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in Vallejo, CA
Vallejo attracts both first-time buyers and military families, making FHA and VA loans two of the most requested programs at our brokerage. Both offer government backing and lower barriers to entry than conventional financing.
The choice between them isn't always obvious. If you qualify for a VA loan, it usually beats FHA on cost and flexibility. But FHA remains the stronger option for non-military buyers who need lenient credit standards.
FHA loans require just 3.5% down with a 580 credit score, making them accessible for buyers with limited savings or past credit issues. You'll pay an upfront mortgage insurance premium of 1.75% plus monthly insurance that typically runs 0.55%-0.85% of your loan amount.
These loans work for primary residences including single-family homes, condos, and multi-unit properties up to four units. Debt-to-income ratios can stretch to 50% with compensating factors, giving you more buying power than many conventional options.
The property must meet FHA appraisal standards, which are stricter than conventional guidelines. Peeling paint, roof damage, or foundation issues can kill a deal until the seller makes repairs.
VA loans eliminate the down payment entirely for eligible veterans and active-duty service members. You'll pay a one-time funding fee ranging from 1.4%-3.6% depending on down payment and first-time use, but this can be rolled into the loan.
No monthly mortgage insurance exists on VA loans, giving you significantly lower payments than FHA. Lenders typically require 620+ credit, though we've seen approvals as low as 580 with compensating factors like strong reserves.
VA appraisals focus on safety and habitability rather than cosmetic perfection. The program allows up to 100% financing without hitting PMI thresholds that plague other low-down-payment products.
The funding fee versus mortgage insurance decision makes the biggest financial impact. FHA's monthly insurance adds $200-$400 to your payment on a typical Vallejo home, while VA's one-time fee costs more upfront but saves thousands annually.
Eligibility separates these programs completely. VA requires military service with a Certificate of Eligibility, while FHA welcomes any borrower who meets credit and income standards. If you qualify for both, VA wins on cost 95% of the time.
Property requirements differ in subtle but important ways. FHA appraisers flag more cosmetic issues, while VA focuses on structural safety and mechanical systems. We see more FHA deals delayed by required repairs in Vallejo's older housing stock.
Use your VA benefit if you have it. The zero-down feature plus no monthly insurance saves $300-$500 monthly compared to FHA on the same purchase price. You preserve cash for closing costs, repairs, and emergency reserves.
FHA makes sense for non-military buyers who can't hit conventional loan requirements. The 3.5% down beats saving 20%, and the flexible credit standards approve buyers with past bankruptcies or foreclosures after waiting periods.
Both programs handle Vallejo's price range well and accept properties in various conditions. The real decision comes down to eligibility first, then cost comparison if you somehow qualify for both options.
No. Both programs require owner occupancy as your primary residence. You must move in within 60 days of closing and live there at least one year.
VA typically costs less overall despite the funding fee. FHA's upfront mortgage insurance premium adds 1.75% to your loan amount, similar to VA's funding fee range.
VA loans usually price 0.125%-0.25% better than FHA due to lower default risk. Rates vary by borrower profile and market conditions.
Yes. Many Solano County assistance programs stack with FHA loans. VA buyers can also access grants, though the zero-down benefit often makes assistance unnecessary.
FHA requires 580 for 3.5% down, 500 for 10% down. VA lenders typically want 620+, though we've closed deals at 580 with strong compensating factors.
Neither program has limits in 2024. You can finance any amount the lender approves based on your income and debt ratios.