by Laura Mueller
For military veterans looking to settle down in California, two mortgage assistance programs mean there are options when it comes to financial support. VA-guaranteed mortgage loans, which are available to all U.S. veterans by means of the U.S. Department of Veterans Affairs, and state-specific CalVet mortgage loans, overseen by the California Department of Veterans Affairs, both serve to bolster veteran property purchases in California and make it easier for former and active military members to put down roots. Here’s a quick explainer on what each has to offer.
VA Home Loans in California
VA-guaranteed mortgage loans are available to all U.S. veterans, regardless of what state they live in. There is no maximum to the amount that an eligible veteran may borrow, but there are caps on the guaranty amount ($453,100 for most 2018 loans). The cap doesn’t mean veterans can’t buy properties above the limit, but it does mean a down payment may be required.
In California, however, where market prices tend to be higher than in many other states, the cap on the guaranty amount is also higher—$679,650 in Los Angeles and San Francisco, for example. Upon purchase, VA-guaranteed mortgages provide veterans with full legal title and ownership of their properties.
To qualify for a VA home loan, veterans must meet one or more of the following conditions:
- 90 days of consecutive war-time service
- 181 days of peacetime service
- 6 or more years in the National Guard or Reserves
- Spouse of a service member who died in active duty or due to a service-related disability
CalVet Mortgage Loans
CalVet operates a little bit differently than VA-guaranteed home loans. Instead of providing veterans with financing and full legal title, CalVet purchases a veteran’s desired property and then sells it to him or her using a contract of sale. Veterans are gives equitable title over the property (CalVet hangs on to the legal title), as well as full ownership rights.
CalVet offers 100% financing with no down payments for those who qualify, and is also able to provide veterans with reduced fees on homeowners insurance rates. The maximum loan amount however is lower than VA rates in the state.
Under California’s Military & Veterans Code, almost all veterans qualify for a CalVet mortgage loan, barring those who received a dishonorable discharge. Veterans are eligible whether they served during war-time or peacetime, and must show just 90 days of active duty and proof of an honorable discharge.
Choosing your best VA loan in California
Veterans interested in purchasing land or a home in California should choose the mortgage assistance program that benefits them the most financially. Be sure to compare and contrast the various factors of each program, evaluating not just differences in interest fees but also the cost of homeowners insurance and loan funding fees. Fortunately, both VA-guaranteed mortgages and CalVet mortgages were created with the distinct purpose of helping military veterans get what they need to make a major real estate purchase. The support is there—it’s just up to veterans decide which one offers them a better deal.