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in Palmdale, CA
Both FHA and VA loans help Palmdale buyers get into homes without massive down payments. The difference is who qualifies and what you'll actually pay over time.
FHA loans work for anyone who meets income and credit standards. VA loans require military service but deliver better terms across the board.
For eligible veterans in Palmdale, VA loans almost always beat FHA on total cost. The question is whether you qualify and whether your home meets VA property standards.
FHA loans require just 3.5% down with credit scores as low as 580. You'll pay upfront mortgage insurance of 1.75% plus annual premiums of 0.55% to 0.80% for most loans.
These loans work well for first-time Palmdale buyers who don't have military service. Debt-to-income ratios can stretch to 50% with strong compensating factors.
The catch is mortgage insurance doesn't drop off. On loans over 90% LTV, you pay it for the entire loan term unless you refinance out later.
VA loans allow zero down payment for eligible veterans and active military. You'll pay a funding fee of 2.15% to 3.3% depending on service type and down payment.
No monthly mortgage insurance exists on VA loans. This creates massive savings compared to FHA, often $200 to $400 monthly on Palmdale-priced homes.
Credit flexibility rivals FHA, with most lenders approving scores from 580 up. Debt ratios stretch further than conventional loans when residual income guidelines are met.
The $300 monthly mortgage insurance on a $450,000 FHA loan adds up to $108,000 over 30 years. VA loans skip this entirely, though you pay a higher upfront funding fee.
VA loans allow 100% financing while FHA caps at 96.5%. For Palmdale buyers without savings, that 3.5% difference means needing $15,000 less cash at closing on a typical purchase.
Property condition matters more with VA loans. Appraisers flag peeling paint, roof issues, and safety hazards that might slide through FHA inspection.
If you're eligible for VA benefits, use them. The monthly savings from no mortgage insurance outweigh the higher funding fee within two to three years.
FHA makes sense for non-military Palmdale buyers who need low down payments. It's also the backup when a home doesn't meet VA property requirements.
Some buyers use both strategically. Buy with FHA now, then use VA entitlement on a second property or investment later when you have equity to work with.
Yes, active duty qualifies immediately. You'll need a Certificate of Eligibility from the VA and orders showing at least 90 days of continuous service.
Only if you put down 10% or more at purchase. Otherwise it stays for the loan's full term unless you refinance to conventional or VA later.
VA loans typically price 0.125% to 0.25% better than FHA. Rates vary by borrower profile and market conditions, so compare both options with a broker.
FHA has more tolerance for cosmetic issues. VA requires homes to be move-in ready with no safety hazards or deferred maintenance flagged by appraisers.
Switch to FHA or conventional financing. Some Palmdale sellers fear VA appraisals will kill deals, though this happens less than reputation suggests.
Yes, but the condo project must be approved by FHA or VA. Many Palmdale complexes have approvals for both programs already on file.