How to Buy a Home With a VA Loan in San Diego: A Complete Buyer's Guide
San Diego Real Estate · Buyer Guides
How to Buy a Home With a VA Loan in San Diego: A Complete Buyer's Guide
San Diego is home to one of the largest concentrations of active-duty service members and veterans in the country, and a VA loan is one of the most powerful tools available for buying a home here. It also comes with its own rulebook: what you're allowed to pay, what you're not, how quickly you need to move in, and what your lender will require along the way. Here's what eligible buyers need to know before writing an offer.
Who Is Eligible for a VA Loan?
Generally, you may qualify for a VA loan if you meet one of the following:
VA Loan Service Requirements
- 90 consecutive days of active duty during wartime
- 181 days of active duty during peacetime
- Six qualifying years of service in the National Guard or Reserve, or 90 days of active service under a federal call-up
- Discharge due to hardship, a service-connected disability, or a reduction in force
- Early-out discharge after completing at least 21 months of a two-year enlistment
- Surviving spouse of a service member who died in service or from a service-connected disability
If your discharge doesn't clearly fit these categories, it doesn't necessarily mean you're ineligible. The VA can review your character of service and, in some cases, restore eligibility. Your lender can pull your Certificate of Eligibility electronically in most cases, and you don't need it in hand before you start shopping for a home. Keep in mind that eligibility from the VA and loan approval from a lender are two separate steps; the VA confirms your service qualifies for the benefit, while the lender still evaluates your credit, income, and debt-to-income ratio the way it would for any other loan.
What a VA Buyer Is Allowed to Pay
One of the biggest advantages of a VA loan is that the VA limits how much of the transaction cost can land on the buyer. Here's what VA buyers can pay:
Allowable Buyer-Paid Costs
- Lender origination charges, capped at 1% of the loan amount when a flat fee is used
- Appraisal, credit report, title, escrow, and recording fees
- Discount points, if you choose to buy down your rate
- The VA funding fee, unless you qualify for an exemption
- Homeowners insurance and property tax reserves
- Buyer-broker commissions, following a permanent 2026 VA rule change described below
That last item is worth pausing on. For decades, VA buyers were prohibited from paying their own buyer's agent commission directly, which meant sellers had to cover it or veterans went unrepresented in a negotiation. In April 2026, the VA made permanent a rule allowing VA borrowers to pay buyer-broker fees the same way conventional and FHA buyers do. In practice, this means you can pay your agent's commission out of pocket, negotiate it as a seller concession, or split it, depending on the market and the offer you're making.
What a VA Buyer Is Not Allowed to Pay
If a lender uses the flat 1% origination charge, several specific fees cannot also be billed to the veteran separately, including:
Non-Allowable Fees (When the 1% Flat Fee Applies)
- Application, processing, and underwriting fees
- Document preparation, notary, postage, and courier charges
- Rate lock or lock extension fees
- Appraisal or inspection fees ordered for the lender's own benefit, rather than the buyer's
- Real estate attorney fees, in most cases
These protections exist so veterans aren't quietly absorbing lender overhead disguised as itemized charges. If something on your Loan Estimate looks unfamiliar, it's worth asking your lender directly why it's categorized as allowable; a good VA lender will walk you through it without hesitation.
Lender Requirements for VA Loans
The VA guarantees a portion of the loan, but a private lender is still the one extending the money, which means normal underwriting still applies. Here's what to expect:
Credit and income
The VA itself sets no minimum credit score, but most VA-approved lenders look for a score in the 580 to 620 range, and stronger terms typically open up above 640. Lenders will also evaluate your debt-to-income ratio and residual income, a VA-specific calculation that looks at what you have left over each month after major expenses.
Certificate of Eligibility
Your lender needs a valid Certificate of Eligibility before your loan can close. It confirms your qualifying service, your remaining entitlement, and whether you're exempt from the funding fee.
Understanding your VA entitlement
Entitlement is the dollar amount the VA guarantees to your lender, and it's what allows most VA buyers to purchase with no down payment. It isn't a spending limit on its own; it's better understood as the VA's backing behind the loan. Your entitlement comes in two parts:
Basic vs. Bonus Entitlement
- Basic entitlement covers the first $36,000 of the VA's guaranty
- Bonus entitlement covers the remainder, up to 25% of your county's conforming loan limit
- In most San Diego County transactions, that combined guaranty works out to roughly $208,000, based on the 2026 standard conforming loan limit of $832,750. (Loan limits are county-specific and are subject to change. Be sure to always double check current loan limits.)
Your Certificate of Eligibility shows both your total entitlement and any amount already in use, which is the simplest way to check where you stand. A few scenarios worth understanding:
How Entitlement Affects What You Can Borrow
- Full entitlement applies if you've never used a VA loan, or if a prior VA loan was paid off and the entitlement was restored. With full entitlement, there's no VA-imposed loan limit; you can buy with zero down as long as a lender approves the amount
- Partial entitlement applies if you currently have an active VA loan, or had a prior VA foreclosure or short sale. In this case, your zero-down purchasing power is limited to the county conforming loan limit minus the entitlement already committed elsewhere
- If you want to buy above your remaining zero-down limit while entitlement is only partial, a down payment on the difference will typically be required
- Entitlement tied up in a prior VA loan can often be restored once that home is sold and the loan is paid off, or in some cases even sooner, depending on your circumstances
Most buyers never need to do this math themselves; your lender will pull your Certificate of Entitlement and calculate your available entitlement directly. But knowing whether you're working with full or partial entitlement before you start touring homes helps set realistic expectations, particularly if you're a repeat VA buyer here in San Diego's higher-priced coastal neighborhoods.
Appraisal and minimum property requirements
Every VA purchase requires an appraisal, which serves two purposes: confirming the home's value and confirming it meets the VA's minimum property requirements (MPRs). These standards focus on safety, soundness, and sanitary condition. If the appraiser flags issues, such as a malfunctioning heating system or a structural concern, those items generally need to be resolved before closing.
Primary residence only
VA loans are intended for owner-occupied primary residences, not vacation homes or rental property. Lenders will have you certify your intent to occupy at closing.
Termite and Pest Clearance Requirements
California is classified by the VA as a very heavy termite infestation zone, which makes a wood-destroying insect inspection mandatory on VA purchases here.
A few details matter for timing:
What to Know About the Termite Report
- The report is valid for 90 days from the inspection date
- If active infestation or damage is found, treatment and required repairs are typically completed and cleared before the loan closes
- Veterans in California can now pay for the inspection and any related treatment themselves
- Long escrows sometimes require a re-inspection if the original 90-day window lapses before closing
If you're working with a VA buyer as a seller, or you're a VA buyer yourself, the practical takeaway is the same: schedule the pest inspection early in the transaction, not near the end. It tends to move alongside the appraisal timeline rather than trailing behind it.
Occupancy Requirements: How Soon You Must Move In
Because a VA loan is meant to help buyers secure a home to live in, not an investment property, the VA expects the buyer to occupy the home within a reasonable time after closing. In practice, that's generally interpreted as 60 days.
There's flexibility built in for military life. Common exceptions include:
Situations That May Allow Delayed Occupancy
- Active-duty orders, deployment, or a pending PCS move
- A spouse or dependent occupying the home on the service member's behalf while they're away
- Retirement expected within 12 months of closing, with documentation of the retirement date and post-transition income
- Repairs or renovations required to meet minimum property requirements before the home is livable
Any of these need to be discussed with the lender and documented before closing, not explained after the fact. As a general rule, the VA doesn't consider an occupancy date more than 12 months out to be reasonable. Once a buyer has genuinely occupied the home, most lenders expect at least 12 months of residency before it can be converted to a rental.
The VA Funding Fee
Most VA borrowers pay a one-time funding fee that supports the loan program and takes the place of monthly mortgage insurance. It's calculated as a percentage of the loan amount:
| Scenario | Down Payment | Funding Fee |
|---|---|---|
| First-time use | Less than 5% | 2.15% |
| First-time use | 5% to 9.99% | 1.50% |
| First-time use | 10% or more | 1.25% |
| Subsequent use | Less than 5% | 3.30% |
| Subsequent use | 5% or more | 1.50% or 1.25% |
The fee can be paid in cash at closing or rolled into the loan balance. Veterans receiving VA disability compensation, Purple Heart recipients on active duty, and certain surviving spouses are exempt entirely. Sellers can also cover the funding fee as part of their concessions, which the VA caps at 4% of the home's value; that 4% ceiling covers the funding fee and certain other buyer costs, and is separate from ordinary seller-paid closing costs, which can still be negotiated outside that cap.
Other VA-Specific Details Worth Knowing
No private mortgage insurance
Unlike conventional loans with less than 20% down, VA loans don't require monthly PMI. The funding fee replaces it as a one-time cost instead.
No VA-imposed loan limit for full entitlement
Veterans with full entitlement, meaning no prior VA loan use or fully restored entitlement, generally aren't subject to a VA-set loan limit. Lenders still underwrite based on income and credit, so your actual borrowing power depends on your financial profile.
Loans can be reused
VA entitlement isn't a one-time benefit. As long as a prior VA loan is paid off, or in some cases even if it isn't, entitlement can often be restored or partially reused for a future purchase.
Buying with a VA loan in San Diego?
Whether you're a first-time VA buyer or using your benefit again, having an agent who understands the timeline, the paperwork, and how to write a strong VA offer makes a real difference. Let's talk about your goals and what's available in your target neighborhood.
CALL/TXT/EMAIL NATALIE TODAY TO DISCUSS YOUR OPTIONS
(858) 926-9343
Natalie.Joy.Harris@gmail.com
Get in touch →
Frequently Asked Questions
Who is eligible for a VA loan?
Veterans, active-duty service members, certain National Guard and Reserve members, and eligible surviving spouses may qualify. Generally, this means 90 consecutive days of active service during wartime, 181 days during peacetime, six qualifying years in the Guard or Reserve, or a discharge due to hardship, service-connected disability, or early-out after 21 months of a two-year enlistment. A Certificate of Eligibility from the VA confirms qualifying service.
What closing costs is a VA buyer not allowed to pay?
VA buyers cannot pay lender fees beyond a 1% origination cap, and cannot be charged separate lender junk fees such as application, processing, underwriting, document preparation, notary, or rate lock fees when that flat 1% is used. Historically, buyer-broker commissions were also restricted, but as of a permanent 2026 rule change, VA buyers can now pay their buyer's agent commission directly, the same as conventional and FHA buyers.
Does a VA loan require a termite inspection in San Diego?
Yes. California is classified by the VA as a very heavy termite infestation zone, so a wood-destroying insect inspection using the NPMA-33 form is required. The report is valid for 90 days, and any active infestation or damage generally must be treated and cleared before the loan closes, not afterward. Veterans in California are now permitted to pay for this inspection and related repairs, though it remains negotiable with the seller.
How soon must a VA buyer move into the home after closing?
The VA expects the buyer to occupy the home within a reasonable time, generally interpreted as 60 days after closing. Extensions are possible for documented circumstances such as active-duty orders, deployment, retirement within 12 months, or repairs needed to meet minimum property requirements, but these must be disclosed to the lender before closing.
What is the VA funding fee?
The VA funding fee is a one-time charge that replaces monthly mortgage insurance on most VA loans. For first-time use with less than 5% down, the fee is 2.15% of the loan amount; it drops to 1.50% with 5% or more down and 1.25% with 10% or more down. Subsequent use with less than 5% down is 3.30%. Veterans with a service-connected disability rating, Purple Heart recipients on active duty, and certain surviving spouses are exempt.
Can a seller pay a VA buyer's funding fee?
Yes. Sellers can cover the funding fee as part of allowable concessions, which the VA caps at 4% of the home's purchase price. That cap applies to funding fee contributions and certain other buyer costs; ordinary seller-paid closing costs can still be negotiated separately, outside that 4% limit.
Categories
Recent Posts
GET MORE INFORMATION
