For veterans and service members
VA Loans
The strongest loan in the country, and the one most often left on the table. No down payment with full entitlement, no monthly mortgage insurance, and a rate a future buyer may be able to take over from you.
If you served, the VA loan is almost always the first thing I check. Not out of politeness. It is usually the best math on the table, and a lot of veterans in Orange County have been talked into a conventional loan by someone who found VA paperwork inconvenient.
I have been writing loans since 2002 and I am licensed in 32 states. VA files are not harder. They are different, and the difference is worth money to you.
What the VA loan actually gives you
No down payment, with full entitlement. Not a low down payment. None. You still pay closing costs, and a seller can pay some or all of those.
No monthly mortgage insurance. Conventional loans under 20% down charge PMI. FHA charges monthly MIP, usually for the life of the loan. VA charges neither. On an Orange County price, that difference alone is often a few hundred dollars a month, every month.
A funding fee instead. The VA charges a one-time funding fee that can be rolled into the loan. It changes based on your down payment and whether this is your first use.
You may be exempt from the funding fee entirely. Veterans receiving VA disability compensation are generally exempt. So are some surviving spouses and certain Purple Heart recipients on active duty. This is checked on your Certificate of Eligibility, and it is missed more often than it should be. If someone quoted you a VA loan with a funding fee and you receive disability compensation, get a second look.
No loan limit with full entitlement. The county conforming limit does not cap you. That matters a great deal here, where the Orange County high-balance limit is $1,249,125 and plenty of houses cost more. Individual lenders set their own ceilings, so the shopping still matters.
No prepayment penalty. Ever.
The part nobody tells you: VA loans are assumable
This is the biggest thing on this page.
A VA loan can be taken over by a qualified buyer at your original interest rate. If you bought or refinanced in 2020 or 2021, you may be sitting on a rate in the 2s or low 3s. In a market like this one, that rate is an asset, and it is attached to your house.
Two things to understand before you count on it:
- The buyer must qualify and be approved, through the servicer. It is not automatic and it is not fast. Plan on it taking longer than a normal loan.
- Your entitlement usually stays tied up unless the buyer is also a veteran who substitutes their own entitlement. That can block you from using your VA benefit on your next house. This is the trade, and it is a real one.
If you are selling a home with a low-rate VA loan on it, tell your listing agent. It is a marketing advantage most agents in North OC are not using.
The four VA loans I write
VA purchase
Buying with your benefit. Full entitlement means no down payment and no county loan limit. Partial entitlement, because you have an existing VA loan or a past claim, means the math changes but the loan often still works. Home purchase loans.
VA cash-out refinance
Pull equity out, and VA allows a higher loan-to-value than most conventional cash-out options. It also lets you refinance a non-VA loan into a VA loan, which is how a veteran with an FHA loan gets rid of monthly mortgage insurance for good.
VA IRRRL (the streamline)
Interest Rate Reduction Refinance Loan. If you already have a VA loan and rates drop, this is the low-friction way down: limited documentation, usually no new appraisal, and no cash out. It exists to lower your rate or move you from an adjustable to a fixed.
If you bought between 2022 and 2024 at six or seven percent, this is the one to watch for. Refinance.
VA renovation
Buy a house that needs work, and finance the work into the same loan. Fewer lenders do VA renovation than say they do, which is exactly the kind of gap a broker is for.
What VA asks of you that other loans do not
You have to live there. VA is for a primary residence. There are rules for spouses occupying on behalf of a deployed service member, and rules about timing, but you cannot use it for a rental.
That said, a VA buyer can purchase a two-to-four unit property, live in one unit and rent the others. That is one of the best first-investment moves available to anyone in this country, and most people never hear about it. Real estate investor loans.
Residual income. VA is the only program that checks what is left in your pocket after the mortgage, the debts, the taxes and a cost-of-living allowance for your family size and region. Some borrowers who fail a conventional debt-to-income test pass VA comfortably because of it. Others get stopped by residual income despite a clean ratio.
A VA appraisal with Minimum Property Requirements. The appraiser checks condition, safety and utilities, not just value. Peeling paint on a pre-1978 home, a bad roof, or no working heat can all stop a file. On older North OC housing stock this comes up, and it is manageable when you know it is coming.
A Certificate of Eligibility. I can usually pull it for you.
Who is eligible
Veterans, active duty service members, National Guard and Reserve members who meet service requirements, and some surviving spouses. Service length requirements vary by era and by branch.
If you are not sure whether you qualify, that is the single easiest question to answer. Call and we will check it in a few minutes rather than you wondering for another year.
Common things I fix on VA files
- A veteran who was told "VA takes too long" by an agent, and paid PMI for six years as a result.
- A veteran paying a funding fee they were exempt from.
- A veteran with an FHA loan and monthly mortgage insurance who could have refinanced into VA and dropped it.
- A veteran told they had "used up" their VA benefit when entitlement could have been restored.
- A veteran whose offer was rejected because the listing agent did not understand VA appraisals, when the file was stronger than the offer that won.
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