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in Lakewood, CA
Both FHA and VA loans offer lower barriers to entry than conventional financing, but they serve different borrowers in Lakewood. FHA works for anyone meeting credit and income requirements, while VA is exclusively for military borrowers.
The choice between these programs comes down to eligibility and upfront costs. VA loans require zero down payment but limited availability, while FHA accepts 3.5% down from any qualified buyer.
FHA loans allow down payments as low as 3.5% with credit scores down to 580. Most Lakewood buyers use FHA when they lack the 20% conventional programs demand but don't qualify for VA benefits.
FHA requires both upfront and monthly mortgage insurance regardless of down payment size. The upfront premium is 1.75% of the loan amount, and monthly premiums run 0.55% to 1.05% annually depending on loan size and term.
Credit standards are more forgiving than conventional loans but stricter than VA. Lenders typically approve borrowers with 580-620 credit if compensating factors like low debt ratios exist.
VA loans require zero down payment for eligible veterans, active-duty service members, and qualifying surviving spouses. This program delivers the strongest purchasing power for military buyers in Lakewood.
VA charges a one-time funding fee instead of ongoing mortgage insurance. The fee ranges from 1.4% to 3.6% of the loan amount based on down payment and whether you've used the benefit before.
Credit requirements are minimal compared to other programs. Most lenders approve VA borrowers with 580-600 credit, and the program allows higher debt ratios than FHA or conventional options.
The down payment gap is the most visible difference. VA requires nothing down while FHA demands 3.5%, which equals $17,500 on a $500,000 Lakewood home.
Ongoing costs diverge significantly after closing. FHA borrowers pay monthly mortgage insurance for the loan's life, while VA borrowers only pay the upfront funding fee with no recurring premiums.
Eligibility creates the hard line between these programs. VA delivers superior terms but remains unavailable to civilian buyers regardless of their financial strength.
If you have military eligibility, VA almost always beats FHA on total cost. The zero down payment and absence of monthly mortgage insurance create substantial savings over the loan term.
Civilian buyers default to FHA when they lack conventional financing options. The 3.5% down payment and flexible credit standards make homeownership accessible without military service.
Some military buyers choose FHA when their VA entitlement is tied up in another property or when purchasing a multi-unit property exceeding VA loan limits for Los Angeles County.
Not on the same property. You can hold both loan types on different properties if you meet eligibility requirements and have remaining VA entitlement.
VA loans typically price 0.25% to 0.50% lower than FHA due to government guarantee structure. Rates vary by borrower profile and market conditions.
Yes. FHA accepts gifts from family members and approved organizations. VA allows gifts since most buyers put zero down anyway.
Only if you put 10% or more down, then it drops after 11 years. Otherwise FHA mortgage insurance remains for the full loan term.
Both require FHA or VA condo approval for the complex. VA tends to approve more projects, making it easier for military condo buyers.