Yes, VA loans work anywhere in California including rural Colusa County. The property must be your primary residence and meet VA minimum property requirements.
FHA requires 580 minimum for 3.5% down, 500 for 10% down. VA lenders typically want 620+ but some approve lower scores with strong income and reserves.
Only if you put down 10% or more, then it drops after 11 years. With 3.5% down, you pay mortgage insurance for the full 30-year loan term.
Yes, but it rarely makes sense. VA offers better terms with zero down and no mortgage insurance, saving thousands annually compared to FHA.
VA typically beats FHA by 0.25%-0.5% because lenders have less risk. Rates vary by borrower profile and market conditions, so compare quotes from multiple lenders.