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

what is a calvet loan

Repayment terms for CalVet mortgages normally last 30 years.

The U.S. Department of Veterans Affairs has for decades guaranteed mortgage loans on behalf of eligible military veterans, and California offers a mortgage loan program of its own to assist eligible military veterans. California Department of Veterans Affairs CalVet mortgage loans and VA mortgage loans are similar in many respects, and both aim to help military veterans purchase homes. However, there are several differences.

CalVet Eligibility Requirements

Only military veterans and current active duty military personnel living in California are eligible for a CalVet mortgage loan. VA-guaranteed mortgage loans are available nationwide to all eligible military veterans, including in California. Eligibility requirements for CalVet home loans are a little broader than you'll find when looking at a VA mortgage loan. Changes to California's Military & Veterans Code mean that most veterans, excepting those with less-than-honorable or punative discharges, are eligible for CalVet home loans.

CalVet Versus VA Mortgages

The biggest difference between CalVet and VA

mortgages is that CalVet mortgages are procured using contracts of sale. Basically, CalVet purchases a qualified military veteran's desired property and then sells it to him using a contract of sale, sometimes known as a land contract. The CalVet program actually holds legal title to the home bought with a CalVet mortgage, while the military veteran holds equitable title. Military veterans using VA mortgages always receive immediate full legal title to and ownership of their properties.

Benefits of CalVet Mortgages

Equitable title in a CalVet-procured home still gives you many ownership rights, including to property tax and mortgage interest deductions. Because CalVet holds legal title to the home you bought using its mortgage, it can obtain an inexpensive group rate for the homeowners insurance you'll carry. CalVet allows veterans to finance the funding fee charged for their loans and also offers 100 percent, no-down-payment financing. CalVet's maximum loan amount is $521,250, lower than VA financing available in some California counties, including San Francisco.

CalVet Affect on VA Eligibility

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