How do you stop renting and start owning? Well, there are some options that military veterans and active duty personnel should explore, like the Cal Vet home loan program. The Cal Vet Home Loan Program has helped countless California veterans achieve the American Dream of homeownership. The Cal Vet home loan program offers many benefits to borrowers, including below-market interest rates and little or no down payment. Now that eligibility requirements have been expanded, virtually all veterans who want to buy a home in California qualify for a Cal Vet home loan.
Cal Vet home loans are designed to save you money and protect your investment. If you buy a home in a designated target area (TA) with your Cal Vet home loan, you may qualify for even more benefits. Buying a home in a (TA) gives you more flexibility because the first time home buyer requirement does not apply and there are higher selling price limits in all areas and higher income limits in most areas .
The definition of a (TA)
Areas that have been selected by the federal government were identified in the federal census as areas where 70 percent of families have an income that is 80 percent or less than the state median income. Cities, counties, and other government agencies may have specific areas in their jurisdiction that are “targeted,” but only the census tracts identified by the federal government as “targeted” are used for Cal Vet home loans.
To encourage Cal Vet home loan recipients to purchase homes in (TA), home buyers receive certain incentives. Mortgage loans provided through the Cal Vet program for the purchase of homes in specific areas are financed with Qualified State Assigned Mortgage Bonds (QMB). QMBs are tax-exempt private activity bonds.
Benefits of buying a house in a (TA)
About 33 of California’s 58 counties have target areas, but Los Angeles County has nearly half of all target areas in the state. QMB loans generally require you to be a first time home buyer, but that requirement does not apply if you buy a home in a specific area. The maximum allowable income limit is also higher in most specific areas, providing borrowers with greater homeownership opportunities. The limit on the price you can pay for a home is also raised to offer buyers a wider range of available properties.
The purchase price of homes in specific areas cannot exceed 110% of the area median purchase price for the statistical area or county where the property is located. The income limits that applicants must qualify for are issued annually by the U.S. Department of Housing and Urban Development.For example, as of June 25, 2013, the income limit for one or two people who purchase a house in a specific area in Los Angeles County is $ 101,160. Purchase price limits in specific areas in Los Angeles County are $ 823,308 as of the aforementioned date.
QMB loans are only available for single-family residences, including condos and mobile homes located on land owned by the applicant. To determine if the home you would like to buy is in a specific area and qualifies for a QMB loan, contact the US Department of Housing and Urban Development.