Bay Area VA Loans in 2020: What Borrowers Need to Know

The Bay Area has a sizeable military population, many of whom have relocated from military bases in Southern California. As a result, there are quite a few people who could benefit from using a VA loan to buy a home in the Bay Area.

On this page, you’ll find a wealth of information relating to Bay Area VA loans, fully updated in response to the 2020 COVID-19 situation.

Bay Area VA Loan Overview

VA loans are arguably the best mortgage financing option for eligible borrowers. The Department of Veterans Affairs home loan program is open to most military members and veterans, including spouses in some cases.

When you consider the advantages of using a VA loan in the Bay Area, it’s easy to understand why they’re so popular.

The benefits of this program include:

1. No down payment. Eligible borrowers who use a VA loan to buy a home in the San Francisco Bay Area can finance up to 100% of the purchase price, in many cases. That means you might not have to make a down payment at all. And that’s a pretty big deal in a pricey real estate market like ours.
2. No mortgage insurance. Normally, home buyers who put down little or no money upfront have to pay for mortgage insurance. This increases the size of the monthly payments. But that’s not the case with Bay Area VA loans. This unique program allows you to buy a home with no money down and no mortgage insurance.
3. Flexible credit requirements. VA loans are a type of government-backed mortgage loan. They are partially guaranteed by the federal government, via the U.S. Department of Veterans Affairs. As a result of this government backing, there’s less risk for the mortgage lenders who issue these loans. So the credit requirements for borrowers can be a bit more relaxed.
4. Low interest rates. As it states on the Department of Veterans Affairs website, VA loans typically have the “lowest average fixed interest rate on the market.”

Program Changes for 2020: No More Loan Limits

In the past, home buyers who wanted to use a VA loan in the San Francisco Bay Area were without making a down payment were limited to a certain mortgage size. These “loan limits” were based on the ones established by the Federal Housing Finance Agency for conventional or regular home loans.

If you wanted to borrow more than the limit for your county, you had to make a down payment for a certain percentage of the difference.

But that requirement went away starting in January 2020 – for most borrowers, at least. If you’ve never used a VA loan before, or if you’ve used one but paid off the mortgage entirely, there is no longer a government-imposed loan limit. It’s up to the mortgage lender to determine how much you can borrow.

This is a big deal for borrowers nationwide, but especially in the San Francisco Bay Area. VA loans are even more attractive now, with the removal of these limits. After all, the Bay Area is an expensive real estate market. So this change could be a boon for many home buyers in 2020 and beyond.

As it states on the Department of Veterans Affairs website:

“In previous years, Veterans who wanted to purchase above their county loan limit needed to make a down payment for what’s otherwise a $0 down program. Removing these limits helps Veterans and military families maximize their budget and their benefit, especially those stationed or living in more expensive housing markets.”

A Great Mortgage Option for a Pricey Housing Market

According to a September 2020 report from the California Association of Realtors (C.A.R.), home prices across the Bay Area are still climbing in 2020. That might come as a surprise, given the broader economic effects of the COVID-19 pandemic. But it’s true.

The above-mentioned C.A.R. report showed that the median home price for the San Francisco Bay Area rose by 18.7% from August 2019 to August 2020. That was the largest year-over-year increase of any region in California.

In terms of affordability, Bay Area VA home loans can be a real problem-solver for home buyers. In a pricey real estate market, you want to do everything you can to reduce your upfront purchasing costs. VA loans can help you accomplish this by reducing or eliminating the need for a down payment.

How the Mortgage Process Has Changed in 2020

Given the ongoing COVID-19 pandemic and resulting economic restrictions, you wonder how someone could apply for a VA loan in the Bay Area. After all, there’s a lot of paperwork to sign and submit. How do you handle that process during a time of social distancing?

The answer can be summed up in a single word – digital.

The mortgage industry has adapted to the ongoing health crisis by implementing a digital workflow that eliminates the need for interpersonal contact. The same is true for other steps in the real estate transaction, including purchase agreements and related home-buying documents.

Related: VA loans still going during COVID-19

Additionally, home buyers should know that real estate, mortgage and closing companies are considered essential business in the Bay Area and statewide. So you can still apply for a loan and purchase a home in the Bay Area, despite the COVID-19 situation.

Bridgepoint Funding Specializes in Bay Area VA Loans

Do you have a question about using a VA loan in the Bay Area? We’re here to help. Our company has been meeting the needs of military and veteran home buyers in the region for going on 20 years.

We specialize in the VA program and are very passionate about it. Our knowledgeable team can answer any questions you have about Bay Area VA loans.

We could also pre-approve you for a mortgage, so you’ll know how much you are capable of borrowing. This can be a big help when it comes to house hunting, making an offer, etc.

But it all starts with a phone call or an email. Please contact us today, so we can assist you on your path to homeownership!