Buying property can be a daunting task for anyone, including veterans and active service members. Managing mortgages, paperwork, appraisals, and inspections can make the process even more challenging. Fortunately, you don’t have to navigate the real estate market alone.
If you’re a veteran buying your first home, there are some things you need to know before house hunting. This guide will help you explore loan and mortgage options, and provide tips to make your home buying process easier and more efficient.
Table of contents
- VA loans and mortgage options for veterans
- State benefits for veterans in Simi Valley, CA
- Why it’s good to live in Simi Valley, CA
- Other assistance programs for veterans
- Guides and tips for veteran and military homebuyers
- Importance of a VA-savvy real estate agent
- Get your dream home from a former Marine-turned-broker
VA Loans and mortgage options for veterans
The US Department of Veterans Affairs (VA) was established in 1944 by the government to allow veterans to buy homes without the need for down payments or high credit scores. These loans are issued by private lenders and are guaranteed by the VA to veterans, service members, and eligible military spouses. Here is a quick rundown of the types of VA loans, as well as the advantages and disadvantages of applying for one:
TYPES OF VA LOANS
- Purchase loan
VA loans can be used by veterans and service members to purchase new or existing homes with no down payment. These loans also allow veterans to purchase single-family homes, condominiums, manufactured homes, multi-unit properties, duplexes, and new construction homes.
- Interest Rate Reduction Refinance Loan (IRRRL)
The IRRRL is one of the two refinancing options provided by the VA loan program. In some cases, this program may not even require credit underwriting, income verification, or appraisals.
- Cash-out refinancing
The VA cash-out refinance program is open to veterans with and without current VA loans. This program allows qualified homeowners to refinance their mortgage and receive cash from their home’s equity.
- Energy-efficient mortgage
The VA energy-efficient mortgage supports veterans who want to make energy-efficient improvements like thermal windows, heat pumps, and solar heating in their homes, whether it be part of a home purchase or a refinance.
- Native American direct loan (NADL) Program
This program allows Native American veterans to purchase, construct, or improve their homes built on Federal Trust Land. This may also allow them to reduce the interest rate on a VA loan.
PROS AND CONS OF A VA LOAN
There are both advantages and disadvantages to getting a VA loan. To make a balanced, well-informed decision, it’s good to look at the benefits and risks. If you’re still on the fence about getting a VA loan, here are some of the benefits of applying for a VA loan:
- You can enjoy lower upfront costs of buying a home because VA loans don’t require a down payment.
- VA mortgages require a funding fee, but you have the option to pay this upfront or include it in the loan.
- You don’t need private mortgage insurance (PMI) for VA loans.
- It’s easy to refinance your existing VA loan.
While there are many benefits of getting a VA loan, there are also downsides to it. Here are some of the potential risks of applying for a VA loan:
- VA loans aren’t always the cheapest options, as they typically come with funding fees. It’s best to explore your options and find the best mortgage rates.
- Veterans are often taken advantage of when using their VA loan benefits. Look out for extra upfront origination fees that can increase the cost of your mortgage.
- Some sellers may turn down offers with VA mortgages, thinking that the entire process takes a longer time.
State benefits for veterans in Simi Valley, CA
If you’re a veteran and you choose to live in Simi Valley, the state of California has many programs and resources for veterans as well. Here are some of the state benefits veterans can enjoy in the Golden State:
- Veterans homes
Veterans aged 55 and above who were discharged from active military service under honorable conditions are eligible to apply for admission to California’s veterans homes. The age requirement is waived for disabled or homeless veterans who need long-term care. As of writing, there are eight veterans homes in California located in the following counties: Barstow, Chula Vista, Fresno, Lancaster, Redding, West Los Angeles, Yountville, and Ventura (where Simi Valley is located).
- Farm and home loans
California offers honorably discharged veterans farm, home, mobile home, construction, home improvement, and rehabilitation loans. These loans have competitive rates and are quick processing as well.
- Military family relief fund
The California Military Family Relief Fund (CMFRF) provides short-term financial grants to members of the California National Guard and the families impacted by deployment or mobilization.
- Veterans employment preference
Honorably discharged veterans, their spouses, and surviving spouses of 100% disabled veterans are ranked at the top of the eligibility list when they pass for state employment.
- Commercial driver’s license
Service members and veterans who served in a military position that requires them to drive a motor vehicle like those on public roads and highways may be exempt from the road test or written section of the licensing exam.
- College tuition fee waiver
Dependents of veterans in California may enjoy the waiving of mandatory system-wide tuition and fees at any California Community College, State University, or campus.
- Fishing and hunting licenses
Veterans with 50% or greater service-connected disability may be eligible for decreased annual fees for fishing and hunting licenses. This applies to veterans outside the state of California as well.
- State parks and recreation passes
Any former POW, Medal of Honor recipient, or honorably discharged war veterans residing in California with 50% or more service-connected disability may get a free pass for all California state parks. Convenience fees may be charged if you’re making an online reservation.
- California state veteran cemeteries
Veterans are eligible for complete, professional burial services in the California Central Coast Veterans Cemetery in Seaside and Northern California Veterans Cemetery for free.
Why it’s good to live in Simi Valley, CA
Veterans will be happy to note that Simi Valley has a laid-back, suburban feel despite its proximity to some of the busiest areas in the United States. It’s the third largest city in Ventura County and lies between Thousand Oaks and Moorpark.
The greater Los Angeles area has plenty of wonderful cities to live in, but Simi Valley’s charm makes it stand out. In fact, Simi Valley is considered as one of the most attractive places to live in California and was included in the happiest places to live in the United States.
Here are some of the reasons Simi Valley is ideal for veterans:
- Simi Valley is accessible
Simi Valley is located near the San Fernando Valley and is just 37 miles northwest of downtown Los Angeles. There are several highways and interstates running through or near the city, making daily commutes easier if you need to work in the office or on site. Highway 118 runs across the city and connects with state highways 23 to the west and 101 to the south. Interstates 5,405, and 210 are also nearby.
The Los Angeles International Airport is only 42 miles away from Simi Valley. Meanwhile, Burbank Airport and Camarillo Airport are just 25 miles away. There are also many public transport options in the area, including the Amtrak and Metrolink rail service. The city also has taxis and a bus system. Port facilities are located in Port Hueneme, which is 34 miles away from the city.
- Simi Valley honors its veterans
Of Simi Valley’s 126,356 residents (median age: 40.6 years old), there are approximately 5,705 veterans as of 2019. The community knows how to value their presence with tributes and programs. In 2018, Simi Valley put up 336 banners with the names of men and women who served. In 2021, the Ventura County Transportation Commission gave free bus rides during Veterans Day.
In 2022, Ventura County announced that they will be launching two major projects to assist veterans and their families.
- The first project is the 122-unit affordable housing project for veterans and their families, which will be completed in December 2023.
- The other project will be headed by the Gold Coast Veterans Foundation’s Veterans Village. This project aims to provide transitional shelter, counseling, and therapy for veterans.
- Simi Valley has a lively economy
Simi Valley has many shopping centers, restaurants, and commercial establishments that contribute to the city’s lively economy. In fact, the median household income is $99,151, while the per capita income is $42,678, both in 2019 dollars.
- Simi Valley is affordable compared to other CA markets
Simi Valley is known for its affordable rent and cost of living. According to the US Census in 2019, the median value of owner-occupied homes in the area is $584,900. The rate of owner-occupied housing in the area is 72.2%. The median gross rent in the area is $2,023.
- Simi Valley has good schools and amenities
There are plenty of schools and educational institutions in Simi Valley. Santa Susana High School and Thousand Oaks High School are two of the best public schools in the area. Meanwhile, Sierra Canyon School, Chaminade College Preparatory, and Oaks Christian School are some of the top private schools near the city. As for healthcare, the city has one major hospital, the Adventist Health Simi Valley Hospital. There are also other outpatient centers and medical facilities.
- Simi Valley has many attractions
Simi Valley also boasts of many open spaces, golf courses, parks, shopping and nightlife, and attractions. The most notable of which is the Ronald Reagan Presidential Library and Museum and the Military History Museum. The city has several parks, including Rancho Simi Community Park and Arroyostow Park. If you want to explore Simi Valley’s natural wonders, there’s the Rex Frankel Wilderness Preserve and the Rocky Pointe Natural Park.
Homes for sale in Simi Valley, CA
If you’re planning on settling down in Simi Valley, there are plenty of properties and homes available in the area. here are some quick facts about homes for sale in Simi Valley:
- Price range
Properties in Simi Valley can cost anywhere from $400,000 to $7 million and up. This price range depends on a variety of factors, including total square footage, number of bedrooms, bathrooms, garages, and amenities.
- Typical features
Homes for sale in Simi Valley, CA have a wide range of features and amenities. Single-family houses feature 1 to 5 five bedrooms, but there are plenty of condo units available as well. Many properties will have breathtaking mountain and valley views, patios and balconies, as well as state-of-the-art kitchens. Owners of condos and houses in gated communities typically have access to pools and gyms in the building or within the community.
High-end properties boast luxury amenities, including covered patios, above-ground spas, built-in BBQ areas, multiple-car garages, pools, guest apartments, and spas.
Other assistance programs for veterans
If you need additional resources to achieve your real estate goals in Simi Valley, CA, there are various other programs available to help veterans buy and remodel their homes. Here are some of the housing grants, loans, and assistance programs offered by the US government to veterans:
- Specially adapted housing (SAH) for veterans with disabilities
To qualify for this loan, you need to own the home or own it in the future. You also need to have a qualifying service-connected disability. The grant can give you up to $101,754 for the 2022 fiscal year for the purchase, construction, or remodeling of your home to accommodate your disability.
- Special housing adaptation (SHA) grant
To qualify for this loan, you or a family member must own the home or own it in the future. You also need to have a qualifying service-connected disability. You can get a total of $20,387 for the fiscal year 2022 for the purchase, construction, or remodeling of your home.
- Temporary residence adaptation (TRA) grant
To qualify for the temporary residence adaptation grant, you need to be eligible for either the SAH or the SHA grants. You also should be temporarily residing in a family member’s home that needs to be remodeled to meet your needs. You don’t need to own the house.
Guides and tips for veterans and military homebuyers
Purchasing a home can be daunting, especially if you’re a first-time homebuyer. Should you hire a real estate agent? What documents do you need to prepare for closing? We’ve compiled these guides and checklists to help you know more about the typical home buying process for active-duty service members and veterans.
HOME BUYING AND VA LOAN APPLICATION CHECKLIST
Whether you’re a veteran looking for a new home to settle down in or you’re a service member or a military spouse who’s planning your next move, this checklist can help guide you through the process of applying for a VA loan and buying a new home.
- Find a VA-savvy real estate agent
For many active service members and their spouses, looking for a house on such short notice can be a really difficult task. It’s important to have an expert agent who understands your needs and advocates for you through the entire home buying process. We’ll go into more detail about this in the next section.
- Save for closing costs and other fees
If you’re applying for a VA loan, you don’t need to secure a down payment first. However, you may still need to prepare a certain amount for closing costs and fees.
- Check your credit score
Applying for VA loans can give you more flexibility when it comes to credit scores. But it’s also important to know where you stand because many mortgage prefer to work with individuals with credit scores of 620 and above. You can check your current score on your credit card monthly statement or you can use a free credit score service, such as this one from Experian.
- Confirm your VA loan eligibility
The certificate of eligibility allows you to purchase a home with a VA loan. To qualify, you’ll need to meet the VA’s minimum service requirements. Note that this requirement may be waived if you were discharged due to a service-connected disability.
- Discuss the funding fee
You are required to pay the VA funding fee unless you qualify for the exemptions. Discuss the funding fee with your agent and tell them if you’d like to pay it upfront or have it built into the loan amount.
- Gather your paperwork and get pre-approved
The pre-approval process lets you know how much you can borrow. After this, you can start looking for homes. Prepare your proof of income, bank and other loan statements, and your tax returns. Documents like W-2s and 1099s may also be required. If you’re applying for a VA loan, you’ll also need your Certificate of Eligibility.
- Find a home and get an appraisal
- Secure your loan
Once you’ve found the right home for you and your family and the price is finalized, you can secure your loan and rate.
- Plan your move
Planning your move may be the next most difficult task for you and your family. It’s important to find a moving service that offers a good discount for veterans.
- Proceed with closing
On closing day, there may be one last inspection before you can sign the documents. After that, you and your agent and the representatives from your lender and title company can review all the documents, sign the contract, and get the keys to your new house.
You can start looking for a home once you know how much of a loan you’re pre-approved for. Appraisals, inspections, and negotiations are necessary to get your dream home for the right price.
TIPS ON BUYING A NEW HOME
Veterans who are planning to buy homes for the first time may find it difficult to know when to start looking for a home or what costs to consider when applying for a loan. Fortunately, we have some tips to help you prepare for this huge milestone in your life:
- Know when to buy
Real estate prices tend to fluctuate throughout the year, with the hottest buying season typically running from April to July. The right time to buy a home will depend on your situation, preferences, and the particular area you’re interested in. It’s important to devise a strategy with your real estate agent.
- Consider all upfront costs
While VA loans may decrease the costs of buying a new home and help you avoid down payments, there are other costs you will need to prepare for at closing. It’s important to understand and factor in fees, such as agent commissions, title fees, loan origination fees, insurance premiums, upfront interest and taxes, and other costs when buying a home. Some of these fees can be paid for by the seller of the home, but you may need to bring this up during negotiations.
- Ask questions
If you’re a veteran, you’ll need to consider where you want to live before buying a home or even deciding to take a loan. How long do you have to commute to work? Is the place safe and ideal for persons with disabilities? What’s the local school district like? Are there healthcare services nearby? It’s important to ask the realtor or the seller these questions so you can make an informed and balanced decision.
To make sure that the buying and selling process goes smoothly, consult a real estate agent you can trust. If you’re an active-duty service member or a veteran looking to buy a new home, you’ll need a knowledgeable VA-savvy real estate agent. Here are some of the benefits of hiring such a real estate agent:
- Understands the unique needs of service members and veterans
A real estate agent who regularly works with service members and veterans can consider their clients’ specific situations and factor those things when looking for the right home. Also, VA-savvy real estate agents can help disabled veterans find housing grants or homes with adaptive renovations so they can live independently in a stress-free environment. Some agents are also able to work with clients with PTSD and acknowledge their needs, which other agents might not understand.
- Helps you navigate the real estate market
While technologies like apps and the internet can make your house hunt easier, dealing with the real estate market and applying for loans and grants on your own can be challenging. A real estate agent can help you with these processes, giving you a sense of ease.
- Adjusts to your timeline
Active-duty service members are typically required to move often at short notice. Agents who regularly work with service members and veterans have experience buying and selling properties on tight timelines. They can also act as the client’s eyes and ears during the buying process, as sometimes service members or their families don’t have enough time to inspect the house in person.
- Helps you find a knowledgeable and reliable lender
A VA-savvy real estate agent understands the entire VA loan application process and can help their clients prepare all the necessary documentation. Your agent should be able to help you find a good lender and guide you through the entire VA loan application process.
- Explains the VA appraisal process
As previously mentioned, a house must meet a set of minimum property requirements in order to qualify for a VA loan. A VA specialist real estate agent has a keen eye for issues that might need to be addressed before a VA loan closing. They can also tell you up-front if the property will not pass the appraisal.
- Ensures that a condo or townhome gets approved
Agents who don’t have experience working with service members and veterans may be unaware that condo communities and townhomes need VA approval. They may also not know how to look for approved properties and advocate for your needs properly. While the Department of Veterans Affairs has a list of approved properties on their website, it’s better to work with an agent who knows VA-approved condo communities.
Get your dream home from a former Marine-turned-broker
Romeo Echo Real Estate is a veteran-owned and operated company that has been working with active military personnel, veterans, and first responders for over 10 years. We believe in providing hands-on support to the men and women currently serving or have served in the US Military. We want to give our servicemen and women the peace of mind that they deserve when it comes to real estate and help them obtain success and security in life.
If you’re a veteran looking to buy a new home, get in touch with me, Adam Martinez, and my team at Romeo Echo Real Estate by calling 805.404.3369 or by sending an e-mail to adam(at)romeoechousa(dotted)com. You can also send your queries to info(at)romeoechousa(dotted)com.