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in Merced, CA
Merced has a strong military-connected population near Castle Airport. That makes the VA loan question come up on almost every deal we work here.
If you qualify for VA, it's usually the better loan. But conventional still wins in specific situations. Here's how to know which one fits you.
Conventional loans aren't backed by the government. Lenders set their own guidelines within Fannie Mae and Freddie Mac rules.
You'll need at least 3-5% down and a 620 credit score minimum. Put 20% down and you skip private mortgage insurance entirely.
VA loans are guaranteed by the Department of Veterans Affairs. Eligible borrowers include veterans, active-duty service members, and surviving spouses.
Zero down payment. No monthly mortgage insurance. Rates consistently run lower than conventional. The tradeoff is a one-time VA funding fee.
HousingWire flagged the 30-year fixed hitting 6.57% recently. VA rates typically run 0.25-0.50% below conventional — that gap matters on a Merced purchase.
VA has no loan limit if you have full entitlement. Conventional follows conforming limits. For most Merced price points, neither cap is the issue.
If you're eligible for VA, run those numbers first. No down payment plus no mortgage insurance usually wins on monthly cost — even after the funding fee.
Conventional makes more sense if you're buying a rental, a second home, or you've already used VA entitlement and need flexibility. Talk to us before assuming.
VA has no official minimum credit score, but most lenders require 580-620. Conventional requires at least 620.
Yes, but the condo complex must be VA-approved. Conventional condo rules are more flexible.
It's a one-time fee rolled into the loan. It ranges from 1.25% to 3.3% depending on your down payment and prior VA use.
Yes. Conventional has no restrictions on prior government loan use. You can carry both loans at once.
Both close in similar timeframes. VA requires a VA appraisal, which can add a few days versus a standard appraisal.
VA has no monthly mortgage insurance. Conventional requires PMI if your down payment is under 20%.