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in Lodi, CA
Both FHA and VA loans help Lodi buyers who lack 20% down. The difference comes down to your military status and how much cash you have at closing.
FHA works for anyone with decent credit and 3.5% down. VA requires military service but asks for zero down and eliminates mortgage insurance entirely.
FHA loans require 3.5% down with credit scores as low as 580. You pay an upfront mortgage insurance premium of 1.75% plus annual premiums that add $150-$300 to your monthly payment.
Lodi buyers use FHA when they have some savings but not enough for conventional down payments. Credit flexibility makes it work for borrowers rebuilding after financial setbacks.
VA loans require zero down payment and charge no monthly mortgage insurance. You pay a funding fee between 1.4% and 3.6% depending on down payment and prior VA loan use.
Rates typically run 0.25% to 0.5% lower than FHA because the VA guarantee reduces lender risk. This translates to $75-$150 less per month on a typical Lodi purchase.
Down payment separates these programs first. FHA needs 3.5% saved while VA accepts zero. On a $450,000 Lodi home, that's $15,750 versus nothing out of pocket.
Monthly costs differ more than most buyers expect. VA loans skip mortgage insurance entirely while FHA charges it for the loan's life on 3.5% down purchases. This saves VA borrowers $200-$300 monthly.
Use VA if you qualify. The zero down requirement and lack of mortgage insurance beat FHA on almost every deal. Veterans choosing FHA instead of VA typically don't understand their benefits.
FHA makes sense only for non-military buyers or veterans who've exhausted their VA entitlement on other properties. If you're active duty or a veteran buying in Lodi, start with VA before considering anything else.
No, you choose one loan type per purchase. Veterans should use VA benefits first since they offer better terms than FHA on every metric that matters.
FHA and VA close in similar timeframes of 30-45 days. VA appraisals sometimes take longer, but the difference rarely exceeds a week in San Joaquin County.
Sellers prefer conventional financing, but between FHA and VA there's no strong preference. Both require property condition standards that sometimes need repairs before closing.
Yes, veterans can refinance FHA loans into VA loans anytime. This move eliminates mortgage insurance and often reduces your rate by 0.5% or more.
FHA officially requires 580 for 3.5% down. VA has no official minimum, but most lenders want 620 or higher for competitive rates.