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in Santa Rosa, CA
Both FHA and VA loans offer lower barriers to entry than conventional mortgages. The right choice depends entirely on whether you qualify for VA benefits and how much you can put down.
Santa Rosa buyers often weigh these two options when credit or savings are limited. FHA works for most borrowers, while VA delivers unmatched terms if you've served.
FHA loans require just 3.5% down with a credit score as low as 580. You'll pay mortgage insurance premiums for the life of the loan unless you refinance later.
We see FHA approvals in Santa Rosa for borrowers who can't qualify conventional but have stable income. Two-year job history and debt-to-income under 50% usually gets you approved.
VA loans require zero down payment and no monthly mortgage insurance. You pay a one-time funding fee that ranges from 1.4% to 3.6% depending on down payment and service type.
Eligibility requires 90+ days of active duty during wartime or 181+ days during peacetime. Surviving spouses and some National Guard members also qualify with certificate of eligibility from the VA.
Down payment separates these programs most. FHA demands 3.5% minimum while VA allows zero down for eligible borrowers.
Mortgage insurance costs differ dramatically. FHA charges 0.85% annually on your full loan amount plus upfront premium. VA has no monthly insurance but charges a one-time funding fee you can roll into the loan.
Credit flexibility leans toward FHA for lower scores, but VA offers better rates and terms for qualified borrowers. VA also caps what lenders can charge in fees, while FHA follows standard guidelines.
If you qualify for VA benefits, use them. Zero down and no mortgage insurance beat FHA on monthly cost and total interest paid over 30 years.
Choose FHA if you're not military-connected or if your certificate of eligibility has issues. It remains the most accessible low-down-payment option for Sonoma County buyers without service history.
Some borrowers use FHA as a stepping stone, then refinance to conventional once they hit 20% equity. VA borrowers typically keep their loans longer since terms are already competitive.
Yes, both programs work for primary residences in all Santa Rosa neighborhoods. Neither restricts rural or agricultural zoning as long as the home meets safety standards.
FHA typically closes 2-3 days faster since VA requires additional property inspections. Most VA loans in our pipeline close within 30 days regardless.
Sellers often favor FHA because VA appraisals can be stricter on repairs. A strong offer price and quick close timeline matter more than loan type in competitive situations.
Yes, if you receive VA disability compensation or are a surviving spouse. All other borrowers pay the fee, but you can finance it into the loan amount.
Both stretch to 50% DTI with compensating factors. VA underwriters sometimes approve slightly higher ratios for borrowers with strong residual income calculations.