Question 1

Does Chico qualify for USDA loans?

Accepted Answer

Parts of Butte County outside Chico city limits may qualify. Use the USDA eligibility map to check your exact address before assuming.

Question 2

Which loan has lower mortgage insurance?

Accepted Answer

USDA's annual fee is typically lower than FHA's. FHA also charges upfront mortgage insurance at closing, adding to your costs.

Question 3

Can I use USDA if I have a higher income?

Accepted Answer

No. USDA sets household income limits by county and family size. Exceed the cap and you're ineligible, regardless of the property location.

Question 4

What credit score do I need for each loan?

Accepted Answer

FHA allows scores as low as 500 with 10% down, or 580 with 3.5% down. Most USDA lenders want at least a 640 score.

Question 5

Which loan closes faster?

Accepted Answer

FHA generally closes faster. USDA loans require an extra approval step from the USDA office, which can add days to weeks.

Question 6

Can I use either loan to buy a fixer-upper?

Accepted Answer

FHA has a rehab option called the 203k loan. USDA does not allow purchases of homes needing significant repairs to meet eligibility.

FHA vs USDA Loans in Chico, CA