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California VA Loan Down Payment Requirements for Borrowers

VA loans are a popular mortgage option among California’s military members and veterans. It’s easy to see why. This program offers tremendous benefits for home buyers.

Borrowers tend to have a lot of questions about this program, especially when it comes to the California VA loan down payment requirements. We’ve answered some of those common questions below.

At a glance: For most borrowers, there is no down payment requirement for a California VA loan. That’s the primary advantage of this program. It’s designed to help you purchase a home with a minimal upfront investment. But there is one scenario where a home buyer might have to put money down on a California VA loan. Learn more below.

California VA Loan Down Payment Requirements

The VA loan program allows home buyers in California to buy a house with zero money down. That’s a major benefit, especially when you consider the relatively expensive nature of the California real estate market.

Most borrowers who use a VA loan do not have any down payment requirements to worry about. They can finance up to 100% of the purchase price. This is what draws borrowers to this program in the first place. They use it to facilitate a home purchase while minimizing their out-of-pocket expense.

As it states on the U.S. Department of Veterans Affairs website, VA-backed purchase loans require “no down payment as long as the sales price isn’t higher than the home’s appraised value (the value set for the home after an expert reviews the property).”

While most borrowers can finance 100% of the home purchase, there are some down payment requirements in certain scenarios. A person without remaining / partial entitlement who buys a home above the conforming loan limits for their county might have to make a down payment of some kind. So let’s talk about that next.

Why Some Borrowers Have to Put Money Down

When it comes to using a VA loan in California, there are basically two types of borrowers:

Full entitlement. If you have never used a VA loan before, or if you’ve used one but paid it off through the sale of your home, you should have full entitlement. This means there are no down payment requirements for your California VA loan. Additionally, there aren’t any official loan limits that apply to you. It’s left up to the mortgage lender to determine how much you can borrow.

Remaining entitlement. If you have an active VA loan that you’re still repaying, or you paid it off but still own the home, you likely have “remaining” entitlement. This means you could encounter a down payment requirement. If you purchase a home below your county’s conforming loan limits, you can finance 100% of the purchase price. But if you buy a house that exceeds your county’s limits, you might have to make a down payment based on the difference.

As you can see, California VA loan down payment requirements can vary depending on the borrower and the situation. For most home buyers, there are no loan limits and no government-imposed down payment requirements. But for those borrowers with the remaining or “partial” entitlement, a down payment might be needed if the purchase price exceeds conforming loan limits.

An Ideal Solution for an Expensive Real Estate Market

Let’s face it, California can be an expensive place to live. This is especially true in the coastal regions like the San Francisco Bay Area and Southern California.

Because of this, many home buyers seek ways to minimize the upfront costs associated with a home purchase. A California VA loan is one way to accomplish that goal.

Borrowers with full VA loan entitlement do not have a down payment requirement or an official loan limit imposed by the government. As a result, it’s possible to borrow a significant amount of money when using a California VA loan.

We have generated VA jumbo loans up to $5 million in some cases, often without a down payment requirement for the borrower. You won’t find this kind of financing flexibility with any other mortgage program.

Questions? If you have additional questions about California VA loan down payment requirements or other criteria, please contact our staff. Located in the Bay Area, we serve home buyers and homeowners across the Golden State. We specialize in the VA loan program and can answer any questions you might have.

Mike Trejo

Mike Trejo is a Bay Area mortgage broker with 20+ years of knowledge and experience.

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