CalVet Loans Frequently Asked Questions (FAQs)
These questions are loosely organized into two groups, the first being for veterans
considering applying for a CalVet Home Loan (Prospective Borrowers), and the second for
veterans who currently have a CalVet loan (Current Contract Holders) and have questions
about loan servicing issues. However, all of the questions are relevant to both groups.
For Prospective Borrowers
Am I eligible for a CalVet Home Loan?
The simple answer is that if you received a discharge classified as Honorable or Under
Honorable Conditions, and you served a minimum of 90 days active duty (not including active
duty for training purposes only), you are eligible for a CalVet Home Loan. Recent changes in
the Military & Veterans Code and CalVet Home Loan funding policies have made most veterans
eligible under state law, including those whose entire active service was during
There are exceptions to the 90 days service requirement for veterans who
- were discharged sooner due to a service-connected disability, or
- are eligible to receive a U.S. campaign or expeditionary medal, or
- were called to active duty from the Reserves or National Guard due to a Presidential
Current members of the California National Guard or the US Military Reserves who have served
a minimum of one year of a six year obligation are also eligible provided they qualify as
first time home buyers or purchase properties located in certain Targeted Areas.
I need a copy of my DD214 to apply for a loan. How do I get one?
Obtaining a copy of your Release from Active Duty (DD214) is easier than ever. Once you have
searched your personal records and determined that you no longer have a copy there are
several things you can do. In the past veterans were advised to have their DD214 recorded
in the county they went home to after their release. If you did that, contact the county
recorder and you should be able to get a copy there. If you used a DD214 to apply for other
benefits, such as educational or medical benefits, the agency you applied to may be able to
give you a copy. If neither of these ideas work the fastest way to obtain a copy is through
the National Archives on their website at
They are the records custodian for most discharged and retired members of all branches of
service. Expect a two to three week wait to receive your record, but ordering online may
speed up the process. CalVet can begin processing your loan without the DD214, and we may
be able to confirm your dates of service directly through USDVA. Contact one of our offices
if you need assistance.
I am career military and currently on active duty. Can I apply for a loan
Yes. CalVet Home Loans are available to active duty personnel. However, there is an occupancy
requirement for the life of the loan. You or members of your immediate family must occupy the
home within 60 days of close of escrow and continue to occupy until the loan is paid in full.
If you are uncertain about how long you will be able to occupy the home before you have a
change of station, you should consider whether or not buying a home is the right decision.
If you have to sell the home in the first few years the costs of sale may be more than your
equity in the property including your down payment and any appreciation in value that
occurs. On the other hand, if your family will remain in the home even if you are
reassigned, and your intent is to live in the home after retirement, it may be a good idea
to buy now.
I am currently on active duty and due to be released soon. Can I apply for a
Yes, if you or members of your immediate family will be able to occupy the home within 60
days of the close of escrow. Immediate family includes your spouse and/or dependent children.
You must also have sufficient income to qualify for the loan. If you are returning to a job
you held prior to your enlistment or orders to active duty, and your employer can confirm
your employment and projected income, we will be able to use that income to qualify you.
If you are starting a new job, the employer must confirm the start date and projected
income. We can also use retirement income and your spouse's income to qualify you for the
loan. Contact one of our offices to discuss your situation and to pre-qualify.
Can I refinance the home I currently own?
No. You must apply for your CalVet Home Loan prior to taking title to the property. If you
are constructing a home on property that you already own, you must apply before the home is
complete and a certificate of occupancy is issued.
What is the interest rate on CalVet Home Loans?
Current interest rates are published on this website at
http://www.cdva.ca.gov/calvetloans/interest.pdf . Please remember that our interest rates are subject to change without notice. Your
rate will be locked in as of the date you submit a loan application on a specific property.
Is there a penalty if I decide to refinance my CalVet loan with another lender
CalVet Home Loans do not have a prepayment penalty. You can pay off you loan at any time.
The escrow holder handling your new loan can request a payoff from us. Since your fire and
hazard insurance and disaster insurance are tied to your loan make sure you have arranged
for replacement coverage before you pay us off.
Is the CalVet interest rate variable or fixed?
Cal-Vet Loans have always had a variable interest rate, although historically rates have not
been changed often, and the rate is not tied to an index. All loans issued prior to 1999 are
required by law to have a uniform interest rate, and if changed they must all change
together. Loans issued in 1999 and subsequent years have rates that were set based on the
cost of the bond funds and market conditions, and have a cap on the rate increase of 0.5%
(1/2 of 1%) over the life of the loan. It is unlikely that the department will need to
change the rates on existing loans.
What is the loan term for CalVet Home Loans?
Since the bonds that we sell to fund the program are 30-year bonds we set up all new loans
for 30-year terms. However, you can make additional payments on the loan principal at any
time, and the effect of making additional principal payments is to reduce the loan term.
If you want to pay off your loan in 15 or 20 years we can calculate what the principal and
interest payment would need to be and you can make that extra payment amount each month.
There is no prepayment penalty for paying the loan off early.
Can I borrow the down payment for my loan?
Yes. You can borrow the down payment provided that your income is sufficient to handle the
monthly obligation for that loan in addition to the CalVet loan and your other monthly
obligations. If the loan is to be secured by a deed of trust on the property, you must
submit copies of the Note and Deed of Trust during loan processing, and we will require
that the lender sign a subordination agreement acknowledging that their loan will be in
second position to the CalVet loan. If the total down payment, including your cash down
payment and the secondary financing, total 20% or more of the purchase price (or market
value if less), then the funding fee, which is used to purchase mortgage insurance, is
waived. You must disclose the source of the down payment on your loan application, and
if the application does not show sufficient cash assets to pay the difference between the
sales price and loan amount, we will ask you for that information.
Does my CalVet Loan affect my VA or Cal-Vet entitlement?
Possibly. CalVet obtains a loan guarantee from the USDVA on some loans, and when VA
guarantees the loan you are using both your CalVet and VA entitlements. If the VA guaranty
is not obtained then only your CalVet entitlement is affected. Both CalVet and VA
entitlement is restored when the loan is paid off.
How are CalVet Home Loans processed?
The processing for a CalVet Home Loan is very similar to the process for other lenders and
types of loans. Of course we need documentation to confirm that you are a veteran. Then we
use the same application form and other forms that all lenders use. You can also apply on
line. Your application initially will be screened by staff in one of our field offices. Some
loans will be fully processed there, but most loans are forwarded to our centralized
loan-processing unit in Sacramento. Staff in the field offices can assist you in tracking
the loan, and we can provide automatic email notification so that you are aware of every
status change that occurs during processing. An appraisal is ordered from an appraiser in
your area, and when processing is complete you will receive a loan approval letter and loan
documents will be sent to your escrow holder by overnight mail. You sign the loan documents
at the escrow and they return them to us and request the loan funds when they are ready to
close the escrow. Most loans are processed in under 30 days, but tell us if you need to
close sooner. Our loan-processing goal is to meet your needs.
How are CalVet Home Loans different from other home financing?
There are some basic differences between CalVet Home Loans and other financing you might
How do I know when to make payments and how much to pay?
- The State of California has chosen to provide CalVet Home Loans as a benefit to veterans
who want to live in our state. Because it is a veteran's benefit we make every effort to
make the loan available to all veterans. We qualify you for the loan using the same
criteria as other lenders, but because we are a direct lender and we service the loans
we make, we are able to give every veteran extra consideration, and if we can qualify
you for a loan you get the same rate as everyone else. We will not classify you as a
higher risk and increase the interest rate.
- CalVet uses a Contract of Sale as the financing instrument for our loans. What that
means is that CalVet purchases the home you selected and takes legal title to the
property at close of escrow, and then sells the property to you using a contract of
sale. When the loan is paid in full, either when the last payment is made or if you
refinance or sell, we issue a grant deed to transfer legal title to you. A document
called a Memorandum Agreement of Sale is recorded to show that the contract exists,
and you hold what is referred to as the equitable title to the property which gives
you all the rights of ownership. One of the major advantages of a Contract of Sale
is that CalVet is able to obtain Fire and Hazard insurance, and Disaster Insurance and
provide superior insurance coverage at group rates. The technicality of holding legal
title also assists us in obtaining the best possible bond ratings for the bonds that we
sell to finance the program. For the very small number of veterans who default on their
CalVet Home Loan, the Contract of Sale makes it easier for us to recover the property
and minimize losses to the program.
You will receive monthly billing statements showing the amount due for principal, interest
and loan impounds (escrows). A payment coupon is included with the statement to be returned
with your payment. All payments are due on the first of each month. You can also set your
account up for automated electronic funds transfer. Your payment would be withdrawn from
your checking account on the 5th of each month. You will still receive a monthly statement,
but you would not have to write a check or worry about whether or not we receive it by the
16th of the month to avoid late fees.
For Current CalVet Contract Holders
What do I do if I want to make improvements to my property and need to borrow additional
CalVet has a Home Improvement Loan program that can be used to finance most improvements to
your home. Information is available on our website or you can contact one of our offices.
What if I need to use the equity in my home for other purposes?
CalVet allows you to obtain financing from other lenders if you need to borrow money for any
purpose using the equity from your home. You must request our consent, however consent is
routinely granted subject to your CalVet loan being current or paid current during the loan
process. You choose your lender and then submit a Request for Consent to Encumber to CalVet
while they are processing your loan. We issue the approval directly to the lender in time
for them to close.
My CalVet home was damaged by a fire/flood/earthquake, or sustained water damage from
an internal source. How do I file an insurance claim?
If your Cal-Vet home sustains damage from any of the following disasters: fire, earthquake,
mudslides, flooding, wind damage or a water pipe break, please call "Sams and Associates" at
1-800-626-1613 to file a claim. Please have your Cal-Vet loan number available, if possible.
Will the interest rate on my existing loan be reduced?
It is unlikely that rates on existing loans will change. Cal-Vet's intent in moving away from
a single interest rate for all borrowers in 1999 was to be able to offer competitive new loan
rates that were effectively fixed rate loans, although the ability to increase the rate if
needed was retained. Our mission is to help veterans buy homes, and we can best do that by
offering you a below market rate at the time you are buying.
Does Cal-Vet Refinance?
No. Cal-Vet cannot refinance a loan on an existing home. This is a limitation based on both
federal and state laws.
Can I refinance the Cal-Vet property through another company?
Yes, of course. However, if you are considering refinancing, please make sure you consider
all factors. Can you obtain comparable fire and hazard insurance? Do you need the disaster
coverage that Cal-Vet offers at an affordable price? Is the life and disability insurance
coverage something you need, and can you replace it at a comparable cost? Most importantly,
are you really saving money?
Why should I keep my Cal-Vet Loan rather than refinancing through another lender?
Over the years, Cal-Vet has added features that add value to our loans:
You will receive monthly billing statements showing the amount due for principal, interest
and loan impounds (escrows). A payment coupon is included with the statement to be returned
with your payment. All payments are due on the first of each month.
- Cal-Vet provides fire and hazard coverage at group rates. Most loan holders find that the
combination of guaranteed replacement cost coverage and low deductible are better than what
they can get in the market for comparable costs. Also, Cal-Vet does not increase your
premium or cancel your coverage just because you submit a claim, and our rates are the
same no matter where your home is located.
- Cal-Vet's Disaster Indemnity program cannot be matched anywhere in the market. You are
protected against loss from flood and earthquake with very low deductibles and premiums
(just $1.50 per $1,000 of coverage).
- Cal-Vet's group Life and Disability coverage through The Standard Insurance Company
helps you protect your family. The mandatory life insurance pays up to five years of
your principal and interest payment in the event of the insured's death, and you may
also be able to purchase optional extended life insurance and/or disability benefits
at group rates.
- Cal-Vet services your loan through the life of the loan. We do not sell your loan to
an unknown lender on the secondary market. We strive to provide accurate and efficient
customer service, and are here to help in times of financial hardship.
- Cal-Vet offers Home Improvement Loans up to $150,000 at our current below-market
- Cal-Vet respects your privacy. We do not release any information about you or your loan
to any other parties.
What do I do if I lose my statement or it does not come in the mail?
You can call our Customer Service Unit at 1-800-952-5626 and request a duplicate statement.
If necessary, you can mail your payment without the payment coupon, but please be sure to
write your contract (account) number on the check. Send your payment to:
California Department of Veterans Affairs
Can I have my payments made through automatic withdrawals from my bank account?
P. O. Box 942888
Sacramento, CA 94288-0001
Yes, you can pay by Electronic Funds Transfer (EFT). Details and an application form are
available elsewhere on our web site or you may contact our Contract Services Unit at
What is included in my payment?
Your payments include principal, interest, and applicable property taxes and insurance
premiums. The tax portion and premiums are in separate escrow (impound) accounts, and
payments are made to the county or insurance carriers when due. Once each year, you will
receive a Summary Statement with an analysis of your escrow accounts. The Summary will
advise you of any shortage or overage, and the interest we pay you on those accounts.
When is my payment late?
Payments are due on the first of the month and are late if received after that date.
However, you have a 15-day grace period before late fees are assessed. If your payment is
not received for posting by the 16th of the month, a late fee will be assessed. Any payment
over 30 days delinquent will be reported to the credit bureau. Partial payments can also
create a late reporting to the credit bureau if the remainder due for your payment is $4.00
If payments are due on the first of the month, why am I receiving my monthly billing
statement after the first of the month?
All billing statements on fully funded loans are mailed out on or before the 24th of the
month, although there have been rare instances where statements were mailed after the 24th.
However, if your loan is a construction, home improvement, or rehabilitation loan, monthly
statements are mailed on or about the 1st of each month so that draws at the end of the
month can be included in the interest calculation. Additional time is allowed for payments
to be submitted. Once the final draw is issued, and the loan is fully funded, your monthly
statements will be mailed to you prior to the 1st of the month.
What if I forget to mail my payment, or the payment is lost in the mail?
If your payment is not received for posting by the 16th of the month, a late fee will be
assessed you may receive a reminder notice if your payment has not been received by the
20th of the month. Please make your payments promptly, and allow for mail time.
What if I'm experiencing financial difficulty and might have to miss a payment?
As soon as you realize that you might have to miss a payment, call our Collection Unit at
1-800-952-5626. They will help you work out a solution. Remember, a partial payment is much
better than no payment at all, and there may be a way to avoid missing a payment.
If I'm behind in my payment, how do I catch up?
Call the Collection Unit at 1-800-952-5626 as soon as possible, and they will help you make
arrangements to catch up.
What if I want to pay more? Can I reduce my loan balance faster?
Yes! Additional principal payments will reduce your loan balance faster and save you interest
costs over the life of the loan. You can include additional payments (in any amount) with
your regular monthly payment. If you send a separate payment, be sure to include your
contract number on the check and a note indicating it is a principal payment or curtailment.
Can I pay off the loan at any time without prepayment penalties?
When will I get a form showing the interest and taxes paid for the year?
By the end of January of each year, you will receive a form (1098 or 1099) advising you of
the interest and taxes paid for the previous year.
Is my CalVet loan assumable?
We do not allow CalVet Home Loans to be assumed. Any eligible veteran can obtain a new
CalVet Home Loan to purchase your home. Contact the district office near you for details.
Does my payment cover all of my property taxes?
Yes, except for supplemental tax assessments if you are in the tax impound program. You
should pay any supplemental tax bill yourself. If you cannot pay it, contact the Contract
Services Unit for assistance.
Can I get out of the tax impound program?
Yes. Anyone with 20% or more equity and a good credit record may be released from the tax
impound program. Contact the Contract Services Unit for an application.
What if my marital status changes, or for some other reason I want to change how I
hold title to my home?
You must notify Cal-Vet when events that affect title to the property occur. Call
1-800-952-5626 as soon as you are aware there will be a change, and we will explain what
documentation is needed.
If I need to grant an easement over my property or make some other change to the legal
description, what should I do?
Call us at1-800-952-5626, and we will explain what is needed to modify your contract. For
some modifications, there is a service fee.
Are there fees for loan servicing?
There are fees for some services in order to offset operational costs. Call us at
1-800-952-5626 for details.
Will the loan have to be paid off if the veteran passes away?
No. After any insurance benefits have been applied, the surviving spouse or heirs can
continue with the loan. Call us at 1-800-952-5626 for assistance.
Can I rent the home?
You are required to occupy the home. However, you may request a waiver of the occupancy
requirement if you must leave the home temporarily. Call us at 1-800-952-5626 to see if you
qualify for a waiver.
Can I take out a "second" mortgage loan through another lender behind my Cal-Vet loan?
Yes, with the Department's permission. You and your lender will be required to complete a
"Consent to Encumber" form, which you may obtain by downloading the form from this website
(http://www.cdva.ca.gov/calvet/consent.asp), by calling us and requesting the form, or by
picking up the form at any Cal-Vet office.
What if I am called back to active military service from the Reserves or National Guard?
If you are called to active service, you may qualify for relief under the Service Members
Civil Relief Act. The act mandates a reduction in interest rate to 6%, and may
also protect you from foreclosure action. You also may be able to defer portions of your
monthly installments during your active duty. Please call our Contract Services Unit for
information if you are called to active duty.