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in Cotati, CA
Both FHA and VA loans offer lower barriers to entry than conventional mortgages, but they serve different borrower groups. FHA works for anyone who qualifies, while VA requires military service.
In Cotati's tight housing market, government-backed loans give buyers leverage with lower down payments and flexible approval standards. The right choice depends on your military status and how much cash you have saved.
FHA loans accept down payments as low as 3.5% with credit scores starting at 580. You pay an upfront mortgage insurance premium of 1.75%, then annual premiums for the loan's life in most cases.
These loans allow higher debt ratios than conventional mortgages, making approval easier if you carry car payments or student debt. Sellers in Cotati see FHA offers as reliable because government backing reduces lender risk.
VA loans require zero down payment for eligible veterans and active-duty service members. You pay a one-time funding fee (typically 2.3% for first use), but no monthly mortgage insurance ever.
VA allows 100% financing with competitive rates and doesn't enforce minimum credit score requirements, though most lenders want 620 or higher. In Sonoma County's competitive market, zero-down financing helps veterans preserve cash for closing costs and reserves.
The biggest split is eligibility: VA demands military service, FHA accepts anyone. VA saves you thousands over time by eliminating monthly mortgage insurance, while FHA charges it for the loan's duration unless you refinance.
Down payment tells the second story. VA offers true zero-down financing; FHA needs 3.5% minimum. Both charge upfront fees, but VA's funding fee can be waived for disabled veterans while FHA's insurance premium applies to everyone.
If you qualify for VA based on military service, use it. The monthly payment savings from eliminated mortgage insurance beat FHA across nearly every scenario, especially on Cotati purchases above $500,000.
FHA makes sense when VA isn't available or when you're buying a multi-unit property that exceeds VA lending limits. For first-time buyers without military service, FHA opens doors that conventional loans keep closed due to low down payment flexibility.
No, you choose one or the other. VA offers better terms for eligible borrowers, so use VA if you qualify for both programs.
Both take 30-45 days typically. VA appraisals can add a few days, but neither program creates significant timing differences in practice.
Sellers often favor VA because qualified buyers carry zero-down financing with strong approval odds. FHA buyers need 3.5% down but face similar acceptance rates.
On a $600,000 purchase: FHA charges $10,500 upfront; VA charges $13,800 for first use. VA saves more monthly by eliminating ongoing insurance.
Yes, if you become VA-eligible through military service. Many borrowers refinance FHA to VA to drop monthly mortgage insurance permanently.