Potential for No Down Payment
Eligible borrowers may be able to purchase without a down payment when eligibility, entitlement, the appraisal and lender requirements support the transaction.
VA home loans
VA Home Loans in San Diego & California
A powerful mortgage benefit deserves a thoughtful strategy. VA financing can provide eligible borrowers with significant advantages, including the potential for no down payment and no monthly private mortgage insurance. Todd works with eligible veterans, active-duty service members and military families in San Diego and throughout California to evaluate how that benefit fits the property, entitlement, borrower profile and transaction, subject to applicable requirements.
Why VA financing is different
A program built around a different set of rules.
Program requirements, eligibility and availability vary by borrower, property and lender.
No Monthly Private Mortgage Insurance
VA loans generally do not require monthly private mortgage insurance or an FHA-style monthly mortgage insurance premium.
Competitive Financing Terms
Competitive financing terms may be available, and the VA program does not impose a prepayment penalty. Seller credits may also be available, subject to VA requirements and how the transaction is structured.
Reusable Benefit
Eligible veterans and service members may be able to use VA loan benefits more than once, depending on entitlement and the circumstances of prior VA loans.
Eligibility
Who May Be Eligible for a VA Home Loan?
VA home loan eligibility begins with qualifying service history or status and is established through a Certificate of Eligibility. Depending on the circumstances, eligibility can potentially extend to several groups.
For active-duty service members, VA states that serving at least 90 continuous days meets the minimum active-duty service requirement. For Veterans and other categories, minimum service requirements can depend on when and how the person served.
A Certificate of Eligibility establishes eligibility for the VA home loan benefit based on service history or status, but it does not itself guarantee loan approval. The borrower must also satisfy applicable lender and VA requirements involving credit, income and occupancy.
Have a COE already? Great. Don't have one yet? Your lender can often help obtain it.
Eligibility can potentially extend to
- Veterans
- Active-duty service members
- Certain National Guard members
- Certain Reserve members
- Certain surviving spouses
Eligibility determinations are made by the U.S. Department of Veterans Affairs, not by Loans by Todd K.
What Is a VA Certificate of Eligibility (COE)?
A COE tells the lender that the borrower qualifies for the VA home loan benefit based on eligible service history or status.
A borrower can request a COE through VA. A lender may also be able to obtain the COE electronically.
A COE is an important part of the process, but it is not a loan approval. Loan approval still depends on factors including income, credit, debts, property and applicable underwriting requirements.
Does the VA Have a Minimum Credit Score?
The Department of Veterans Affairs does not establish a universal minimum credit score for VA-backed home loans. Individual lenders may establish their own credit-score requirements and underwriting standards.
Because of that, a borrower should not assume that being declined by one lender automatically means the borrower is ineligible for VA financing everywhere — but that also does not mean another lender will approve the loan.
VA does not set a universal minimum credit score, but lenders may. Credit history still matters, and approval depends on the complete loan profile.
Underwriting
VA Residual Income: Why It Matters
Residual income is the income remaining after major monthly obligations and estimated expenses are considered. VA underwriting uses residual income to evaluate whether the household appears to have sufficient income remaining for normal living expenses after paying its obligations.
This is one reason VA underwriting is not simply income divided by debt equals approval. VA's debt-to-income ratio is an underwriting guide, but VA guidance treats residual income as an important factor in the overall credit analysis.
A DTI above 41% receives additional scrutiny under VA guidance, but 41% is not an automatic universal rejection threshold. The complete underwriting picture matters. You can estimate a monthly mortgage payment to see how the numbers move before we review the full profile.
San Diego context
VA borrowers purchasing in San Diego may be dealing with relatively high home prices, which makes loan structure, entitlement, cash to close and monthly-payment analysis particularly important. Reviewing those together — rather than a rate in isolation — usually produces a better decision.
VA funding fee
Understand the VA Funding Fee Before Comparing Loan Options
The VA funding fee is generally a one-time charge associated with VA-backed or VA direct home loans. It helps offset the cost of the VA home loan program. Some eligible borrowers are exempt.
The funding fee can generally be financed into the loan or paid at closing. Depending on how the transaction is structured, that choice may affect the cash required or the financed loan balance — which is why comparing a VA loan with another structure isn't only a rate comparison. Cash required at closing, the financed balance, mortgage insurance treatment and the monthly payment all belong in the same view. A down payment comparison can help frame that trade-off.
Who May Be Exempt From the VA Funding Fee?
Exemptions can include certain borrowers receiving or eligible to receive VA compensation for service-connected disabilities, certain surviving spouses receiving Dependency and Indemnity Compensation, and certain other qualifying circumstances. This page does not make an eligibility determination. Your COE and lender can help confirm your funding-fee status.
VA-backed purchase/construction funding fee rates
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% down | 2.15% | 3.30% |
| 5% or more down | 1.50% | 1.50% |
| 10% or more down | 1.25% | 1.25% |
Funding-fee rules and exemption status should be confirmed for the individual borrower and transaction.
Entitlement
What Does VA Loan Entitlement Mean?
VA entitlement is the amount of VA guaranty associated with an eligible borrower's home loan benefit. It is not the amount of money the Veteran can borrow.
For borrowers with full entitlement, VA does not impose a county loan limit on the amount the borrower may finance solely because of the VA guaranty. However, this does not mean unlimited borrowing. The borrower must still qualify with the lender based on factors such as income, credit, debts, assets, property value and applicable underwriting requirements — and the property must also support the transaction through the appraisal.
What if I've used my VA loan before?
The VA home loan benefit can potentially be used more than once.
Borrowers may be able to restore previously used entitlement in qualifying circumstances. Borrowers who have used entitlement that has not been restored may still have remaining entitlement, and remaining entitlement can affect how much can potentially be borrowed without a down payment.
Already have another VA loan or previously used your benefit? We can review your COE and remaining entitlement before you start shopping.
Do I Have to Live in the Home?
VA-backed purchase loans are intended for homes the eligible borrower will occupy as a primary residence.
VA guidance generally considers occupancy within 60 days after closing to be a reasonable time. There can be circumstances where occupancy later than 60 days may be acceptable when specific conditions are met.
These loans are not intended for investment properties, vacation homes or second homes. That said, owning other real estate does not by itself make someone ineligible.
VA Appraisal vs. Home Inspection
A VA appraisal helps establish the property's value and evaluates the property in connection with VA requirements.
A VA appraisal is not the same thing as a buyer's home inspection. Borrowers should not assume that an appraisal replaces an independent property inspection.
VA purchase process
What the transaction generally looks like.
The steps below follow the same arc as any home purchase, with a few VA-specific requirements layered in. If this is your first purchase, the first-time homebuyer resources cover the rest of the process.
01
Eligibility
Confirm VA eligibility and obtain a Certificate of Eligibility.
02
Financial qualification
Review income, assets, credit, obligations and applicable program requirements.
03
Property and contract
Identify the property and coordinate financing with the purchase contract.
04
VA appraisal
Complete the VA appraisal and any applicable property requirements.
05
Underwriting
Documentation review and final loan conditions.
06
Closing
Final loan documents, signing and funding.
A VA appraisal is not the same thing as a complete home inspection. An appraisal addresses valuation and applicable VA property requirements; a home inspection is a separate evaluation a buyer may choose to obtain.
Program options
VA Purchase and Refinance Options
Which structure fits depends on your objective, your entitlement and the transaction in front of you.
VA Purchase Loan
For eligible borrowers purchasing a home they will occupy as a primary residence. Structure, entitlement and cash to close are reviewed together before you shop.
VA purchase strategyVA IRRRL
An Interest Rate Reduction Refinance Loan is designed for borrowers refinancing an existing VA-backed loan. It may help reduce the interest rate or payment, or make the payment structure more stable, when applicable requirements are satisfied.
Refinance optionsVA Cash-Out Refinance
Eligible borrowers may potentially refinance an existing mortgage into a VA-backed cash-out refinance, subject to qualification, equity and property value, and applicable requirements.
Refinance optionsClearing things up
Common VA Loan Myths
Myth
You need perfect credit.
Fact
VA does not establish a universal minimum credit score, although lenders may establish their own requirements and credit history remains part of underwriting.
Myth
You can only use a VA loan once.
Fact
Eligible borrowers may be able to use the VA home loan benefit more than once, depending on entitlement and the circumstances of prior VA loans.
Myth
VA loans are only for first-time buyers.
Fact
The VA home loan benefit is not limited to first-time homebuyers.
Myth
A VA appraisal is the same as a home inspection.
Fact
It is not. The appraisal and an independent home inspection serve different purposes.
VA questions
VA Home Loan FAQs
Answers to the questions most VA borrowers ask before they start shopping. Still have one that isn't here? Get in touch.
VA refinancing
The benefit doesn't end at the purchase.
VA borrowers may have refinance options, including certain VA-to-VA refinance structures such as an Interest Rate Reduction Refinance Loan (IRRRL), subject to applicable requirements. Whether a refinance makes sense depends on your objective, the existing loan and the transaction.
Worth reviewing together
- What the refinance is meant to accomplish
- The structure of the existing loan
- Costs associated with the transaction
- How long you expect to keep the financing
- Applicable program and lender requirements
Next step
Use the VA benefit as part of the bigger financial strategy.
Compare the payment, cash requirements and financing structure before deciding how to use your benefit.
You'll work directly with Todd Klinger, Mortgage Loan Originator, NMLS #1825956, with Barrett Financial Group, L.L.C., NMLS #181106.
VA loan eligibility, entitlement, funding fee treatment, property requirements and program guidelines are determined by the U.S. Department of Veterans Affairs and participating lenders. This page is general information, not a commitment to lend. Loans by Todd K and Barrett Financial Group, L.L.C. are not affiliated with or endorsed by the U.S. Department of Veterans Affairs or any government agency.