California Veterans using the VA home loan program are able to buy homes with no down payment up to the county limit. But what does it take to be eligible for a VA loan, especially when it comes to someone who has served in the National Guards or Reserves. Many of those who have served in the National Guard or Reserves are not even aware that they qualify for the VA home loan program.
Why a California VA Home Loan is so Awesome
Loan programs allowing for $0 down financing are mostly a thing of the past. There are programs like FHA, which only require a down payment of 3.5%. But FHA also has a fairly expensive monthly mortgage insurance payment for the life of the loan that VA does not have. So while an FHA borrower will pay several hundred dollars a month in some cases for the privilege of only needing 3.5% down payment, VA allows for $0 down AND has no monthly mortgage insurance. Other advantages include:
- The California VA approved condo list is much bigger than the FHA approved condo list
- The California VA loan limits in most county’s are higher than the FHA loan limits. For example, in Orange county and Los Angeles county, the FHA loan limit is $625,500. The VA loan limit in both county’s is $687,500.
- The Jumbo VA Loan. Many VA lenders who close VA loans above the 100% financing loan limit. The Veteran needs to come in with a small down payment, but loan amounts can be as higher as $1,500,000.
- VA 30 year fixed rates tend to compare very favorably to Conventional and Jumbo 30 year fixed programs.
How a Reservist or National Guard becomes Eligible for a VA Home Loan
A Reservist or National Guard member may qualify for a VA home loan if they meet one of the following qualifications:
- Served 6 years in the Selected Reserve or National Guard and were either; a) Honorably discharged; or b)Retired; or c)transferred to Standby Reserve, or an element of the Ready Reserve other than the Selected Reserve, after honorable service
- Served in the Selected Reserves for more than 6 years
- Served as active duty for more than 90 days during a wartime period or 181 days during peace time
- Discharged or released from active duty for a service related disability
How to Get your Certificate of Eligibility
An easy way to retrieve your Certificate of Eligibility, which will verify your eligibility for a VA home loan, is to contact a California VA lender. A VA lender can quickly access the VA portal and request the Certificate of Eligibility. In some cases, either a DD214 (for discharged Veterans) or Statement of Service (for active) will be needed, as well as the completion of VA Form 26-1880, the Request for Certificate of Eligibility. This can also be provided by the California VA Lender.
The first in any home buying process is to contact a lender who can prepare custom VA loan scenarios with details on the purchase price, payment, and closing costs. Consulting with an experienced California VA lender is important if the home buyer wants to have a smooth home buying experience with no last minute “surprises”.
Authored by Tim Storm, a California VA Loan Officer specializing in VA Loans. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.