What are the target areas in the California Veterans Home Loan Programs?

How to stop renting and start owning? Well, there are some options military veterans and active duty personnel should explore, like the Cal Vet home loan program. Cal Vet’s home loan program has helped countless California veterans achieve the American Dream of homeownership. Cal Vet’s home loan program offers many benefits to borrowers, including below-market interest rates and low or no down payment. Now that eligibility requirements have been expanded, virtually every veteran who wants to buy a home in California qualifies for a Cal Vet home loan.

Cal Vet home loans are designed to save you money and protect your investment. If you purchase 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 there is no first-time homebuyer requirement and there are higher sales price limits in all areas and higher income limits in most areas .

The definition of a (TA)

The 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 at or below 80 percent of the state median income. Cities, counties, and other government agencies may have specific areas in their jurisdiction that are “targeted,” but only census tracts identified by the federal government as “targeted” are used for Cal Vet home loan purposes.

To encourage Cal Vet home loan recipients to purchase homes in (TA), homebuyers receive certain incentives. Mortgage loans provided through the Cal Vet program for the purchase of homes in targeted areas are financed with state-issued Qualified Mortgage Bonds (QMBs). 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 almost half of all target areas in the state. QMB loans generally require that you be a first-time homebuyer, but that requirement is waived if you purchase a home in a specific area. The maximum allowable income limit is also higher in most targeted areas, giving borrowers greater homeownership opportunities. The cap on the price you can pay for a home is also raised to give buyers a wider range of available properties.

The purchase price of homes in select areas may not exceed 110% of the area median purchase price for the statistical area or county where the property is located. Income limits for which applicants must qualify are issued annually by the US Department of Housing and Urban Development. For example, as of June 25, 2013, the income limit for one or two people purchasing a house in a specific area of ​​Los Angeles County is $101,160. Purchase price limits in select areas in Los Angeles County are $823,308 as of the above date.

QMB loans are only available for single-family residences, including condominiums and mobile homes located on land owned by the applicant. To determine if the home you want to buy is in a specific area and qualifies for a QMB loan, contact the US Department of Housing and Urban Development.

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