The Department of Veterans Affairs on a federal level provides mortgage insurance for veterans, while the California VA system offers loans at competitive interest rate for service members. To be eligible, applicants must have received an honorable discharge, been active duty for at least 90 days or been a member of the National Guard or Reserves for one year. These rules are quite broad and have some exceptions, meaning most veterans in California are eligible.
Like most other lenders, CalVET does assess its applicants for risky credit, but it may be more liberal than traditional banks. Every veteran is given fair consideration, and once approved rates are the same no matter what the analysis. This system works because CalVET owns every home sold. Rather than the bank, veterans pay off CalVET loans directly. Certain grants can be applied to the down-payment, and there are also loans available for the purpose of home improvement. CalVET loans cannot offer refinancing, however, but allow debtors to move to another service if they find better rates elsewhere.
Veterans may have a difficult time choosing between this loan program and the federal VA’s mortgage insurance. Consulting with an adviser from Common Sense Mortgage Group, Inc. will help to further illustrate the distinctions and reach a decision on the best course of action.