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in Nevada City, CA
Both FHA and VA loans offer government backing with easier approval than conventional mortgages. The key difference: VA loans serve military members exclusively, while FHA is open to anyone who qualifies.
Nevada City's historic homes and smaller inventory make choosing the right loan critical. Understanding which program gives you the strongest offer matters when competition heats up.
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 that vary by loan amount and down payment.
These loans work well for first-time buyers and borrowers with credit challenges. FHA accepts higher debt ratios than conventional loans and allows non-occupant co-borrowers to help you qualify.
Loan limits in Nevada County reach $806,500 for single-family homes in 2025. FHA accepts gifts for your down payment and closing costs from approved sources.
VA loans require zero down payment for eligible veterans and active military. Instead of mortgage insurance, you pay a one-time funding fee that ranges from 1.4% to 3.6% based on service type and whether it's your first VA loan.
Credit requirements are flexible, with most lenders approving 620+ scores. The VA doesn't set a maximum loan amount, though lenders have their own limits based on your income and creditworthiness.
Disabled veterans get the funding fee waived entirely. VA loans prohibit prepayment penalties and limit what sellers can charge you at closing.
The biggest split: down payment and ongoing costs. VA requires nothing down; FHA wants 3.5%. VA's funding fee is one-time; FHA's mortgage insurance continues for the loan's life if you put down less than 10%.
Eligibility creates the second major divide. VA demands military service credentials through a Certificate of Eligibility. FHA only requires you to meet credit and income standards as a primary residence buyer.
Interest rates typically favor VA loans by 0.25% to 0.5% because the government guarantee is stronger. This gap translates to real monthly savings over 30 years, especially on Nevada City's higher-priced Victorian and craftsman homes.
If you're military-eligible, VA wins on cost and flexibility. Zero down, no monthly mortgage insurance, and better rates make it the strongest option for qualified borrowers buying in Nevada City or nearby Grass Valley.
Choose FHA if you're not military-connected or need a co-borrower who won't live in the property. FHA also works better if the home needs repairs, since VA appraisals are stricter about property condition.
For Nevada City's older housing stock, expect VA appraisers to flag issues like wood-burning stoves, peeling paint, or outdated electrical. FHA is more lenient here, though both programs allow renovation financing through 203(k) and VA Renovation Loan options.
No, you must choose one program per purchase. If you're VA-eligible, that's typically the better financial choice due to zero down and no monthly mortgage insurance.
Both take similar timeframes, typically 30-40 days. VA's stricter appraisal requirements can occasionally delay closing if property issues arise that need repair.
Some sellers worry about VA appraisal requirements on older homes. A strong pre-approval and quick closing timeline matter more than loan type in most situations.
Yes, if you're military-eligible. This move eliminates monthly mortgage insurance and often secures a lower rate, making it a common refinance strategy.
Most lenders approve FHA at 580 and VA at 620. Some VA lenders go lower with compensating factors like strong income or cash reserves.