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in Mendota, CA
FHA and VA loans both help Mendota buyers with limited cash get approved. The difference comes down to who qualifies and what you'll pay over time.
Most Mendota borrowers choose FHA for the low barrier to entry. Veterans skip it entirely because VA loans cost less and require zero down.
FHA loans let you put down as little as 3.5% with credit scores as low as 580. You'll pay mortgage insurance for the life of the loan unless you refinance out later.
This program works well for first-time buyers in Mendota who need flexible approval standards. Debt ratios stretch higher than conventional, and sellers can contribute up to 6% toward closing costs.
The catch is ongoing mortgage insurance premiums that add roughly 0.85% to your rate annually. On a $300,000 loan, that's an extra $212 per month you can't eliminate without refinancing.
VA loans require zero down payment and charge no monthly mortgage insurance. You pay a one-time funding fee between 1.4% and 3.6% depending on your service type and whether it's your first VA loan.
Rates typically run 0.25% to 0.50% lower than FHA because the VA guarantee reduces lender risk. For Mendota veterans, this means lower monthly payments and faster equity building.
The program also caps what lenders can charge in fees and doesn't penalize lower credit scores as harshly. You can finance the funding fee into your loan amount instead of paying it upfront.
The monthly payment gap between these programs is substantial. On a $300,000 purchase, FHA costs roughly $250 more per month than VA due to mortgage insurance alone.
VA loans require verified military service through a Certificate of Eligibility. FHA is open to anyone who meets credit and income requirements, making it the default for non-veterans.
Property condition matters more with VA. The appraiser flags health and safety issues that must be fixed before closing, while FHA is slightly more lenient on cosmetic problems.
If you're eligible for VA benefits, use them. The cost savings over 30 years easily exceed $100,000 compared to FHA on the same home price.
Non-veterans without 20% down should consider FHA for Mendota properties. It's the most accessible government program for buyers with limited savings or past credit issues.
Some borrowers qualify for both but choose FHA to preserve VA eligibility for a future purchase. This rarely makes financial sense unless you're buying an investment property and plan to use VA for your next primary residence within two years.
Yes, active-duty service members qualify for VA loans with at least 90 consecutive days of service. You'll need to obtain a Certificate of Eligibility from the VA before applying.
VA loans typically cost less because the VA caps lender fees and you avoid upfront mortgage insurance premiums. FHA requires a 1.75% upfront premium rolled into the loan.
No, but FHA requires mortgage insurance regardless of down payment size. If you have 20% down, conventional loans eliminate this cost entirely and make more sense.
Only if repairs are minor and don't affect safety or habitability. VA appraisers flag issues like peeling paint, broken windows, and roof damage that must be fixed before closing.
FHA officially accepts scores as low as 580 for 3.5% down. VA has no minimum score requirement, but most lenders want at least 620 for competitive rates.
Yes, VA Interest Rate Reduction Refinance Loans let eligible veterans refinance out of FHA. This eliminates mortgage insurance and typically lowers your rate with minimal paperwork.