What Are the Targeted Areas in California Veteran’s Home Loan Programs?

How do you stop renting and start owning? Well, there are a few options that military veterans and active duty personnel should explore, like the Cal Vet home loan program. The Cal Vet home loan program has helped countless California veterans attain the American Dream of home ownership. Cal Vet’s home loan program offers numerous advantages for 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 buy a home in a designated target area (TA) with your Cal Vet home loan, you could qualify for even more benefits. Purchasing a home in a (TA) gives you greater flexibility because the first-time homebuyer requirement is waived and there are higher sales price limits in all areas and higher income limits in most areas.

The Definition of a (TA)

Areas that have been targeted by the Federal Government were identified in the Federal Census as areas where 70 percent of families have an income that is 80 percent or less than the statewide median income. Cities, counties, and other governmental 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 buy homes in (TA’s), homebuyers are provided with certain incentives. Home loans provided through the Cal Vet program for the purchase of homes in targeted areas are funded from State Allocated Qualified Mortgage Bonds (QMB). QMBs are tax-exempt private activity bonds.

Benefits of Buying a Home in a (TA)

Approximately 33 of the 58 counties in California have targeted areas, but Los Angeles County has almost half of all the targeted areas in the state. Typically, QMB loans require you to be a first-time homebuyer, but that requirement isn’t enforced if you buy a home in a targeted area. The maximum allowable income limit is also higher in most targeted areas, giving borrowers expanded homeownership opportunities. The limit on the price you may pay for a home is also raised in order to provide buyers with a wider range of available properties.

The purchase price for homes in targeted arreas cannot exceed 110% of the average area purchase price for the statistical area or county where the property is located. The income limits that applicants must qualify for are issued annually by the US Department of Housing and Urban Development. For example, as of June 25, 2013, the income limit for one to two people who purchase a home in a targeted area in Los Angeles County is $101,160. Purchase price limits in targeted areas in Los Angeles County are $823,308 as of the aforementioned date.

QMB loans are only available for single-family residences, including condominiums, and mobile homes located on land that’s owned by the applicant. To determine if the home you’d like to purchase is in a targeted area and qualifies for a QMB loan, get in touch with the United States Department of Housing and Urban Development.