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in San Juan Bautista, CA
San Juan Bautista buyers often choose between FHA and VA loans for their low down payments and flexible credit standards. Both are government-backed, but they serve different borrowers with different qualification paths.
FHA loans work for anyone who qualifies. VA loans require military service but offer better terms for those who've earned the benefit.
FHA loans require just 3.5% down with credit scores as low as 580. The Federal Housing Administration insures these mortgages, which makes lenders more willing to approve borrowers with limited savings or past credit issues.
You'll pay mortgage insurance premiums for the life of the loan unless you refinance. Upfront MIP costs 1.75% of the loan amount, and monthly MIP ranges from 0.45% to 1.05% depending on your down payment and loan term.
FHA accepts higher debt-to-income ratios than conventional loans. Most borrowers qualify with DTI up to 50% if their credit and reserves support it.
VA loans require zero down payment for eligible veterans and active-duty service members. The Department of Veterans Affairs guarantees a portion of each loan, eliminating the need for mortgage insurance.
You'll pay a one-time funding fee between 1.4% and 3.6% of the loan amount depending on your down payment and whether it's your first VA loan. Veterans with service-connected disabilities get this fee waived completely.
VA loans have strict property condition requirements. The home must meet minimum property requirements at appraisal, which sometimes kills deals on fixer-uppers in San Juan Bautista's older housing stock.
Down payment separates these loans most clearly. FHA needs 3.5% down while VA requires nothing. On a $600,000 San Juan Bautista home, that's $21,000 versus $0 out of pocket.
Monthly costs favor VA loans heavily. FHA charges ongoing mortgage insurance that adds $200-400 monthly on most loans. VA has no monthly mortgage insurance, just the upfront funding fee you can roll into the loan.
Eligibility is the hardest barrier. Anyone can get FHA with qualifying credit and income. VA requires military service through active duty, reserves, National Guard, or as a surviving spouse of a service member.
Property standards differ in rigor. FHA accepts most livable homes. VA appraisers flag peeling paint, roof issues, and safety concerns that might pass FHA review.
Choose VA if you're eligible. The zero down payment and no mortgage insurance save you tens of thousands over the loan term. Veterans shopping San Juan Bautista should only consider FHA if the property won't pass VA's minimum property requirements.
FHA makes sense for non-military buyers with limited savings. If you can scrape together 3.5% down and have credit above 580, FHA opens homeownership years before you'd save 20% for conventional.
First-time buyers without military service default to FHA in most cases. Repeat buyers with equity from a previous sale might skip both and use conventional to avoid mortgage insurance entirely.
Yes, both loan types work throughout San Benito County. Lenders approve FHA and VA loans for primary residences in San Juan Bautista regularly.
VA loans typically price 0.25% to 0.50% lower than FHA. Rates vary by borrower profile and market conditions.
San Benito County loan limits for 2024 are $766,550 for both FHA and VA. You can borrow above this with a down payment on FHA.
Only by putting 10% or more down and waiting 11 years. Most borrowers refinance to conventional before then to drop the insurance.
FHA accepts 580 minimum, though some lenders require 600. VA has no official minimum, but most lenders want 620 or higher.
No. Both FHA and VA require owner occupancy as your primary residence within 60 days of closing.