May 3, 2024

Navy Federal Homebuyers Choice Guide

Navy Federal Homebuyers Choice Guide

South of downtown San Diego, on the other side of San Diego Bay, Coronado is an inviting resort town that redefines coastal luxury living in one of the country's most scenic locales. Adjacent to Naval Air Station North Island and home to the famed Hotel del Coronado, which dates to 1888, this prestigious area is among California's favorite vacation destinations. It's also an exceptional place to call home.

Featuring three distinct high-end communities, including the historic homes in Coronado Village, the city's primary neighborhood, and the waterfront tranquility of Coronado Shores and Coronado Cays, the area is a unique, timeless blend of charm, elegance, and breathtaking views.

Coronado is also a prime location for Veterans and their families to claim their piece of paradise. Whether looking for modest condos or townhomes, a grand residence, a historical home, or a convenient beachside getaway, Coronado real estate can satisfy your every possible need.

To simplify the path to homeownership and help military personnel—active and retired and Veterans—secure a home in Coronado is the Navy Federal Homebuyers Choice program.

What is the Navy Federal Homebuyers Choice Program?

The Navy Federal Homebuyers Choice program is designed with the unique needs of military personnel in mind. The program stands out as a way to remove the roadblocks to buying for those who've served, with a seamless and supportive homebuying experience. Tailored specifically for Veterans, active-duty military personnel, and their families, the comprehensive mortgage services provide an exceptional avenue to owning Coronado real estate without several of the burdens associated with conventional loans.


First, you must be a Navy Federal member to qualify for a Navy Federal Homebuyers Choice loan. This allows you access to the full scope of the credit union's banking and financial services, including home mortgage loans. All active-duty service members, retired service members, Veterans, immediate family members, and certain Department of Defence (DoD) civilian affiliations are eligible to join.

Once a member, the Homebuyers Choice program is available to all qualifying members. Be prepared to verify eligibility before your loan application. The basic requirements for starting a Homebuyers Choice loan application include:

  • Social Security number
  • Date of birth
  • Navy Federal Credit Union account number
  • Most recent paycheck stubs
  • Two most recent years' W2 and tax returns
  • Most recent bank account statement 
  • Additional information on other assets

Note that surviving spouses who haven't remarried may be eligible under certain conditions.

Credit Score Insights for Navy Federal Mortgages

While credit scores play a role in mortgage eligibility, Navy Federal adopts a holistic approach to loan approval, considering various factors beyond credit scores. Prospective borrowers are encouraged to have a score above 620, yet there's room for those with less-than-perfect credit.

Navy Federal's Debt-to-Income Ratio Requirements

Your debt-to-income ratio (DtI) is pivotal in approving a Homebuyers Choice loan. This ratio compares your debt and expenses against your income. Navy Federal advises a front-end ratio of 28% or lower and a back-end ratio of 36% or lower for the best chance at an affordable loan, capping the DtI at 43%.

Benefits of the Homebuyers Choice Loan

Imagine securing your Coronado home without the long wait to save for a down payment. That is the primary selling point of the Navy Federal Homebuyers Choice loan. The promise of 100% financing makes this loan ideal for first-time buyers, those upgrading their current living situation, and Coronado luxury home buyers needing a Jumbo loan.

The major benefits of the Homebuyers Choice loan include:

  • $0 down payment
  • No private mortgage insurance (PMI) requirement
  • Fixed-rate mortgage with consistent monthly principal and interest payments
  • No-refinance rate drop provision

Overall, the loan is structured to make homeownership accessible and stress-free. In addition to no down payment, lack of PMI is a huge savings measure, as most lenders assess the fee on loans that cannot meet the 20% down payment threshold.

Another significant benefit is the no-refi rate option, which allows you to lower your interest rate should rates drop later without fully refinancing your loan. Navy Federal only charges a $250 fee each time you exercise the rate drop option.

Interest rates with the choice program are slightly higher than other loan options. However, as few lenders go as far as Navy Federal's combination of 100% financing and no PMI, it can prove an attractive trade-off for a number of Coronado real estate buyers.

Closing Costs with the Homebuyers Choice Mortgage

While you need not stress over paying a down payment or PMI, the Homebuyers Choice loan does not eliminate closing costs on your new Coronado home. Expect your closing costs to typically range between 2-4% of your loan amount and to include some or all of the following expenses:

  • Loan Origination Fee
  • Credit Report Fee
  • Escrow Fees
  • Title Search and Title Insurance
  • California Real Estate Transfer Tax
  • Attorney Fees
  • Homeowner's Insurance
  • Earthquake, Fire, and Flood Insurance
  • Property Taxes
  • HOA Fees
  • Appraisal and Home Inspection Fees
  • Homebuyers Choice Funding Fee

Note that the Homebuyers Choice loan includes a funding fee of 1.75% of the loan amount, which can be financed into the loan, offering flexibility in managing upfront costs. This fee can be waived for a 0.375% increase in the interest rate. Likewise, the Choice program's 1% origination fee can also be waived for a 0.25% increase in the interest rate.

Discover More of Coronado with a Trusted Partner

If you're ready to learn more about Coronado real estate, including luxury homes in Coronado Cays or waterfront options in Coronado Shores, contact Team Shellback today to secure your dream home. Allow their experience, expertise, and deep understanding of the unique homebuying needs of military personnel and their families to help you navigate the stunning Coronado residential marketplace.

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