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Chico is one of the more affordable cities in Northern California. That makes FHA loans a strong fit here — you don't need a massive down payment to get in.
Butte County home prices stay well below coastal metros. FHA loan limits in this county give buyers real purchasing power without stretching into jumbo territory.
580 (3.5% down)
Min Credit Score
3.5%
Min Down Payment
43%
Max DTI (typical)
Government-insured
Loan Type
2 years required
Employment History
FHA Loans in Chico
You need a 580 credit score to put 3.5% down. Drop below 580, and lenders require 10% down — but approval is still possible.
Debt-to-income ratio matters too. Most FHA lenders cap it at 43%, though some go higher with strong compensating factors like cash reserves.
Local decision guide
Use this guide to connect fha loans eligibility, lender expectations, and local market factors before comparing payment options in Chico.
Chico is one of the more affordable cities in Northern California. That makes FHA loans a strong fit here — you don't need a massive down payment to get in.
Butte County home prices stay well below coastal metros. FHA loan limits in this county give buyers real purchasing power without stretching into jumbo territory.
You need a 580 credit score to put 3.5% down. Drop below 580, and lenders require 10% down — but approval is still possible.
Not every lender prices FHA the same way. Retail banks often add overlays — stricter requirements beyond FHA minimums — that knock out otherwise qualified borrowers.
Wholesale lenders we access don't always carry those overlays. Shopping across 200+ lenders means finding who actually wants your file, not just who advertises FHA.
Chico has a strong renter base, partly from CSU Chico students and faculty. Many of those renters qualify for FHA and don't realize it.
Post-Camp Fire, some Butte County properties carry title or condition issues. FHA appraisers flag those hard. Know the property's history before you fall in love with it.
Conventional loans need at least 5% down and a stronger credit profile. FHA wins on entry cost, but carries mortgage insurance for the life of the loan in most cases.
If you're a veteran, VA loans beat FHA — zero down, no monthly mortgage insurance. USDA is worth a look too if the property sits in a qualifying rural area outside Chico proper.
Chico's rebuild activity since the Camp Fire has kept local contractors and appraisers busy. FHA appraisals in Butte County can take longer than normal — build that into your timeline.
Insurance is a real issue in Butte County. FHA requires homeowners insurance, and some carriers have pulled out of fire-risk areas. Sort your insurance before you open escrow, not after.
FHA loan limits are set annually by county. Contact us for the current Butte County limit — it determines your max FHA purchase price in Chico.
Yes, with an FHA 203k rehab loan. It wraps purchase and renovation costs into one loan — useful for Chico's older housing stock.
FHA requires an appraisal, not a full inspection. But always get an independent inspection — especially on older Butte County properties.
With less than 10% down, FHA mortgage insurance lasts the life of the loan. Put 10% or more down and it drops off after 11 years.
Possibly. FHA has provisions for extenuating circumstances. A broker can review your timeline and find lenders with the most flexibility.
It can be. Student loan debt affects your DTI calculation. We run those numbers across lenders to find who counts it most favorably.