What Is the Difference Between a VA Home Loan & a CalVet Home Loan?


In recent decades, the Department of Veterans Affairs of the United States of America has been guaranteeing mortgage loans on behalf of qualifying military veterans. In addition, the state of California has its own mortgage loan programme to help eligible military veterans. Department of Veterans Affairs of the State of California Both CalVet mortgage loans and VA mortgage loans, which seek to assist military veterans in purchasing houses, are comparable in many areas and have a same goal. On the other hand, there are a few key distinctions.

CalVet Eligibility Requirements

To qualify for a CalVet mortgage loan, applicants must be either military veterans or active service military members currently residing in the state of California. Veterans of the United States Armed Forces who meet the requirements may apply for mortgage loans backed by the VA in any state, including California. When compared to those of a VA mortgage loan, the conditions to qualify for a CalVet home loan are somewhat less stringent and more open-ended. Because to recent amendments to California’s Military and Veterans Code, the vast majority of service members, with the exception of those who were dishonourably discharged or received punitive discharges, are now qualified for CalVet home loans.

CalVet Versus VA Mortgages

The fact that contracts of sale are used to acquire CalVet mortgages stands out as the most notable distinction between CalVet mortgages and VA mortgages. Simply said, CalVet will buy the property that is sought by a qualifying veteran of the armed forces and then sell it to the veteran via a contract of sale. This kind of transaction is also referred to as a land contract. Legal title to a house purchased with a CalVet mortgage is held by the CalVet programme; however, the service veteran who used the mortgage to purchase the home owns equitable title, which is the right to acquire full ownership of the property. When applying for VA mortgages, veterans of the armed forces are guaranteed to gain instant complete legal title and ownership of the homes they purchase.

Benefits of CalVet Mortgages

You will still have numerous ownership rights in a CalVet-procured house even if you have equitable title to the property, including the ability to deduct mortgage interest and property taxes. Because CalVet retains the legal title to the house you purchased with its financing, it is able to negotiate an affordable group rate for the homeowner’s insurance that you will be responsible for carrying. In addition to allowing veterans to finance the funding fee that is levied for their loans, CalVet also provides financing with no down payment required and at 100 percent. The maximum amount that may be borrowed via CalVet is $589,785, and it can be used in either Alameda or San Francisco County. This is less than the maximum amount that may be borrowed under VA financing, which is $636,150.

CalVet Affect on VA Eligibility

When you utilise a CalVet mortgage, your eligibility for a VA loan may be compromised in certain circumstances. CalVet goes to the VA to get a guarantee on some of its loans so that it may finance some of those loans. If you are purchasing a property with the assistance of a CalVet loan and the guarantee is really provided by the VA, it is possible that this may lower the amount of funding that the VA will provide for your loan. After you have either paid off your CalVet mortgage in full or refinanced it into a loan from a regular lender, your eligibility for a CalVet loan and a VA loan will be reinstated.