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in Cudahy, CA
Both FHA and VA loans help Cudahy buyers with limited cash reserves get into homes. The difference comes down to military service and how much you need to bring to closing.
FHA loans work for anyone who qualifies. VA loans require military eligibility but offer better terms. Most borrowers choosing between these two already know if they have VA benefits.
FHA loans let you buy with 3.5% down if your credit score hits 580. You'll pay upfront mortgage insurance plus monthly premiums for the life of most FHA loans.
FHA works well for first-time buyers in Cudahy who aren't veterans. Credit as low as 500 gets considered with 10% down. Seller can cover up to 6% of closing costs.
The main cost is mortgage insurance that never drops off on loans over 90% LTV. You're stuck with that monthly payment unless you refinance later.
VA loans require zero down payment for eligible veterans and service members. You pay a funding fee unless you're disabled, but there's no monthly mortgage insurance.
VA accepts credit scores around 580 with most lenders. The funding fee runs 2.15% for first-time use with zero down but gets financed into the loan.
Seller can pay up to 4% toward closing costs. Appraisals are stricter than FHA because VA wants to protect veterans from overpriced properties.
The down payment splits these programs cleanly. FHA needs 3.5% minimum while VA requires nothing from eligible borrowers.
Monthly costs favor VA significantly. FHA charges mortgage insurance premiums that add $150-300 monthly on typical Cudahy home prices. VA has no monthly insurance.
Upfront costs look different too. FHA charges 1.75% mortgage insurance at closing. VA charges 2.15% funding fee for first use. Both can be rolled into the loan amount.
If you have VA eligibility, use it. The monthly savings from no mortgage insurance outweigh FHA benefits in almost every scenario.
FHA makes sense only if you're not a veteran or your VA entitlement is tied up in another property. Some buyers use FHA on investment properties while keeping VA benefits for their primary home.
For Los Angeles County properties, VA appraisals can be tough on older homes needing repairs. If you're buying a fixer in Cudahy, FHA sometimes closes deals VA won't approve.
Yes, your VA entitlement restores after you sell and pay off the previous VA loan. You can also use remaining entitlement for a second property in some cases.
VA loans typically price 0.25% to 0.50% below FHA rates. Rates vary by borrower profile and market conditions.
Yes, but VA is stricter. Both need properties safe and habitable, but VA appraisers flag issues FHA might overlook.
Veterans with service-connected disabilities are exempt. Purple Heart recipients also qualify for exemption regardless of disability rating.
FHA typically closes faster because appraisals are less strict. VA appraisals often require repair negotiations that add 1-2 weeks.