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in Sierra Madre, CA
Both FHA and VA loans offer lower down payments than conventional mortgages. The main difference is eligibility: FHA is open to anyone who qualifies, while VA requires military service.
In Sierra Madre's competitive market, choosing the right loan affects your buying power and monthly costs. Each program has distinct advantages depending on your background and financial profile.
FHA loans allow down payments as low as 3.5% with credit scores starting at 580. You'll pay an upfront mortgage insurance premium of 1.75% plus annual premiums ranging from 0.55% to 1.05%.
These loans work well for first-time buyers and borrowers rebuilding credit. FHA accepts higher debt ratios than conventional loans and allows recent bankruptcies or foreclosures with proper seasoning.
The mortgage insurance stays for the life of the loan if you put down less than 10%. This ongoing cost adds roughly $100-$300 monthly on a typical Sierra Madre home purchase.
VA loans require zero down payment for eligible veterans and service members. There's no monthly mortgage insurance, though you pay a one-time funding fee ranging from 1.4% to 3.6% based on service type and down payment.
Credit requirements are flexible, with most lenders approving scores of 620 or higher. VA loans offer competitive rates and don't impose maximum loan limits in most California counties, including Los Angeles.
The biggest advantage is long-term savings from eliminated mortgage insurance. On a $800,000 Sierra Madre purchase, that saves roughly $400-$500 monthly compared to FHA.
Eligibility is the first divider. VA requires military service or surviving spouse status with a valid Certificate of Eligibility. FHA is available to anyone meeting credit and income standards.
Monthly costs differ significantly. FHA charges ongoing mortgage insurance that typically costs $200-$400 monthly. VA has no monthly insurance, just a one-time funding fee you can roll into the loan.
Down payment requirements separate casual buyers from serious ones. FHA needs at least 3.5% down. VA allows zero down, preserving your cash for renovations or reserves.
Both programs limit what sellers can charge in fees and require properties to meet minimum condition standards. VA inspections are typically stricter than FHA appraisals.
If you're military-connected and have your Certificate of Eligibility, VA beats FHA in almost every scenario. The zero down and no mortgage insurance save substantial money over the loan term.
Choose FHA if you're not eligible for VA benefits. It's the most accessible government loan for civilian buyers with limited savings or credit challenges.
Some buyers qualify for VA but prefer FHA for specific properties. If a home won't pass VA's stricter condition requirements, FHA offers a viable alternative with similar low down payment options.
Run the numbers with both programs. We compare total costs including insurance, funding fees, and rates to show which saves you more over your expected ownership period.
Yes, veterans with honorable discharge maintain VA loan eligibility for life. You'll need to obtain your Certificate of Eligibility through the VA.
Only if you put down 10% or more, then it drops after 11 years. With less than 10% down, it stays for the loan's life.
VA loans typically price 0.25% to 0.50% lower than FHA. Rates vary by borrower profile and market conditions.
Both require properties to meet safety and livability standards. Major repairs must be completed before closing or through renovation loan programs.
FHA requires 580 minimum for 3.5% down. VA has no official minimum, but most lenders want 620 or higher.