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in Madera, CA
Both FHA and VA loans offer government backing, but they serve different borrowers in Madera. FHA loans help first-time buyers who need low down payments, while VA loans reward military service with zero-down financing.
Most Madera buyers qualify for one or the other, not both. Your military status determines which path you take, and each program has distinct costs and requirements that affect your monthly payment.
FHA loans require 3.5% down with credit scores as low as 580. You pay an upfront mortgage insurance premium of 1.75% plus annual premiums of 0.55% to 0.85% for the loan's life.
These loans cap at $498,257 in Madera County for single-family homes. FHA works well for first-time buyers who have saved a modest down payment but don't qualify for conventional financing.
Seller concessions can cover up to 6% of closing costs. This lets buyers finance most upfront expenses, though you'll pay mortgage insurance regardless of equity level.
VA loans require zero down payment for eligible veterans and active-duty service members. There's no monthly mortgage insurance, which saves $150-$300 monthly compared to FHA on a typical Madera home.
You pay a one-time funding fee of 2.3% for first use with zero down, or 1.65% with 5% down. Veterans with service-connected disabilities pay no funding fee at all.
VA loans have no maximum loan amount in most cases. Lenders set their own limits based on your income and debt ratios, giving qualified borrowers more purchasing power than FHA.
The biggest split is monthly cost. A $400,000 VA loan saves roughly $250 monthly compared to FHA because you skip mortgage insurance premiums that FHA charges forever.
Down payment requirements differ completely. FHA needs $14,000 down on that same home, while VA requires nothing upfront beyond closing costs.
Eligibility is the deciding factor. VA demands military service with specific length and discharge requirements, while FHA accepts any borrower who meets credit and income standards.
Both programs allow credit scores in the 580-620 range, though many lenders set their own minimums higher. Rates vary by borrower profile and market conditions, but VA typically prices 0.125% to 0.25% lower than FHA.
If you're an eligible veteran or service member buying in Madera, VA wins every time. Zero down and no mortgage insurance create massive savings over the loan term.
Non-veterans use FHA when conventional loans reject them. The 3.5% down requirement beats conventional's typical 5% minimum, and FHA accepts borrowers conventional lenders decline.
Run the numbers on total upfront costs versus monthly savings. VA's zero down offsets the funding fee within 18-24 months through lower payments, assuming you don't have disability exemption.
Some veterans still choose FHA when their VA entitlement is tied up in another property. This happens when you own a home with an existing VA loan and want to buy again without selling first.
Yes, prior FHA use doesn't affect VA eligibility. If you qualify for VA benefits through military service, you can use them regardless of past loan types.
Timeline depends on your lender and paperwork readiness, not loan type. Both FHA and VA close in 25-35 days with responsive borrowers and clean files.
VA requires an appraisal with specific property standards, but not a full inspection. FHA has similar appraisal requirements, so neither is significantly stricter.
Yes, VA refinancing works if you gain eligibility through military service. Many veterans refinance FHA loans to VA to eliminate mortgage insurance.
Both accept 580-620 credit scores officially. Individual lenders often set higher minimums, but these overlays apply equally to both programs.
FHA 203(k) renovation loans exist, but VA also offers renovation options. Neither program has a clear advantage for properties needing work.