Loading
in Novato, CA
Both FHA and VA loans help Novato buyers with limited cash reserves close on homes in one of Marin County's most family-friendly markets. The right choice depends entirely on your military service status and how much you can put down.
FHA loans work for civilians and require just 3.5% down with mortgage insurance. VA loans require zero down but you need military service credentials to qualify.
FHA loans let you buy in Novato with 3.5% down and credit scores as low as 580. You'll pay an upfront mortgage insurance premium of 1.75% plus monthly premiums that typically run 0.55% to 0.80% annually.
The big trade-off is permanent mortgage insurance on most FHA loans originated after 2013. Unless you put down 10% or more, you're stuck with those monthly premiums for the life of the loan.
FHA works well for first-time buyers or anyone without military service who needs lenient credit standards. Debt-to-income ratios can stretch to 50% with compensating factors like cash reserves.
VA loans are the strongest government program if you qualify through military service. Zero down payment, no monthly mortgage insurance, and competitive rates that often beat conventional loans.
You'll pay a VA funding fee that ranges from 1.4% to 3.6% of the loan amount depending on service type and whether it's your first VA loan. Disabled veterans and surviving spouses get this fee waived entirely.
Credit standards are flexible but not automatic. Most lenders want 620+ scores for VA loans, though the program itself has no minimum. Debt ratios above 41% trigger extra scrutiny but aren't disqualifying.
The down payment gap is the clearest split. FHA requires 3.5% down while VA requires nothing. On a $900,000 Novato home, that's $31,500 you either need or don't.
Mortgage insurance costs separate these programs dramatically over time. FHA charges 0.55% to 0.80% annually in monthly premiums that never drop off. VA has no monthly insurance, just a one-time funding fee that can be rolled into the loan.
Eligibility is the deal-breaker. VA loans require a Certificate of Eligibility proving military service. FHA loans have no service requirement but demand that upfront and monthly insurance premium.
Rates vary by borrower profile and market conditions, but VA loans typically price 0.125% to 0.25% better than FHA when both are available to you.
If you have a Certificate of Eligibility, VA wins in almost every scenario. Zero down, no monthly insurance, and better rates make it the strongest residential loan program in America.
FHA makes sense when you don't qualify for VA or when you're buying a multi-unit property that exceeds VA loan limits. It's also the fallback if your credit or income won't clear VA underwriting standards.
Run the math on total borrowing costs. VA's upfront funding fee looks expensive until you calculate five years of FHA mortgage insurance premiums. On a $900,000 loan, FHA insurance costs roughly $5,400 annually while VA costs nothing after closing.
No. You choose one loan type per property. If you qualify for VA, that's almost always the better financial choice due to zero down and no mortgage insurance.
Yes, if the HOA is VA-approved. Many Marin County developments maintain VA approval, but always verify before writing an offer on a condo.
Both close in 21-30 days typically. VA loans sometimes take longer if the Certificate of Eligibility needs to be requested during the transaction.
Absolutely. Many veterans start with FHA before discovering their VA eligibility. Refinancing to VA eliminates that monthly mortgage insurance permanently.
Neither has a strong advantage. Both are government-backed and reliable. Your down payment amount and price matter more than loan type to Marin County sellers.