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in Covina, CA
Both FHA and VA loans offer lower barriers to homeownership than conventional mortgages. The choice between them depends on whether you qualify for VA benefits and how much cash you have for closing.
In Covina's competitive market, knowing which program saves you the most money upfront matters. Most borrowers who qualify for VA loans come out ahead, but FHA has wider eligibility and still beats conventional options for many buyers.
FHA loans require just 3.5% down with a 580 credit score. You'll pay an upfront mortgage insurance premium of 1.75% plus annual premiums that last the life of most loans.
These loans work for any qualified borrower in Covina, not just veterans. Debt-to-income ratios stretch higher than conventional loans, and sellers can contribute up to 6% toward closing costs.
The catch is mortgage insurance never drops off unless you put down 10% or more. That monthly cost adds up over decades, making refinancing part of most borrowers' long-term plans.
VA loans eliminate the down payment entirely for eligible veterans and active-duty service members. You pay a one-time funding fee instead of ongoing mortgage insurance, and that fee gets rolled into the loan.
Credit requirements flex lower than FHA in practice. Most VA lenders approve 580 scores, and some go to 540 with compensating factors like cash reserves or stable income history.
Sellers can pay all your closing costs on VA loans. You could walk into a Covina home with just your inspection and appraisal money out of pocket, assuming the property appraises at or above purchase price.
The down payment gap is the headline difference. VA borrowers keep their cash while FHA buyers need 3.5% plus closing costs, which runs $15,000 to $25,000 on typical Covina homes.
Monthly costs diverge even more. FHA charges mortgage insurance forever on 3.5% down loans. VA loans have no monthly insurance premium, just the one-time funding fee that disabled veterans skip entirely.
Eligibility determines everything. If you qualify for VA benefits, the financial advantage is massive. FHA exists for everyone else who can't meet conventional loan requirements or wants lower down payments.
Use your VA benefit if you have it. The zero down payment and no mortgage insurance create thousands in monthly savings over FHA loans. Disabled veterans get the funding fee waived, making it even better.
Choose FHA when you don't qualify for VA loans or you're buying a multi-unit property above VA limits. FHA works for any buyer and still delivers lower down payments than conventional mortgages.
Your credit score matters less than your eligibility. A 600-score veteran saves more with VA than a 720-score civilian with FHA. Run the numbers on both programs if you're military-connected but considering FHA for any reason.
No, each property gets one loan type. If you're eligible for VA benefits, using them saves significantly more than FHA on monthly costs and down payment requirements.
VA loans typically run 0.25% to 0.50% lower than FHA rates. Rates vary by borrower profile and market conditions, but VA consistently beats FHA pricing.
Yes, but the condo project needs FHA or VA approval respectively. VA has stricter project requirements, so some condos accept FHA but not VA financing.
VA charges 2.3% once for zero-down first-time use. FHA charges 1.75% upfront plus 0.55% to 0.85% annually for the loan life on 3.5% down purchases.
FHA maxes at $1,149,825 in Los Angeles County for 2024. VA has no set limit but requires full entitlement and lender approval for amounts above conforming limits.