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in Larkspur, CA
Larkspur buyers often ask which government loan gives them better terms. Both FHA and VA loans offer low-barrier financing, but they serve different borrowers with different advantages.
FHA loans work for anyone who qualifies, while VA loans require military service. The right choice depends on your eligibility and financial situation, not just which has lower costs.
FHA loans let you put down as little as 3.5% with credit scores starting at 580. You'll pay mortgage insurance premiums upfront and monthly for the life of most loans.
These loans accept higher debt-to-income ratios than conventional financing. Sellers can contribute up to 6% toward your closing costs, which helps preserve cash for the down payment.
FHA works well for first-time buyers or anyone who doesn't qualify for VA benefits. The flexible credit standards make it easier to get approved after past financial setbacks.
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 your service type and whether it's your first VA loan.
Lenders typically accept higher debt ratios on VA loans than FHA. Credit score minimums vary by lender but often start around 620, though some go lower.
Only veterans, active-duty service members, National Guard, Reservists, and eligible surviving spouses qualify. You'll need a Certificate of Eligibility from the VA to proceed.
The biggest split is eligibility and upfront costs. VA requires military service but charges no down payment, while FHA accepts anyone but needs 3.5% down.
Monthly costs favor VA heavily because there's no mortgage insurance premium. FHA charges 0.55% to 0.85% annually, which adds $275 to $425 per month on a $600,000 Larkspur home.
FHA caps your loan at $1,089,300 in Marin County for 2024. VA uses the same limit but often approves higher debt ratios, giving you more buying power at the same income level.
If you qualify for VA, use it. The savings from zero down and no mortgage insurance beat FHA in almost every scenario, even after the funding fee.
FHA makes sense when you're not eligible for VA or when the seller won't accept a VA offer. Some Larkspur sellers worry about VA appraisal requirements, though those concerns are often overblown.
Run the numbers on both if you're eligible for VA but considering FHA. The monthly savings from skipping mortgage insurance usually offset the higher funding fee within two to three years.
Both programs cap at $1,089,300 in Marin County for 2024. That covers most Larkspur homes, but you'll need a jumbo loan for anything above that limit.
Timeline is similar for both, usually 30 to 45 days. VA appraisals sometimes take longer, but experienced processors handle both without major delays.
Some agents claim VA is harder, but strong offers get accepted regardless. The appraisal requirements are nearly identical between the two programs.
Yes, if you're eligible for VA benefits. Refinancing eliminates FHA mortgage insurance and often lowers your rate and monthly payment.
FHA officially goes to 580, sometimes 500 with 10% down. VA minimums vary by lender but typically start around 620.