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Making it in San Diego: VA loans to have no limits in 2020

Posted at 11:04 AM, Dec 26, 2019
and last updated 2019-12-26 23:07:18-05

SAN DIEGO (KGTV) - The new year will bring a new opportunity for active duty military, reservists and veterans to buy a more expensive home with no money down.

On Jan. 1, the government will lift caps on zero percent down V.A. home loans. It's part of the Blue Water Navy Vietnam Veterans Act of 2019, which Congress passed and the President signed in June.

Currently, qualified borrowers in San Diego can buy a home valued at up to $690,000 with 0 percent down. For any amount beyond that, the borrower would have to come up with 25 percent of the difference in cash. So under current rules, if a borrower wanted to buy a home for $790,000 - he or she would need to pay $25,000 in cash to qualify. On Jan. 1, that requirement will go away.

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Mark Goldman, a loan officer at C-2 Financial, said the more buying power is a good thing, noting that the V.A. has excellent underwriting standards.

"The V.A. knows how to underwrite 100 percent financing," he said. "It has been doing it for a long time, it knows what to look for to make sure people can pay it back."

The V.A. funding fee will increase from to 2.15 percent to 2.3 percent for first time-loans. However, that fee is rolled into the loan.

"The bottom line is you've got to show the financial means to qualify in any loan. The V.A. loan is the best loan out there," said said Andre Hobbs, a San Diego real estate agent and a director at the Veterans Association of Real Estate Professionals.

Hobbs noted there are fee waivers for those with disability benefits, and that V.A. loans do not require private mortgage insurance.

RELATED: Making It in San Diego: Millennial veteran home purchases surging

The median price for a home in San Diego County is just under $600,000.