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in Exeter, CA
Both FHA and VA loans offer easier qualification than conventional mortgages, but they serve different borrowers. FHA works for anyone with decent credit and 3.5% down, while VA is reserved for military members who qualify for zero-down financing.
In Exeter's housing market, these government-backed options help buyers who lack big down payments. Your military status determines which path you can take, and both have trade-offs worth understanding before you apply.
FHA loans accept credit scores as low as 580 for 3.5% down or 500 with 10% down. They charge an upfront mortgage insurance premium of 1.75% plus annual premiums that last the loan's life if you put down less than 10%.
You can buy primary residences including single-family homes, condos, and multi-family properties up to four units in Exeter. FHA sets loan limits by county, and sellers can contribute up to 6% toward your closing costs.
The biggest drawback is mortgage insurance that doesn't drop off like it does on conventional loans. You'll pay it monthly unless you refinance later, which adds hundreds to your payment over time.
VA loans require zero down payment if you're an eligible veteran, active-duty service member, or qualifying surviving spouse. They charge a funding fee instead of mortgage insurance—typically 2.3% for first-time zero-down buyers, which you can roll into the loan.
You avoid monthly mortgage insurance entirely, giving VA loans the lowest monthly payments of any zero-down option. Credit requirements are flexible, and most lenders approve scores around 620, though the VA itself sets no minimum.
VA loans only work for primary residences, and you'll need a Certificate of Eligibility from the Department of Veterans Affairs. Exeter has homes that fit VA financing, but you can't use this for investment properties or vacation homes.
The monthly payment difference is significant. VA loans skip monthly mortgage insurance, while FHA charges it permanently unless you refinance. On a typical Exeter home, that's $150-250 more per month with FHA.
FHA asks for 3.5% down minimum, which might be $10,000-15,000 on an Exeter property. VA requires nothing upfront beyond closing costs and the funding fee. If you qualify for VA, that's real money saved at purchase.
Credit flexibility favors FHA slightly at the bottom end—scores as low as 580 work. VA lenders typically want 620 or higher. But VA's lack of monthly insurance makes it cheaper long-term even if rates are similar.
If you're military-eligible, VA wins on cost every time. You'll save thousands at closing and hundreds monthly compared to FHA. The only reason to choose FHA when you qualify for VA is if you're buying a multi-family property that VA won't cover.
Non-military buyers don't get a choice—FHA is your government-backed option with low down payments. It costs more than VA but still beats conventional if you have under 20% down and want easier approval.
Veterans with lower credit scores around 580-620 might find FHA approves faster, but the higher monthly cost isn't worth it. Work on your credit for three months and use VA instead.
No, you can't combine them. You pick one loan type per property purchase, and if you're eligible for VA, it's almost always the better financial choice.
Only if you put down 10% or more—then it drops after 11 years. With 3.5% down, you're stuck with it unless you refinance to conventional later.
Upfront yes, but VA has no monthly premium. FHA charges 1.75% upfront plus monthly fees that add up to far more over a 30-year loan.
FHA typically closes quicker because VA requires additional property inspections and eligibility verification. Budget 30-35 days for FHA, 35-45 for VA.
Both require homes to meet safety standards at purchase. For major renovations, look at FHA 203k or VA renovation loans instead.