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in Willows, CA
Both FHA and VA loans offer flexible financing for Willows homebuyers. The right choice depends on whether you qualify for VA benefits and how much you can put down.
FHA loans work for anyone who meets credit and income standards. VA loans require military service but eliminate down payments and mortgage insurance entirely.
FHA loans let you buy with just 3.5% down if your credit score hits 580. Scores between 500-579 need 10% down, and lenders typically want 620 minimum anyway.
You'll pay upfront mortgage insurance of 1.75% plus annual premiums of 0.55% for the loan's life on most purchases. These costs add up but make homeownership accessible to more buyers.
Debt-to-income ratios can reach 50% with strong credit and compensating factors. FHA works well for first-time buyers or anyone who needs flexible approval standards.
VA loans require zero down payment for eligible veterans and active-duty service members. You'll need a Certificate of Eligibility and meet lender credit standards, typically 620 minimum.
No monthly mortgage insurance exists on VA loans. You pay a one-time funding fee of 2.3% for first use with zero down, which drops to 1.65% with 5% down or waives entirely for disabled veterans.
VA loans allow higher debt ratios than FHA in many cases. Lenders focus on residual income requirements that ensure you have enough cash left after housing and debt payments.
The biggest split is down payment and mortgage insurance. FHA needs 3.5% down plus ongoing insurance costs while VA eliminates both for qualified borrowers.
VA loans cost less monthly because you skip mortgage insurance entirely. On a $300,000 purchase, FHA adds roughly $138 monthly for insurance while VA adds nothing.
Eligibility differs completely. Anyone with qualifying income and credit can use FHA, but VA requires military service or surviving spouse status with a valid Certificate of Eligibility.
If you qualify for VA benefits, use them. Zero down payment and no mortgage insurance save thousands over the loan term compared to any other option including FHA.
FHA makes sense when VA isn't available or you've already used your entitlement on another property. It's the best low-down-payment option for non-military buyers in Willows.
Some borrowers qualify for both but choose FHA for specific property types VA won't approve or to preserve VA benefits for a future purchase. Talk through your long-term plans before deciding.
Yes, your VA entitlement restores after selling and paying off the previous VA loan. You can also buy again with remaining entitlement while keeping the first property.
VA loans typically price 0.25% to 0.50% lower than FHA because the government guarantee reduces lender risk. Rates vary by borrower profile and market conditions.
VA appraisals check more items than FHA, including wood-destroying insects and certain safety features. Both require the home to meet minimum property standards for financing approval.
VA allows you to finance the funding fee but not other closing costs. FHA doesn't permit rolling any costs into the loan amount at purchase.
Most lenders want 620 minimum for both programs despite FHA technically allowing 580. Scores below 620 limit your lender options significantly.