If you are relocating to Fort Bragg, Camp Lejeune or are a Veteran buying a home is a VA loan your best option? Sure it’s a great option offering 100% financing, but other options may be as good if not better dependng on your circumstances. If you are moving to Fort Bragg or Camp Lejeune most of the areas surrounding those bases also are USDA Guaranteed Rural Housing eligible as well.
So what is USDA Guaranteed Rural Housing you might ask? USDA Guaranteed Rural Housing is similar to VA in that it has insurance backing from a federal agency, just in this case it’s the Department of Agriculture instead of the Veteran’s Administration. It also offers 100% financing just like VA and has no monthly mortgage insurance.
So why would you consider USDA instead of VA? Both the USDA and VA backed mortgages require an Upfront Funding Fee, but have no monthly mortgage insurance. VA’s Upfront Funding Fee is 2.15% of the loan amount for first time use and 3.3% for successive loans. USDA’s Upfront Funding Fee is 2% for all loans. Which leads to my opinion that you should consider using USDA if you fall within the income guidelines of the area and are looking for a loan above 80% with a government agency insurance backing it. You save a small amount (0.15%) on the initial transaction but more importantly you save your first time VA funding fee for a later usage when you may be sent to a location without USDA eligibility or your income may fall outside of the USDA guidelines. The real savings though will be from not having to use a 3.3% Upfront Funding Fee on a successive purchase when you are likely going to be buying a more expensive home.
The downside of this strategy is that the VA loan has an assumability feature that the USDA loan does not. In this low-interest rate environment that assumability may make the sale of this home easier in the future. If you want to discuss these strategies further you can contact me via email or phone listed in the linked site below.
*This is not an offer to lend. 
Obama Refinance Plan For San Jose Homeowners AnnouncedHome Affordable Refinance Program Update Harp 2 Bay Area San Francisco California March 2012 Guidelines for Purchasing a 3 to 4 Unit Property with FHA Financing in Alameda, CA8 Year Fixed to 30 Year Fixed. You Can Choose Your Loan Term In San Jose
