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in Petaluma, CA
Both FHA and VA loans help Petaluma buyers get into homes with less money down than conventional mortgages require. The difference comes down to eligibility: one serves anyone with modest savings, the other rewards military service.
FHA loans ask for 3.5% down and accept credit scores as low as 580. VA loans require zero down but only work if you've served in the military or are a qualifying spouse.
FHA loans let you buy a Petaluma home with just 3.5% down if your credit score hits 580. Scores between 500-579 still qualify but need 10% down.
You'll pay mortgage insurance for the loan's life unless you refinance later. Upfront, that's 1.75% of the loan amount, plus annual premiums of 0.55% to 0.85% depending on your down payment size.
FHA caps how much you can borrow based on county limits. These loans work well for first-time buyers or anyone rebuilding credit after financial setbacks.
VA loans require zero down payment if you're an eligible veteran, active-duty service member, or qualifying surviving spouse. No private mortgage insurance ever, which saves hundreds monthly.
You pay a one-time funding fee ranging from 1.4% to 3.6% of the loan amount based on service type and whether it's your first VA loan. Disabled veterans often get this waived entirely.
VA loans don't have a maximum loan amount in most cases, though your entitlement affects how much you can borrow with zero down. Credit score minimums vary by lender but typically start around 620.
The down payment split is stark: VA offers 0% down, FHA asks for 3.5% minimum. On a Petaluma home, that 3.5% difference means keeping tens of thousands in your pocket if you qualify for VA.
Monthly costs diverge further. FHA charges mortgage insurance permanently unless you refinance. VA loans skip mortgage insurance entirely, though you pay the funding fee upfront.
Eligibility creates the real divide. Anyone with stable income and decent credit can use FHA. VA demands military service but rewards it with terms no civilian loan matches.
If you qualify for VA, use it. The zero down payment and no mortgage insurance create savings FHA can't touch, especially on Petaluma's higher-priced homes.
FHA makes sense when VA isn't an option or you've already used your full VA entitlement on another property. It's the most accessible low-down-payment loan for civilian buyers.
Some borrowers qualify for both but choose FHA for specific properties VA won't approve, like fixer-uppers needing major work. VA has stricter property condition standards than FHA.
No, you pick one loan type per property. If you qualify for VA, it almost always offers better terms than FHA for that purchase.
VA loans typically price 0.25% to 0.50% lower than FHA. Rates vary by borrower profile and market conditions.
No, FHA is available to any borrower meeting credit and income requirements. VA restricts eligibility to military service members and qualifying spouses.
Yes, if you receive VA disability compensation. Purple Heart recipients and surviving spouses also qualify for funding fee exemptions.
Both require FHA or VA condo approval for the complex. VA tends to be pickier about condo association finances and owner-occupancy ratios.