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in Santa Clarita, CA
Both FHA and VA loans help Santa Clarita buyers get into homes with less cash upfront than conventional loans require. The key difference is eligibility—VA loans are reserved for military members and veterans, while FHA loans are open to anyone who qualifies.
Most buyers choose based on what they're eligible for, not preference. If you qualify for a VA loan, it's usually the better deal because you skip the down payment and mortgage insurance entirely.
FHA loans let you put down as little as 3.5% if your credit score is 580 or higher. You'll pay mortgage insurance premiums both upfront and monthly for the life of the loan in most cases.
Credit requirements are more forgiving than conventional loans, making FHA a solid option for first-time buyers or anyone rebuilding credit. We see FHA work well for Santa Clarita townhomes and condos where lower purchase prices make the 3.5% down manageable.
Loan limits in Los Angeles County are $644,000 for 2024. Sellers can contribute up to 6% toward your closing costs, which helps offset the upfront mortgage insurance premium of 1.75%.
VA loans require zero down payment and charge no monthly mortgage insurance. You pay a one-time funding fee that ranges from 1.4% to 3.6% depending on down payment and whether it's your first VA loan.
Sellers can pay all your closing costs on VA loans, which means you can buy a home with just the funding fee to cover. Credit requirements are flexible, and most lenders approve borrowers with 620+ scores.
The VA loan limit doesn't cap what you can borrow—it determines whether you need a down payment. In Santa Clarita, you can buy above $766,550 with zero down if your income and credit support it.
The biggest split is upfront cost versus ongoing payments. VA loans eliminate the down payment and monthly insurance, but you pay a higher funding fee upfront. FHA requires 3.5% down plus ongoing insurance premiums that add $200-400 monthly on typical Santa Clarita purchases.
Interest rates on VA loans run 0.25%-0.5% lower than FHA in most markets because the VA guarantee is stronger. Over 30 years on a $500,000 loan, that rate difference saves roughly $50,000 in interest.
Property requirements differ too. VA appraisers flag more repairs than FHA, which can kill deals on older Santa Clarita homes that need work. FHA is less strict on property condition.
If you're eligible for VA, use it. The savings from zero down payment and no monthly insurance beat FHA in almost every scenario, even accounting for the funding fee.
Choose FHA when you're not military-eligible or when the property won't pass VA's stricter inspection standards. We also see FHA work better for buyers with limited income who need the lower credit standards and higher debt-to-income allowances.
In Santa Clarita's newer developments like Valencia or Newhall Ranch, both loans perform well. For older homes in Canyon Country or Saugus that need minor repairs, FHA gives you more flexibility on property condition.
Yes, but the condo project must be FHA or VA approved. Most newer developments in Valencia qualify, but older complexes sometimes don't make the cut.
FHA typically closes slightly faster because VA appraisals take longer and flag more repair items. Both usually close within 30 days.
Neither loan requires reserves in most cases. Some lenders ask for 1-2 months on higher loan amounts, but it's not a program requirement.
Yes, VA streamline refinances let you switch from FHA if you're military-eligible. You'll drop the FHA mortgage insurance and likely lower your rate.
Some sellers worry about VA appraisal repairs, but strong offers with quick closings get accepted. Pre-approval from an experienced VA lender helps.