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in Santa Monica, CA
Santa Monica's coastal real estate demands smart financing. If you're military-affiliated, you've got a choice between zero-down VA financing and conventional loans that work for everyone.
Both loan types close deals in this market, but they differ sharply on down payments, rates, and qualification requirements. Your service status and savings determine which route makes sense.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. You'll need 3-20% down depending on your credit profile and whether you're buying a primary residence or investment property.
These loans work for any property type—single-family, condo, multi-unit, investment. Most lenders want 620+ credit, though stronger profiles get better rates. Rates vary by borrower profile and market conditions.
PMI kicks in below 20% down, adding monthly costs until you hit that equity threshold. No funding fee, no property certification requirements, and you can use it repeatedly without restrictions.
VA loans eliminate the down payment entirely for eligible veterans and active military. You'll pay a one-time funding fee (1.4-3.6% of the loan amount) unless you're exempt through disability rating.
These loans don't require PMI regardless of your down payment. The property must meet VA appraisal standards and serve as your primary residence—no investment properties allowed.
Eligibility requires military service and a valid Certificate of Eligibility. You can use this benefit multiple times, and it's assumable by future buyers. Rates vary by borrower profile and market conditions.
The biggest split is down payment: VA requires nothing, conventional demands at least 3%. That matters in Santa Monica where even a small down payment represents serious cash.
VA loans charge a funding fee upfront but no ongoing PMI. Conventional loans skip the funding fee but add monthly PMI below 20% down. Run the numbers—sometimes the conventional route costs less over five years despite the down payment.
Property standards differ sharply. VA appraisers flag peeling paint, roof issues, and safety concerns that conventional appraisers might overlook. Conventional loans also work for condos with lower owner-occupancy rates and investor properties.
Choose VA if you're eligible and buying a primary residence. The zero-down benefit and no PMI usually beat conventional financing, especially if you're exempt from the funding fee through disability.
Go conventional if you're buying investment property, need a second home, or the property won't pass VA appraisal standards. Also consider conventional if you've got 20%+ down and want maximum seller appeal—some agents still prefer conventional offers.
For Santa Monica condos, check the building's VA approval status before committing to VA financing. Many newer coastal buildings aren't VA-approved, forcing you into conventional anyway.
Only if the building is VA-approved. Many Santa Monica condos aren't on the VA's approved list, which forces you into conventional financing regardless of eligibility.
VA loans typically price 0.25-0.50% lower than conventional. Rates vary by borrower profile and market conditions, but VA's government backing usually wins on rate.
Some do, especially on older properties worried about VA appraisal standards. A strong conventional offer with 20% down can beat a VA offer in multiple-bid situations.
Only with a VA loan. Conventional loans require PMI below 20% down—no exceptions unless you use a piggyback second mortgage strategy.
First-time use runs 2.15% with zero down, 1.4% with 5%+ down. Subsequent use increases to 3.3% zero-down. Disabled veterans often qualify for full exemption.