If you’re a current or former member of the U.S. Military, we thank you for your service. VA loans offer affordable homebuying options for active service members, military veterans and their families. Provided by the United States Department of Veterans Affairs, these mortgages offer advantages that ease the financial burden on prospective homebuyers.
Most VA loans come with the added benefits of zero down payments, lower interest rates and no requirements for mortgage insurance. The VA sets these mortgage conditions and guarantees a portion of the loan amount which is in lieu of a down payment from the Veteran. Financing for the property purchase is still provided by a lender.
Borrowers will still need to be approved by a qualified lender under VA loan conditions in order to secure this type of mortgage.
While these loans generally follow the same processing steps nationwide, the VA does set specific requirements for some areas. Standards around energy efficiency, insect inspectionos and environmental hazards can all vary from state to state and borrowers are obligated to meet these standards for an approved loan.
The area below provides some insight on how California's VA mortgage loan requirements might differ:
For properties listed on a master appraisal, the combined value of the optional items selected by a veteran purchaser can not exceed 15 percent of the reasonable value assigned for the base plan type (exclusive of any lot premium).
Why use Guaranteed Rate for your California VA Loan?
As a proud partner of the USO, we're dedicated to helping guide and support veterans and their families through their home buying or refinance process.² For all of 2020, qualifying borrowers pay no lender fee on California VA loans. Veterans and current members of the US Armed Forces can save $1,440 when you buy or refinance with Guaranteed Rate.³
Frequently asked questions
In order to apply for a VA loan, borrowers must first receive a certificate of eligibility. These letters provide documented proof of the applicant's history of service and whether they are entitled to a VA loan.
Certificates of eligibility allow applicants to demonstrate their history of military service to a lender. COE's can be obtained by veterans, active members of the military or national guard and families of service members. Depending on the applicant's service history and current status, the conditions for providing proof of service can vary.
Proof of service requirements can include discharge or separation papers, history of retirement benefits, or signed statements of service. If a borrower does not meet the minimum service requirements, but left military service due to reduction in forces, a medical condition, or other external forces may still be able to obtain a certificate of eligibility.
No, since VA loans are backed and guaranteed by the US government, private mortgage insurance is not required. This, in addition to zero down payments and lower interest, Could save VA loan borrowers throughout the mortgage's term.
Yes, VA loans not only help veterans and their families pay less on upfront costs, but also come with lower interest rates than those of traditional conventional mortgages that will greatly reduce the amount paid throughout the life of the mortgage.
These potential long-term mortgage savings are only available for VA loans, which can offer lower than typical fixed-interest rates.⁴
Loan interest rates are set by the lender and are determined by several factors. Current market conditions, a borrower's credit score and the duration of the mortgage all influence the loan's interest rate.
Yes, VA Loans are backed by the Government National Mortgage Association.
Ginnie Mae was created to provide a path to home ownership for underserved populations, such as military veterans and their families. By purchasing VA loans, Ginnie Mae creates an outlet for loans that could represent more risk in the private secondary market. Lenders can offer more lenient terms and reasonable loan options as a result.
Yes. To secure a VA loan as a surviving spouse, you'll need to meet a few additional requirements:
You have not remarried.
Your spouse was killed in service or from a service-related disability.
Your spouse was missing in action or a prisoner of war for at least 90 days.
Your spouse was rated disabled and was eligible for disability compensation at the time of death.
When determining how much you'll pay each month for your VA home loan, these are the key factors you need to consider. See our full VA home loan calculator for more details.
Funding fee (only if financed)
No, but can certainly help. If you choose to get prequalified, you'll provide documentation that outlines your financial situation, such as bank statements, pay stubs and credit reports. This information is then reviewed by your lender, who is able to determine if you're an acceptable candidate for a loan, and if so, what kind of mortgage rate will be offered.
The VA funding fee is an upfront expense paid when applying for a VA mortgage. Rather than your lender, this cost goes directly to the Department of Veterans Affairs to keep the program running.
Yes, Borrowers who qualify for a VA mortgage will almost always be required to pay a funding fee. According to the VA.gov, the VA funding fee in 2021 is 2.3% of the home's principal amount. If you've utilized the VA mortgage program previously, you'll have to pay a slightly higher 3.6%. This increase can also be mitigated by contributing 5% or more as a down payment.
Yes. However, in order to avoid paying a VA funding fee, your service history will have to match up with one of these requirements:
You already receive VA disability income.
You're eligible for disability income but receive active-duty or retirement pay.
You have a memorandum that states you're eligible for disability pay, dated before your loan closing.
You're an active duty Purple Heart recipient.
You're the surviving spouse of a veteran who died as a result of their military service.
Yes. While it is possible to build your new home through VA financing, VA construction loans typically come with a higher interest rate, strict requirements and short repayment timelines.
To alleviate some of the risk taken on by lenders, the VA insures a portion of the loan, helping pave the way for military members to obtain financing. However, some lenders might not offer VA construction loans given the level of uncertainty associated with building a home.
Unlike VA mortgages, which are backed by the Department of Veterans Affairs, VA small business loans are partially guaranteed by the Small Business Administration. The SBA is a government agency with the purpose of driving entrepreneurship and fostering the development of small businesses. According to SBA.gov, veteran-owned businesses represent one of the fastest growing segments of the economy. This agency has its own Office of Veterans Business Development, which takes in applications and helps back loans provided by third-party lenders.
Yes, California offers VA small business loans.
The SBA offers a number of programs designed to help veterans sustain their small business or get their operations off the ground. Here's a look at some of the most popular VA small business loan options and how they might suit your situation:
SBA Standard 7(a) loan program
SBA Express Loan
Military Reservist Economic Injury Disaster Loan (MREIDL)
SBA 504 Loan Program
Yes! You can obtain a VA loan for a manufactured or modular home with Guaranteed Rate in all states, single-wide manufactured homes and leasehold properties not included. Like all VA loans, you need a Certificate of Eligibility and proof of service.
No, however, depending on your state and county, you could receive a tax exemption. Ask your VA specialist about your requirements.
Applying for a VA home loan might stray from the conventional loan process, but that doesn't mean it's difficult to do. Let's break it down step by step for a clearer picture on how to apply for a VA loan.
The VA funding fee is an upfront expense paid when applying for a VA mortgage. Before we get into how much this expense will cost and how it can be avoided, let's understand when you will be required to pay a VA funding fee.
Requirements for VA mortgages are generally set along the same lines as conventional home loans. In addition to functioning electrical and plumbing systems, your target property will need to have a safe source of water.
The VA offers opportunities for active military members and veterans to become homeowners without some of the fees and financial burdens that come with conventional mortgages. But what about building a home from scratch?
If you're a veteran with an established business that could use some financial assistance, or if you're still looking to get your small organization off the ground, there are a variety of lending programs that can help you strengthen your company.
Before approving a VA mortgage, the Department of Veterans Affairs will usually need to ensure that risk is minimized. While it might not be required in every state, termite and pest inspections are a vital part of the VA home loan process.
1. Guaranteed Rate, Inc. is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture or any other government agency. 2. United Service Organizations, Inc. (USO) is a non-profit 501(ϲ)(3) organization (EIN/Tax ID: 13-1610451) and not part of the Department of Defense (DoD). Guaranteed Rate and the USO are not affiliated with any government agency. 3. Waived $1440.00 lender fee available for VA loans that have a triggered RESPA app date as of January 1, 2023 through December 31, 2023 at 11:59pm EST. This offer does not extend to Housing Finance Agency loans. ‘Triggered RESPA’ in accordance with Regulation X, is defined as lender receipt of all six pieces of information received in a secure format; applicant name, property address, home value, loan amount, income and SSN. Not all borrowers will be approved. Borrower’s interest rate will depend upon the specific characteristics of borrower’s loan transaction, credit profile and other criteria. Offer not available from any d/b/a or operations that do not operate under the Guaranteed Rate name. Restrictions apply. 4. Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Contact Guaranteed Rate, Inc. for current rates. Restrictions apply. 5. Sample scenario provided for illustration purposes only and is not intended to provide mortgage or other financial advice specific to the circumstances of any individual and should not be relied upon in that regard.