100% Financing – Is USDA or VA better?
What are the differences between USDA and VA 100% financing loans?
While USDA and VA home loans can be fantastic financing options that provide high mortgage qualifying flexibility, they also have unique features and eligibility requirements that even many lenders are not aware of. As a USDA and VA approved lender, one of the most common questions I receive is “What are the differences between USDA and VA home loans?”
Remember, if you need help or a have question that is what we are here for, so just call or email to discuss your scenario because we are known for returning calls, replying to emails, and responding to your messages.
Now, wouldn’t it be nice if everyone did that!
- 100% Financing – USDA and VA home loans
As a starting point, both USDA and VA home loans offer 100% financing. In other words, there is NO down payment required for either a USDA or VA home loan.
In addition, when compared to conventional loan requirements, USDA and VA loans are both known for their flexible credit qualifying through reduced minimum scores, manual underwriting availability, and shortened time frames for recent bankruptcies, foreclosures, and short sales.
Remember that minimum credit conditions will apply, so let us know if you have a specific scenario to discuss.
- Unique Eligibility Requirements
Next, both USDA and VA home loans are very specific when it comes to eligibility. Both of these loan program
s offer unique criteria for eligibility, which are completely different from FHA and Conventional loan qualifying guidelines.
USDA guidelines specify that applicants must meet household income limits as outlined per county and the property being purchased must be located in a USDA eligible area.
On the other hand, VA loans are only available to eligible military service members and in some cases surviving spouses.
- Do USDA or VA loans have PMI?
USDA Loans require a 1% Guarantee fee which is a one-time charge collected at closing that may be financed into the loan. While USDA loans do not technically have PMI, they do have an annual fee which is calculated on a monthly basis and included with your mortgage payment.
VA loans do not have PMI or any monthly charges, and the VA Funding Fee is a one-time cost collected at closing which may be financed into the loan.
The VA Funding Fee ranges anywhere from 0% to 3.6% and is calculated based on the type of service, previous usage, purchase or refinance, any down payment, and the funding fee is waived for certain Veterans that have a service-connected disability and for the surviving spouse of a Veteran who meets certain eligibility requirements.
Who can help you qualify for a USDA or VA home loan?
Metroplex Mortgage Services is an approved USDA and VA lender, and takes pride in serving both the military and rural communities that we work in.
Due to the specific systems we have in place that help our customers walk through the qualification process, we are able to assist with important items such as:
- VA Certificate of Eligibility,
- Calculating the VA entitlement,
- Reviewing eligible USDA areas and property types,
- Determine USDA income eligibility, and
- Much more!
Remember to use my team as a resource and take advantage of our overall mortgage experience and expertise. Whether it be USDA, VA, FHA, or Conventional, just call or email to discuss your scenario and let us show you the “Metroplex” difference!
(800) 806-9836 Ext. 280