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in East Palo Alto, CA
Both FHA and VA loans help East Palo Alto buyers with minimal cash reserves get approved. The key difference: VA requires military service but offers zero down, while FHA accepts any buyer with 3.5% down.
Most deals I see in San Mateo County involve one of these two programs. Knowing which fits your situation saves you from wasting time on the wrong application.
FHA loans let you put down just 3.5% with a 580 credit score. You'll pay upfront mortgage insurance (1.75% of the loan) plus monthly premiums that last the life of the loan.
Any buyer qualifies regardless of military status. The main cost: permanent monthly insurance you can't remove unless you refinance later.
Maximum debt-to-income ratio hits 57% on most files, which helps if you're stretching to afford East Palo Alto's pricing.
VA loans eliminate the down payment entirely for eligible veterans and active-duty service members. No monthly mortgage insurance either, which cuts your payment by $200-400 monthly on typical loans.
You pay a one-time funding fee (2.3% for first use) that gets rolled into the loan. Rates run slightly lower than FHA in most rate environments.
The approval process accepts 580 credit scores, though most lenders prefer 620. You can finance up to the county limit with zero money down.
The eligibility split matters most: VA requires a Certificate of Eligibility from military service, while FHA accepts anyone. That alone determines which loan you're using.
Monthly costs favor VA heavily. A $700,000 loan saves roughly $350 monthly by avoiding FHA's mortgage insurance premium.
Down payment separates them next. FHA needs $24,500 down on that same loan, VA needs nothing. If you have service eligibility and minimal savings, VA wins every time.
If you're a veteran or active military, use VA. The zero down and no monthly insurance make it the strongest government program available.
FHA works when you don't qualify for VA. The 3.5% down beats conventional loans requiring 5-20%, and the flexible credit standards approve files other programs reject.
I see buyers mix these based on property type too. VA limits apply to single-family homes and condos, while FHA covers a wider property range including some mixed-use buildings.
Yes, but your entitlement amount depends on whether you've paid off previous VA loans. Most veterans have enough entitlement for a second property.
Not on loans with less than 10% down. You'd need to refinance into a conventional loan once you hit 20% equity to eliminate it.
VA rates typically beat FHA by 0.125% to 0.25%. Rates vary by borrower profile and market conditions as of February 2026.
Yes. VA and FHA both require appraisals that flag safety issues and needed repairs before closing.
VA already offers zero down, so most assistance programs don't apply. FHA works with county and state assistance programs more often.