Cal-Vet

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Current Loan Terms, Fees, & Rates

2 This fee will be waived for veterans obtaining a VA guaranteed loan who also have a disability rating of 10% or higher.

Cal-Vet / VA  -  This program is targeted toward veterans and active duty personnel who want to minimize the amount of cash they need to complete their purchase.  A Certificate of Eligibility from the United States Department of Veterans Affairs for the maximum VA loan guaranty based on the purchase price of the property is required.

Cal-Vet 2000/97 -  This program is for veterans and active duty personnel who do not qualify for the VA guaranty, or need a loan amount in excess of $203,000 (up to the $250,000 maximum).

Cal-Vet 80/20  - This loan is for veterans and active duty personnel who want to make a down payment of 20% or more.  Because there are fewer processing requirements these loans generally take less time to process and fund.

CAL-VET LOAN FUNDING SOURCES (CDVA FORM L-10)

Cal-Vet loans are funded through the sales of tax-exempt bonds.  From the program's beginning in 1921 until 1980, only general obligation bonds were sold to support the program.  General obligation bonds are backed by the full faith and credit of the State of California and must be authorized by a vote of the people at a general, statewide election.  All general obligation bonds sold to support the Cal-Vet loan program are repaid by Cal-Vet loan holders through the payment of principal and interest on their loans. 

Even though the Cal-Vet program has been totally self-supporting and no taxpayer funds have been used to repay its bonds, there are state and federal limitations on the amounts of general obligation bonds which may be sold for the program.  Because demand for Cal-Vet loans was exceeding the ability to fund with general obligation bonds, legislation was passed which enabled Cal-Vet to sell revenue bonds to supplement general obligation bonds.  The first Cal-Vet revenue bonds were sold in 1980.  These bonds are also repaid by Cal-Vet loan holders.

Federal laws and regulations resulting from the Mortgage Subsidy Bond Tax Act of 1980, the Deficit Reduction Act of 1984, the Tax Reform Act of 1986, and subsequent amendments, have affected the ways in which all Cal-Vet bond funds may be used.  The following paragraphs explain how general obligation bond funds and revenue bond funds may be used to make Cal-Vet loans.

Qualified Veterans Mortgage Bond Program (General Obligation Bonds)

Under federal law, general obligation veterans bonds may be used to fund loans only to veterans who served on active duty prior to January 1, 1977, and who have been released from active duty for less than thirty years.  Under state law, set forth in the California Military and Veterans Code, the veteran must have served during a qualifying war period or received an armed forces expeditionary medal or campaign medal awarded by the federal government for the period served.  Although  unremarried spouses of veterans may qualify for Cal-Vet loans under state laws, federal laws prohibit them from being funded with general obligation bond proceeds.

General obligation bond funds may be used to purchase homes (which include condominiums and planned unit developments), farms, mobile homes on land owned by the applicant and mobile homes in mobile home parks.  There are no purchase price restrictions on the properties which can be purchased with general obligation bond funds, nor are there income limitations on the veteran borrower.

Qualified Mortgage Bond Program (Revenue Bonds)

If an applicant is an eligible veteran or unremarried spouse of a veteran under provisions of the California Military and Veterans Code, he or she may qualify to receive a loan from revenue bond funds if qualified under one of the following two categories:

1.             "First-time home buyer."  A first-time home buyer is defined by the federal government as one who has not owned an interest of record in his/her principal place of residence during the three years prior to closing escrow on the revenue bond funded loan.  Both the applicant and spouse, if applicable, must qualify as first-time home buyers.

2.             "Targeted area" purchaser.  A targeted area is defined by the federal government as an area of low income or chronic economic distress.  Each Cal-Vet district office maintains a list and/or map of targeted areas within its service area.

If an applicant is purchasing in a non-targeted area, the property being purchased must qualify under purchase price limitations, issued from time to time by the Internal Revenue Service.  The applicant must also qualify under income limitations, issued from time to time by the      U. S. Department of Housing and Urban Development.

If an applicant is purchasing in a targeted area, the property being purchased must qualify under purchase price limitations, which are higher than those in non-targeted areas.  

Revenue bond loans are available only on single-family residences and  mobile homes on land owned by the applicant.  Single family residences includes individual units in condominium and planned unit developments.

Purchasers whose loans are funded with revenue bonds may be liable for a federally-imposed Recapture Tax if the property being purchased is disposed of (sold) within the first full 9 years following the funding date.  This tax is intended to repay the federal government for the benefit of using tax-exempt bonds.  There is no Recapture Tax due if the disposition of the property is by reason of the death of the veteran.

The foregoing provisions governing the uses of revenue bonds are all dictated by federal laws contained in the Internal Revenue Code.

Unrestricted (Pre-Ullman) Bond Program (Unrestricted Funds)

Cal-Vet has a limited amount of funds which can be used to fund veterans who do not qualify for General Obligation or Revenue Bonds.  Check with your nearest Cal-Vet office for availability of these funds.

Interest Rates

Interest rates are determined by the source of funds used for the loan.  The rates for current funding sources are as shown below.  Rates are set as of the date the application is received in the local Cal-Vet District Office.

¹Rates for Mobile Homes in Parks are 1% higher (Mobile Homes in Parks can be funded  only with General Obligation Bonds)

Interest rates and loan terms are subject to change.

This chart sets forth the current purchase price limitations and the current income limitations in various areas of the state. Only loans made with revenue bond proceeds are subject to these limitations which are set according to guidelines provided by the federal government. Those administering the Cal-Vet loan program have no discretion regarding these limitations.

AVERAGE AREA PURCHASE PRICE SAFE HARBOR LIMITATIONS

SINGLE-FAMILY RESIDENCES

« REVENUE BOND FUNDED LOANS ONLY «

(Effective 3/10/2000)

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FAMILY INCOME LIMITATIONS