CAL-VET LOANS UNIQUE, REQUIRE VOTER APPROVAL
HOME LOANS, REAL ESTATE LEGISLATION, TIPS FOR BUYERS
October 27th, 2008
Most people are not familiar with land contracts of sale, but that is how the State of California handles 
loans to veterans using the Cal-Vet loan program. Unlike a deed of trust or mortgage, a land contract is an entirely different method of handling a home purchase.
Deeds of trust are three party instruments consisting of a borrower (trustor), lender (beneficiary), and a neutral third party (trustee) that is usually a title company. A mortgage is a two party instrument with the borrower (mortgager) and the mortgagee (lender). Curing a default under a mortgage is a lengthy process that has other pitfalls compared to Deeds of Trust (DOT’s). In California, mortgages are rare because lenders prefer DOT’s; they are faster and easier to foreclose upon when the loan goes into default.
Land contracts, used by Cal-Vet and occasionally by sellers, are entirely different. Under mortgages and deeds of trust title transfers to the borrower. Under a land contract, title is held or retained by the lender or seller, and is deeded to the buyer once the contract has been fulfilled.
In the instance of a Cal-Vet loan, the title of the property the veteran wishes to purchase is deeded from the seller to the Department of Veterans Affairs and is held until the loan is paid in full. This is analogous to a bank holding the title (pink slip) to a car until it is paid off.
Cal-Vet loans are financed by bonds periodically put up for a vote in state elections. My understanding is the program is self-sufficient and does not cost taxpayers any money in the form of tax subsidies. The loan interest and upfront processing fees paid by the veteran cover the cost of administering the program.
There are other factors that set Cal-Vet loans apart from other financing alternatives so be sure to ask questions and have a full understanding of how they differ from traditional loans before moving forward.
In the upcoming election, there is a ballot proposition to raise funds for loans to veterans. The eligibility requirements are revised from time to time to provide more and more veterans access to Cal-Vet loans thus the need for more money to fund the loans requested.
Years ago, these loans took a long time to process and some sellers would not wait the 3-4 months it took to get the loan in place. Today, Cal-Vet loans are efficiently processed and can usually be completed in 30-45 days. The interest rate is variable, but has been stable, and does not dramatically impact the borrower’s payment like many adjustable rate loans loans causing problems in the housing market today.
These loans are primarily for Veterans that have served active duty in wartime activities. Redding has a local Cal-Vet office for qualification information and applications. Some local mortgage bankers and brokers can also handle the loan packaging and processing of Cal-Vet loans. Contact me with any questions.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
Is it a good time to be doing this with the state of the economy?
doing what?
Very good information. Thanks for letting me know about this to help me in my foreclosure problems.
Doing business (pre-charge rappelz rupees ) received a number of frequently used things, such as precious stones: the destruction spar spar against the benefits, natural spar, spar, etc., but the London spring, thick Hawkeye proposed revenue. Appreciation of these things very quickly because in the much-used, largely pre-15 buy rappelz rupees 12 gold coins and hand the benefits received to destroy the natural lot of people sell 8 cheap rappelz rupees income. 2. To do the task (30 can do) a lot of tasks can get gold coins, some of you know the task is not to say. There is the explorers of this task is the experience with the items (treasure map), you do explorer mission for at least 10 can get 3 treasure map, RP low do not know. A treasure map can be sold 5 rappelz gold, considered ways to make money is also under the good treasure map can dig their own, which has BB skills books, gifts and other valuables compass. There are many things that the task can be sold for cheap rappelz gold, Run Lola Run by items (stars debris) was the last member of a treasure map. 3. Production (as long as the learning skills 0 also can do) start with what a botanical collection that can be old herbalist, Lavender, Wild Rose was also received these things. There are alchemists, cooks, fishing, crafts, tame animals.