CALVET LOANS FREQUENTLY ASKED QUESTIONS
- What are the loan amount limits for a CalVet loan?
- What is a rate lock?
- What is an impound account?
- Does CalVet have mortgage insurance or a funding fee?
- What are the eligibility requirements for a CalVet loan?
- Can I use my CalVet loan eligibility more than once?
- What homeowners insurance protection programs does CalVet offer?
- What are the down payment requirements for a CalVet loan?
- What are CalVet’s credit history requirements?
- Does CalVet lend on manufactured homes (mobile homes) on land or in rental parks?
- Can I refinance my current mortgage into a CalVet loan?
- What documentation do I need to get pre-approved for a CalVet loan?
- The base loan limit for CalVet is $566,375. In some high cost counties the loan limit can be as high as $849,000.
- The loan limit for CalVet mobile home loans in rental parks is $175,000.
- CalVet Home Loans are available for up to $849,000 with no down payment if you are eligible for a loan guaranty from the U.S Department of Veterans Affairs (CalVet/VA), or with a down payment of just 3% of the purchase price for the CalVet97 program.
- First-time homebuyer loans have lower purchase price limits in some counties.
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2. What is a rate lock?
Because interest rates on most loan programs change on a daily basis, a lender requires you to lock or commit to an interest rate prior to closing your loan. Rate locks can be for 15, 30, 45 or 60 days. Some loan programs allow you to lock your interest up to 90 days or more before closing your loan.
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3. What is an impound account?
An impound account (or sometimes referred to as an escrow account) is an account setup by a lender to pay the property taxes, homeowners insurance premiums and mortgage insurance premiums (if needed) when they are due. The borrower will pay the property taxes and homeowners insurance each month (prorated over 12 months) instead of paying each item in full when they are due.
Government insured loans such as VA, FHA and CalVet loans require borrowers to have impound accounts with their loans.
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4. Does CalVet have mortgage insurance or a funding fee?
Yes. With the CalVet/VA loan we obtain the guaranty from the U.S. Department of Veterans Affairs. On other CalVet loans we may purchase private mortgage insurance. In all cases a loan funding fee of between 1.25% and 3.30% of the loan amount will be charged. Under certain circumstances the fee may be added to the loan amount.
This is a one-time fee, and will not affect your interest rate or monthly installment unless it is financed in the loan. This fee must be paid in escrow. Since we obtain a loan guaranty, the guaranty fee (or funding fee) is charged in escrow – it may be paid by the buyer or seller.
There is no funding fee if the veteran is disabled (VA disability rated 10% or more). There is no monthly mortgage insurance.
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5. What are the eligibility requirements for a CalVet loan?
Most veterans planning to buy a home in California are eligible — there is no prior residency requirement. Eligible veterans must meet federal rules regarding the use of the CalVet bond funds. CalVet has several bond fund sources for veterans who served during a wartime era or regardless of when they served.
Veterans whose service was during peacetime are eligible, but must meet the requirements for use of Revenue Bonds funds. Peacetime-era veterans must be first-time homebuyers and meet income and purchase price limitations.
Veterans must have received a discharge under honorable conditions, and provide a copy of their DD-214 or release from active duty. If you are currently serving on active duty, you can provide a Statement of Service to verify your qualifying dates and character of service. All veterans who served on active duty a minimum of 90 days (not including active duty for training purposes only), whether during wartime or peacetime periods are eligible.
There are no prior residency rules – a veteran may have entered service from outside California. National Guard or Reservists who have been ordered to active duty, including Active Guard/Reserve (AGR) duty are eligible. This home financing program serves all veterans living in, or planning to live in California.
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6. Can I use my CalVet loan eligibility more than once?
Yes. You may obtain a new CalVet loan each time you decide to change your residence — it may be used again and again. Once the previous loan has been paid off, you may obtain a new loan with the current features, subject to eligibility and financial qualification.
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7. What homeowners insurance protection programs does CalVet offer?
In an effort to ensure that your investment is safe and sound, CalVet provides comprehensive protection for you and your family. No other loan program offers you protection against natural disasters like CalVet.
While thousands of Californians have lost everything in natural disasters like floods and earthquakes, CalVet loan holders have full guaranteed replacement cost coverage for their home, keeping disaster in check. You’ll be fully protected against floods and earthquake damage with your CalVet financed home. CalVet’s deductible is a low $500 on flood claims, and $500 or 5% of the coverable loss (whichever is greater) on earthquake and mudslide claims. Should disaster strike, you’ll be on your way to recovery in days, and at a considerable savings over the costs associated with private insurance policies.
Most loans also include fire and hazard insurance coverage. You will have guaranteed replacement cost coverage on the home, with low premiums and a $250 deductible.
With the CalVet loan you and your spouse also have the option to purchase group life insurance in an amount needed to pay off your CalVet loan. Applicants must be under the age of 62 when their loan is funded and be approved for coverage by the insurance carrier. Coverage will cease when the contract holder reaches age 70.
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8. What are the down payment requirements for a CalVet loan?
Down payment requirements for a CalVet range from zero to 3% down. If you use your VA entitlement you can go zero down with a CalVet/VA loan. If you do not use your VA entitlement, the minimum down payment for the CalVet97 program is 3% of the purchase price.
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9. What are CalVet’s credit history requirements?
CalVet requires that your credit history be good the last year two years. They look for a minimum 620 credit score to qualify and all outstanding collection accounts and/or charge-off accounts are paid in full. Any past bankruptcies, foreclosures and short sales need to be at least two years old to qualify. If you have any questions regarding your specific credit history please give us a call at (800) 734-3772.
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10. Does CalVet lend on manufactured homes (mobile homes) on land or in rental parks?
Yes. You can use the CalVet loan program to purchase a manufactured home on land or in a rental park. If the manufactured home is in a rental park, the maximum loan amount is $175,000 and the minimum down payment requirements are 10-15% depending on the age of the home.
If the home is on land and affixed to a permanent foundation then the CalVet standard requirements apply. Please give us a call at (800) 734-3772 with any questions regarding the manufactured home loan requirements.
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11. Can I refinance my current mortgage into a CalVet loan?
No. CalVet does not offer refinancing at this time. Please check out our VA loans which you can use to refinance your current mortgage.
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12. What documentation do I need to get pre-approved for a CalVet loan?
You will need a copy of your DD-214 (Release from Active Duty) to confirm that you have qualifying service. If you do not have a copy, obtaining one is easier than ever.
Once you have searched your personal records and determine that you no longer have a copy there are several things you can do. In the past veterans were advised to have their DD-214 recorded in the county they went home to after their release. If you did that, contact the county recorder and you should be able to get a copy there. If you used a DD-214 to apply for other benefits, such as educational or medical, that agency may be able to give you a copy.
If neither of these ideas work, the fastest way to obtain a copy is through the National Archives, National Personnel Records Center (NPRC) on their website at http://www.archives.gov/veterans/military-service-records/. They are the records custodian for most discharged and retired members of all branches of service. Expect a two to three week wait to receive your record, but ordering online may speed up the process.
If you are currently serving on active duty you are also eligible after you meet the 90 days service requirement. Obtain a Statement of Service from your Commanding Officer, Adjutant, or Personnel Officer.
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