treehugger, if he hasn’t already, your dad needs to apply for his VA “Certificate of Eligibility” to give to a prospective lender when he applies for a VA-backed home loan:
In your dad’s case of owing ~$300K, he needs to first find out if he qualifies for a conventional refinance because that would certainly be much cheaper mortgage money to borrow, especially if his credit is good to excellent. Having a “zero down” mortgage provision won’t do him any good on a refi unless he doesn’t currently have any equity.
Because it is a refi, your dad won’t be able to ask any “seller” to help with his funding fee, and, in any case, CA homebuyers have historically never had much success with this request (of individual resale-sellers) … especially in the coastal counties.
I’m not sure if conventional mortgage rates currently match the prevailing 30-yr VA fixed rate but even if they don’t but come close, a $6K up-front payment will pay for a LOT of years’ payments at slightly above the rate the VA guaranteed loan programs are offering.
I’ve known many vets who have never used their VA mortgage loan benefits here in CA for the reasons above … as well as the fact that the VA-backed mortgage loan ceiling used to be quite a bit lower than the FF conventional conforming loan ceiling. However, this is not the case today.
