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in Vacaville, CA
Both FHA and VA loans offer government backing, but they serve different borrowers with different benefits. FHA loans work for anyone who qualifies, while VA loans are exclusive to military service members and veterans.
In Vacaville's diverse housing market, these programs open doors for buyers who can't put 20% down. Understanding which program you're eligible for—and which saves you more money—determines your path forward.
FHA loans let you buy with just 3.5% down if your credit score hits 580. Scores between 500-579 still qualify, but you'll need 10% down instead.
You'll pay two mortgage insurance premiums: 1.75% upfront and annual premiums of 0.55%-0.85% depending on loan size and term. These premiums stick around for the life of most FHA loans, adding to your monthly payment.
FHA accepts debt-to-income ratios up to 50% in some cases. This flexibility helps Vacaville buyers with student loans, car payments, or other obligations that conventional lenders might reject.
VA loans require zero down payment for eligible veterans and active-duty service members. You also skip monthly mortgage insurance entirely, which saves hundreds per month compared to FHA.
You'll pay a one-time funding fee of 2.3% for first-time use with zero down. This fee drops to 1.65% if you put down 5% or more, and it's waived completely for disabled veterans.
VA lenders typically want 620+ credit scores, though some go lower. The program caps how much sellers can charge in closing costs, protecting you from excessive fees at closing.
The biggest split is eligibility: VA loans require military service, while FHA loans are open to anyone. If you qualify for both, VA typically saves more money through eliminated mortgage insurance.
FHA charges ongoing monthly insurance premiums that add $200-400 to your payment on a typical Vacaville home. VA has no monthly insurance, just the upfront funding fee that gets rolled into your loan.
Down payment requirements separate them clearly. FHA needs 3.5% minimum, while VA allows zero down for eligible borrowers. On a $500,000 Vacaville purchase, that's $17,500 saved upfront with VA.
If you have VA eligibility, use it. The combination of zero down and no mortgage insurance beats FHA on both upfront and monthly costs. Even with the funding fee, you'll save thousands over the loan term.
Choose FHA if you're not military-connected or if your credit sits below 620. FHA's 580 minimum credit score and flexible debt ratios make it the accessible option for buyers rebuilding credit or carrying higher debt loads.
Consider conventional loans before either program if you have 5%+ down and 680+ credit. You might avoid mortgage insurance sooner and access better rates, especially in Vacaville's competitive market.
Yes, VA loan benefits restore after you sell and pay off the previous VA loan. You can reuse the program multiple times throughout your life.
Yes, FHA charges annual mortgage insurance for the loan life regardless of down payment. This is why many borrowers refinance to conventional later.
Both programs take similar timeframes, typically 30-45 days. VA appraisals can add a few days due to stricter property requirements.
VA allows gift funds and some DPA programs. Check with your lender, as combining programs may affect your funding fee calculation.
FHA goes as low as 580 for 3.5% down. VA lenders typically want 620+, though requirements vary by lender.