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in Lomita, CA
Both FHA and VA loans offer low-barrier paths to homeownership in Lomita, but they serve different buyers. FHA loans work for anyone who qualifies, while VA loans require military service but deliver better terms.
Most Lomita buyers I work with choose based on eligibility first. If you qualify for VA, it usually beats FHA on cost and flexibility.
FHA loans accept credit scores as low as 580 with 3.5% down. You'll pay both upfront and monthly mortgage insurance, which adds roughly $200-300 monthly on a typical Lomita purchase.
These loans cap at $1,149,825 in Los Angeles County. Debt-to-income ratios can stretch to 50% with compensating factors, making them accessible for buyers with solid income but limited savings.
VA loans require zero down payment and no monthly mortgage insurance. You pay a one-time funding fee (2.3% for first use, waived for disabled veterans) that can be rolled into the loan.
Credit score minimums vary by lender, but most accept 620 or lower with strong compensation. The same $1,149,825 county limit applies, and appraisers enforce stricter property condition standards than FHA.
The mortgage insurance gap is massive. FHA charges 1.75% upfront plus 0.55%-0.85% annually for the loan's life. VA charges one funding fee with no ongoing premium, saving hundreds monthly.
Down payment matters less than total cost. FHA's 3.5% down looks small until you calculate insurance over 30 years. VA's zero down with no insurance usually costs less overall, even accounting for the funding fee.
Choose VA if you qualify, period. The savings on mortgage insurance alone outweigh FHA benefits in 95% of scenarios I see. The only FHA advantage is availability to non-military buyers.
FHA makes sense when you don't have VA eligibility or when the property fails VA's stricter appraisal standards. Some Lomita fixer-uppers pass FHA but not VA inspection requirements.
Yes, VA eligibility doesn't disappear after using FHA. You can refinance your FHA loan to VA or use VA benefits on a different property if you still have entitlement.
Only if you put 10% or more down, and even then you pay it for 11 years. Most Lomita FHA borrowers with 3.5% down pay insurance for the entire loan term.
FHA typically closes 2-3 days faster because VA appraisals require additional property inspections. Budget 30-35 days for VA versus 25-30 for FHA.
Both require the condo complex to be approved by FHA or VA. Many Lomita complexes have FHA approval but not VA, limiting your options with a VA loan.
You can likely qualify for VA despite the score. Most VA lenders I work with approve 580+ credit with compensating factors like steady income or cash reserves.