VA Loans in Bakersfield: 6 Advantages Beyond the Down Payment
VA-guaranteed loans offer more than a possible zero-down option. Here are six program features, from the funding fee table to the new VA Partial Claim, explained with official VA sources.
Most conversations about VA home loans stop at the down payment. That feature matters, but it is only one part of the program. VA-guaranteed loans also come with a different mortgage insurance setup, published fee exemptions, a cap on seller concessions, reusable entitlement, and a new tool for borrowers who fall behind.
Here are six features that eligible veterans, service members and surviving spouses in Bakersfield should understand, each tied to what the Department of Veterans Affairs actually publishes.
1. A down payment may not be required for eligible borrowers
VA-guaranteed purchase loans may not require a down payment for eligible borrowers. Borrowers with full entitlement are not subject to a VA loan limit. VA stopped applying county loan limits to them starting January 1, 2020.
That is VA's rule, not a promise of approval. The lender still underwrites your credit, income and assets. The home still has to appraise and meet VA's minimum property requirements. Some lenders also add their own requirements, sometimes called overlays, on top of VA's.
Price context: Bakersfield's 90-day median residential sale price was $410,000, and the median active list price was $419,500. Source: GEMLS/CRMLS via My Realty Company, as of September 15, 2026.
2. No monthly mortgage insurance, but there is a funding fee
VA loans do not carry monthly mortgage insurance. Most borrowers pay a one-time VA funding fee instead. It can be paid at closing or financed into the loan. VA's current schedule for purchase loans:
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
The funding fee on an Interest Rate Reduction Refinance Loan (IRRRL) is 0.5%.
Compare that with FHA, which charges a 1.75% upfront premium plus an annual premium on most loans. The right comparison is total cost over the time you expect to keep the loan, so ask for Loan Estimates on both.
3. Some borrowers don't pay the funding fee at all
VA lists these funding fee exemptions. You don't owe the fee if you:
- Receive VA compensation for a service-connected disability
- Are eligible for that compensation but receive retirement or active-duty pay instead
- Receive Dependency and Indemnity Compensation as a surviving spouse
- Are an active-duty service member who received a Purple Heart on or before the closing date
- Are a service member with a proposed or memorandum rating before closing that says you're eligible for compensation
Your Certificate of Eligibility (COE) shows your funding fee status. If you think it is wrong, sort that out with VA before closing, not after.
4. Seller concessions are capped, and closing costs are treated separately
VA allows sellers or builders to credit some or all of a buyer's closing costs. VA limits seller's concessions to no more than 4% of the home's reasonable value. Negotiate within that cap and confirm the structure with your lender before you write the offer. Credits above what the program allows usually get reworked late in escrow.
5. Entitlement can be used more than once
VA home loan benefits are not a one-time benefit. When a VA loan is paid off, for example after a sale, entitlement can generally be restored so it can be used again. VA also provides a one-time restoration in certain cases where the loan is paid off but the veteran keeps the property. Rules for having more than one VA loan at a time, or using remaining entitlement, are more detailed. Ask your lender to review your COE and entitlement before you house-hunt.
The IRRRL is VA's streamlined refinance for an existing VA-guaranteed loan. It is not a way to refinance an FHA or conventional loan into a VA loan. That calls for a regular VA refinance with full underwriting.
6. A new safety net if you fall behind: the VA Partial Claim
VA opened its Partial Claim program for servicer submissions on June 15, 2026. Servicers have until November 28, 2026 to fully implement it. A partial claim is a loss-mitigation option. It can address missed payments on a VA-guaranteed loan through a separate subordinate obligation, so the borrower doesn't have to cure the whole delinquency at once or modify the existing first loan's rate and term.
If you are behind on a VA-guaranteed mortgage, contact your servicer, ask about the partial claim by name, and ask when it will be available on your loan.
VA, FHA and conventional side by side
| Feature | VA-guaranteed | FHA-insured | Conventional |
|---|---|---|---|
| Down payment rule | May not require one for eligible borrowers | 3.5% with a 580+ credit score | As little as 3% for eligible borrowers |
| Monthly mortgage insurance | None | Annual MIP (0.50%–0.55% on most 30-year loans at or below $726,200) | PMI below 20% down, can be cancelled |
| Upfront charge | Funding fee (0%–3.3%) | 1.75% upfront MIP | None required by the agencies |
| Seller concession cap | 4% of reasonable value | 6% of sales price | 3%, 6% or 9% based on down payment; 2% on investment property |
| 2026 Kern County limit | None with full entitlement | $541,287 (one unit) | $832,750 (one unit) |
How VA underwriting looks at your budget
VA guidelines look at more than your debt-to-income ratio. Lenders also calculate residual income, the money left each month after major obligations, and compare it with VA's regional tables. A ratio above VA's 41% benchmark isn't automatically disqualifying, but it calls for stronger residual income or other compensating factors. This is one reason VA pre-approvals can differ from FHA or conventional pre-approvals for the same household.
Next steps for eligible borrowers
- Request your Certificate of Eligibility through VA.gov or your lender.
- Check your funding fee status on the COE.
- Get pre-approved with your actual entitlement, residual income and property costs included.
- Plan concessions within VA's 4% cap before writing offers.
- Compare VA against FHA and conventional on total cost, not just cash to close.
Questions about using your VA benefit? Contact Omar, or model scenarios with our mortgage calculators.
Sources
- U.S. Department of Veterans Affairs, VA Funding Fee and Loan Closing Costs (accessed September 15, 2026)
- U.S. Department of Veterans Affairs, VA Home Loan Limits guidance (limits removed for full entitlement, effective January 1, 2020)
- U.S. Department of Veterans Affairs, VA Partial Claims Program and Loss Mitigation Waterfall FAQs for Servicers (program launch June 15, 2026; implementation by November 28, 2026)
- VA Lenders Handbook (M26-7), Chapter 4, Credit Underwriting (41% ratio benchmark and residual income)
- HUD Mortgagee Letter 2023-05, FHA annual MIP rates; HUD Mortgagee Letter 2025-23, 2026 FHA loan limits
- Fannie Mae Selling Guide B3-4.1-02, Interested Party Contributions; FHFA 2026 conforming loan limit announcement
- GEMLS/CRMLS via My Realty Company, Bakersfield residential data as of September 15, 2026
Related: VA Loans in Bakersfield, CA
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