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in Fort Bragg, CA
Fort Bragg buyers often choose between FHA and VA loans for their low down payment options. Both are government-backed, but they serve different borrowers with different benefits.
FHA works for most first-time buyers with modest credit. VA is exclusive to veterans and military families, offering better terms if you qualify.
The right choice depends on your military status and how much you can put down. We'll break down what each loan actually costs and requires.
FHA loans require just 3.5% down with a 580 credit score. You'll pay an upfront mortgage insurance premium of 1.75% plus monthly premiums between 0.55% and 0.85%.
These loans accept higher debt ratios than conventional mortgages. Lenders allow up to 50% debt-to-income in many cases, making approval easier for buyers with car payments or student loans.
FHA works well for Fort Bragg buyers who don't qualify for VA benefits. The insurance costs more than VA loans but less than conventional loans with low down payments.
VA loans require zero down payment for eligible veterans and active military. You pay a one-time funding fee between 1.4% and 3.6%, but no monthly mortgage insurance.
Credit requirements are flexible—most lenders approve 620 scores, sometimes lower. VA limits debt ratios to 41% but allows exceptions with strong compensating factors.
The funding fee gets rolled into your loan amount. First-time VA users pay 2.3% with zero down, dropping to 1.65% if you put down 5% or more.
Eligibility is the main split. VA requires military service—active duty, veterans, or qualifying surviving spouses. FHA accepts anyone who meets income and credit standards.
Monthly costs favor VA significantly. A $400,000 Fort Bragg home with FHA means $350 monthly insurance. VA pays nothing monthly after the upfront funding fee.
Down payment rules differ sharply. VA allows zero down on any loan amount. FHA requires 3.5% minimum, which means $14,000 on a $400,000 purchase.
Property standards are stricter with VA. VA appraisers flag wood-destroying insects, peeling paint, and safety issues that FHA might pass. Coastal Fort Bragg homes sometimes need repairs to meet VA requirements.
If you qualify for VA benefits, use them. The zero down option and lack of monthly insurance save thousands over the loan term, even accounting for the funding fee.
FHA makes sense when you don't have military eligibility. The 3.5% down payment beats conventional loans requiring 5-10% down with similar insurance costs.
First-time military buyers sometimes prefer FHA if they want to preserve VA eligibility for a future purchase. You can use VA benefits multiple times, but selling or refinancing is required between uses.
Fort Bragg's older housing stock sometimes complicates VA approvals. Homes built before 1978 face lead paint inspections, and coastal properties may have termite or moisture issues VA appraisers flag.
No, you choose one loan type per property. However, you can use VA on one property and FHA on another if you qualify for both programs.
VA typically offers rates 0.25% to 0.5% lower than FHA. Rates vary by borrower profile and market conditions.
FHA requires both upfront and monthly mortgage insurance. VA charges a one-time funding fee but no monthly insurance, saving hundreds each month.
FHA requires 580 minimum for 3.5% down. VA lenders typically want 620, though the VA itself sets no minimum score.
Both programs have strict property standards. VA is pickier about defects, making turnkey homes easier to finance than properties needing significant repairs.
VA has no loan limit for qualified veterans with full entitlement. FHA caps at $498,257 in Mendocino County for 2024.