By Noel Yap, VA Home Loan Centers
East County San Diego is home to a beautiful landscape that makes up most of the landmass for San Diego County. Most of the east county is rural, with several communities located in backcountry areas known as the Mountain Empire.
The eastern part of San Diego County is perfect for people living in nature and taking part in outside activities like hiking, mountain biking, fishing, camping, all within a beautiful mountainous wilderness. The county is also home to fun Native American Casinos, which offer a thrilling experience for people looking to enjoy some Vegas-style fun.
Living in the east county is different from what people living along the coast might experience with a more varied landscape, vast wildlife, and a more seasonal climate. People interested in buying a home in the east county have to deal with a median home price of $628,519, which might seem to be a little too high for many of them.
Thankfully, homes in the county can be purchased with Government-guaranteed home loans, reducing and even removing homeownership’s initial costs. These loans are guaranteed by the Federal Housing Administration (FHA), the Department of Veteran Affairs (VA), and/or the U.S. Department of Agriculture (USDA).
Federal Housing Administration Home Loans
Loans administered by the FHA offer some of the most lenient eligibility requirements out of any home loans available, making them the perfect loan for first-time borrowers. This is because FHA home loans require that the applicant have a credit score of at least 580, although some lenders accept even lower credit scores. They also require a low down payment of at least 3.5%, significantly lower than the conventional loan requirement of 20%.
Additionally, FHA loans include some great benefits, including a lower monthly mortgage payment amount and lower closing costs. These benefits significantly reduce the costs associated with homeownership to an affordable amount.
The loan is also more accepting of applicants who have gone through bankruptcies in the past. Chapter 7 bankruptcy recipients can qualify for a loan, all they need to do is have a two-year gap from their discharge date. Applicants with a Chapter 13 bankruptcy can also be eligible for the home loan as long as they have one year of making payments on time and have court approval.
People have to keep in mind that FHA loans are still required to adhere to loan limits, which are different depending on the county in which they are located. FHA loans for San Diego County are at $701,500 for a single-family house, $898,050 for a duplex, $1,085,550 for a triplex, and $1,349,050 for a fourplex.
Department of Veteran Affairs Home Loans
San Diego is a big military town with several military bases and many Active Duty Service Members and Veterans. Therefore, it is the perfect place for VA home loans, exclusively for Veterans, Active Duty Service Members, and eligible spouses. Considered by many real estate experts as one of the best government loans available, these loans have helped more than 22 million Veterans purchase the home of their dreams.
This is due in no small part because VA loans offer several benefits, including lower monthly mortgage payments, no-prepayment penalties, and lower interest rates. In addition, VA loans also have a down payment requirement of zero. Meaning that a borrower could purchase a property without paying anything at the start.
A newer benefit from VA loans is not having to adhere to VA loan limits, which as of January 1st, 2020, have been removed. Now places like VA Home Loan Centers offer loans of up to $5 million for no money down for applicants who can afford it.
Loan limits were not removed for VA loan borrowers who have more than one active loan. They are still required to adhere to loan limits set up by the VA, which as of January 1st, 2020, has increased in San Diego County to $701,500.
U.S. Department of Agriculture Home Loans
USDA loans are for borrowers whose income is either at or below the income limit for the county. A credit score of at least 640 is also required, although this is flexible, and lenders will be more willing to work with the applicant on their credit score.
Additionally, these loans can only be used to purchase a modest single-family home, with no in-ground pool. The property also cannot be used for any business purposes. It must also be located within a rural development area.
Once a borrower’s eligibility is determined, they can take advantage of the loan’s benefits, including a no down payment requirement, lower closing costs, and competitive interest rates. However, this loan does have loan limits. In San Diego County, that loan limit is $615,000, a higher loan limit than in most USDA-eligible counties.
If you’ve ever wondered if you could live in East County San Diego but wondered how much it would cost upfront, then worry no longer. Government loans can reduce or eliminate those costs altogether, making your purchase of a home in rural southern California a more affordable endeavor.
Phil Georgiades is the CLS for FedHome Loan Centers, a brokerage specializing in first-time buyer home loans. He has been working in real estate for more than 22 years. If you would like to learn more about home loans available to you, or if you want to apply for a home loan, click here: https://www.fedhomeloan.org/apply-for-a-mortgage or call (877) 432-5626.