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What is the Difference Between a CalVet Loan and a VA Loan?

There are many differences between VA loans and CalVet loans. Both are designed to help veterans get back on their feet. However, some differences do exist. Those differences include interest rates, eligibility requirements, and lag time. In this article, we’ll take a look at each. The differences between VA and CalVet loans are essential to know if you want to take advantage of one of these programs.

Interest rates on Cal Vet loans are higher than VA loans

There are a few reasons why interest rates on Cal Vet loans are higher than VA home loans. The first is that they are based on a higher “coupon rate,” a measure of the interest rates that investors will pay on a bond issued by a government agency. Moreover, Cal Vet loans are typically due sooner. Cal Vet rates are higher than VA loans when the interest rate market is weak.

The second reason the interest rates on Cal Vet loans are higher is that they are state-backed, whereas VA loans are federally guaranteed, which means that banks guarantee them. Similarly, VA loan limits are higher in certain counties. However, both types of loans offer veterans and active military members a range of benefits. Because of the differences between the two, a Cal Vet loan can benefit California veterans.


In the past three years, those who served in the military qualify for 100% financing through the CalVet home loan program. There are specific guidelines for qualifying for both loans. Veterans may apply as many times as they like for the loan, but they may only have one active loan at a time. Veteran applicants can use up to three times per year. The origination cost for the loan is 1% of the loan balance.

The CalVet loan credit requirements are softer than for the VA loan. This is because the underwriters review applications by hand. As such, CalVet loan underwriters have been instructed to be more lenient in the case of derogatory credit. The benefits of applying for a CalVet loan are many. Moreover, you can receive a lower interest rate and origination fee than you would through other lenders. Additionally, you can opt for low deductible insurance plans with your CalVet loan. VA loans are in high demand, and now is the time to take advantage of them, particularly California VA loans – is one of them.

Lag time

The lag time between a CalVet loan and a VA loan can be explained by the difference in how each organization gets the funds to lend. A traditional VA lender borrows funds from a separate source than CalVet. The difference between the two organizations also extends to the interest rate. In an environment where interest rates have declined, CalVet rates can be higher than the typical VA loan rate.

The differences between a VA and Cal Vet loan can be easily explained regarding the interest rate and the time to close the loan. The seller pays the closing costs in a VA loan, while the government finances a CalVet loan. In a CalVet loan, the seller pays the closing costs and the appraisal, but the VA requires the home buyer to pay for escrow and title fees.


The income difference between a VA loan and a CalVet loan may be why CalVets are more eligible for VA loans. In the past, the CalVet loan limit was $521,250, while the VA conforming loan limit was $417,000 in California. However, the state’s high-cost communities mean that the VA loan limit is lower in many counties. Nevertheless, the VA loan does offer more significant benefits, and the CalVet loan has less stringent requirements.

The income difference between a VA loan and a Cal Vet loan is often minimal. The VA loan doesn’t have a maximum debt-to-income ratio, whereas a conventional lender may cap your debt-to-income ratio at 43% or less. If you’re applying for a VA loan, you may need to provide proof of your ability to pay, as your monthly debt to income ratio can exceed 41% of your gross income. You can’t co-sign for a VA loan if you’re not married to your co-borrower. If you’re married to your co-borrower, you’ll have to prove that you are legally owed to your spouse. In many states, same-gender marriage and Oregon Registered Domestic Partner are legal.

Debt ratios

In California, there are two types of home loans available for veterans: the CalVet Home Loan and the VA loan. Both loans are open to veterans who served in the military, and neither one has stricter qualification criteria than the other. A CalVet loan requires a zero percent down payment, while a VA loan typically requires a minimum of 3%. CalVet loans are easier to qualify for because you do not have to live in California to get them.

The debt ratios between a VA loan and a Cal Vet loan are very different. While both have the exact requirements, the CalVet loan’s guidelines are more strict. For example, the CalVet loan underwriting follows a traditional debt ratio of 41 percent. But because the VA loan guidelines are conservative and require an investor to “reel in” the debt ratios, the two programs differ in the amount of derogatory credit that can be accepted.