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in San Rafael, CA
Both FHA and VA loans offer government backing that makes homeownership more accessible in San Rafael's competitive market. The right choice depends entirely on your military service status and financial profile.
FHA loans open doors for civilian buyers with modest down payments. VA loans reward military service with zero down payment options and no mortgage insurance.
FHA loans require just 3.5% down if your credit score hits 580. You'll pay mortgage insurance for the life of the loan on most purchases, which adds to your monthly payment.
Credit requirements are forgiving compared to conventional loans. Sellers in Marin County know FHA financing is solid, though you'll need the property to meet FHA appraisal standards.
Debt-to-income ratios can stretch to 50% with strong compensating factors. This flexibility helps buyers qualify for higher amounts in pricey markets like San Rafael.
VA loans eliminate the down payment entirely for eligible veterans and active-duty service members. You pay a one-time funding fee instead of ongoing mortgage insurance, which saves significantly over time.
Credit requirements are flexible, and lenders typically approve scores around 620. The VA appraisal protects you with stricter property standards than conventional loans require.
No maximum debt-to-income ratio exists, though most lenders cap around 55%. San Rafael sellers understand VA financing is reliable despite myths about difficult transactions.
The biggest split is eligibility: VA loans require military service while FHA loans are open to everyone. That single factor decides the comparison for most borrowers before looking at terms.
On costs, VA loans win dramatically over time. The funding fee ranges from 1.4% to 3.6% of the loan amount but you avoid monthly mortgage insurance entirely. FHA charges 1.75% upfront plus 0.55% to 0.85% annually for the loan's life.
Down payment differences matter hugely in expensive Marin County. Zero down on a $900,000 San Rafael home means keeping $31,500 that FHA would require at closing.
If you qualify for a VA loan, use it. The terms beat FHA financing on nearly every measure that affects your wallet. Skip VA only if the property fails VA appraisal requirements that it would pass under FHA.
FHA makes sense for civilian buyers who can't access VA benefits. You'll build equity despite the insurance costs. Many San Rafael buyers use FHA to enter the market, then refinance out of mortgage insurance once equity reaches 20%.
Run the actual numbers with both programs before deciding. In San Rafael's price range, the monthly savings from avoiding mortgage insurance with VA can exceed $500. That difference compounds to serious money over a 30-year term.
Yes, active-duty service members qualify for VA loans. You'll need a Certificate of Eligibility and typically at least 90 days of continuous service.
Most sellers treat both equally since both have government backing. Concerns about either program are usually based on outdated information or specific property condition issues.
Only by putting 10% down and holding the loan 11 years, or refinancing to conventional once you hit 20% equity. Otherwise it stays for the life of the loan.
No, the one-time VA fee is much cheaper than paying FHA mortgage insurance monthly for decades. VA saves most borrowers tens of thousands over time.
You can request repairs from the seller or use FHA instead if the issues aren't deal-breakers. VA standards protect you from buying properties with safety or structural problems.
You can only use one per purchase. If you've used your VA entitlement, you might choose FHA for a second property, but most veterans have sufficient remaining entitlement.