How to Get a Cal Vet Loan

By Jerry Anderson

The state of California provides CalVet loans to veterans who choose to buy a home and live in California. Therefore, California is a mortgage lender that qualifies the borrower in the same manner as other lenders. However, all veterans are given extra consideration during the qualification process, and the interest is below market rates. There are no high-risk loans with higher interest rates, since every veteran that qualifies gets the same current rate as others. After taking title at closing of escrow, CalVet uses a Contract of Sale to sell the property to the veteran. A Memorandum Agreement of Sale is recorded, indicating that the borrower holds equitable title to the property, not legal title. Therefore, a judge makes decisions based on what is fair and just about the borrower's property rights, not what is legal. If the borrower makes the final payment or refinances the mortgage, legal title would be transferred to the veteran.

Visit the CalVet Home Loans website (see Resources) to review loan terms, fees, rates and funding source restrictions. For example, loan term is normally for 30 years, a funding fee based on the loan amount is charged, interest rates are below current market and mobile homes must be funded by Qualified Veterans Mortgage Bonds or unrestricted funds. (see Resources)

Meet with staff at your nearest CalVet office to receive assistance in the loan process. You can locate an office at the CalVet Home Loans website. (see Resources)

Select a home to purchase. Work with a real estate agent who can guide you through the CalVet loan process. Go to the California Department of Veterans Affairs website to locate a certified mortgage broker. If you plan to construct your home, the loan would require plans. Minimum requirements for all homes include safe access. (see Resources)

Visit the California Department of Veterans Affairs website and download loan application instructions, application forms, eligibility form and Fannie Mae Form 1003 (Uniform Residential Loan Application). Additional forms may be required, such as a Request for Determination of Eligibility (VA Form 26-1880) to obtain a Certificate of Eligibility. Also, the Designation of Agent and General Release (Form A-3) is required if an agent is acting on your behalf to allow documents to be delivered to the agent.

Download additional application forms for a construction loan if you plan to construct your home.

Download the form for California National Guard or U.S. Military Reserves if you are a current member and lack other qualifying service.

Complete the Uniform Residential Loan Application. This must include a description of the property that you wish to purchase and the requested loan amount. Include qualifying documents, such as discharge papers.

Complete other forms that pertain to your circumstances, such as Contractor's Statement (Form CL-2) and Contractor's Cost Estimate (Form CL-3) for a construction loan.

Mail forms to the CalVet office located in the same area as the home that you plan to purchase if you are not working with a real estate broker. Otherwise, submit these forms to your broker.

Download, complete and submit the Life and Disability Insurance Form when requested by CalVet.

Wait to receive an approval letter that occurs after establishing your eligibility, credit worthiness and financial qualification. In addition, the home appraisal has been established.

Sign the CalVal contract and complete any outstanding purchase requirements, such as submitting a termite report and a roof inspection report.

Receive the keys to your home after CalVet issues funds to close the loan.

Make your first loan payment that is due on the first day of the month that occurs 30 days after closing. For example, if closing occurs on April 2, this payment would be due on June 1.

All loans are 30-year term. However, you may make additional principal payments to reduce the loan term.

You will submit a non-refundable application fee that is $50 as of August 2005.

An appraisal fee is required. The amount depends on the type of property and is a maximum of $450 as of August 2005.

You will pay a loan origination fee.

A funding fee is charged for loans with less than a 20 percent down payment.

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