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in Chico, CA
Both FHA and USDA loans are government-backed. Both have low or no down payment options. But they serve very different borrowers.
Chico sits in Butte County, where parts of the area qualify for USDA eligibility. That makes this comparison especially relevant for local buyers.
FHA loans require just 3.5% down with a 580 credit score. Drop to 500 and you still qualify — but you'll need 10% down.
FHA works anywhere. No rural requirement, no income cap. It's the go-to loan for first-time buyers with limited savings or bruised credit.
USDA loans require zero down. That's not a typo. If you qualify, you're buying with no down payment at all.
The catch: the property must be in an eligible rural or suburban area, and your household income must fall under USDA limits for Butte County.
Local decision guide
Use this comparison to weigh FHA Loans and USDA Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Chico.
Both FHA and USDA loans are government-backed. Both have low or no down payment options. But they serve very different borrowers.
Chico sits in Butte County, where parts of the area qualify for USDA eligibility. That makes this comparison especially relevant for local buyers.
FHA loans require just 3.5% down with a 580 credit score. Drop to 500 and you still qualify — but you'll need 10% down.
Down payment is the biggest split. USDA is zero down. FHA is 3.5% minimum. On a $350,000 home, that's $12,250 out of pocket with FHA.
USDA mortgage insurance costs less than FHA's over time. But USDA's location and income rules knock many Chico buyers out before they even start.
If you're buying inside Chico city limits, USDA likely won't work. Most urban Chico addresses fall outside eligible zones. Go FHA.
If you're open to areas just outside Chico — parts of Butte County do qualify — and your household income is under the USDA limit, zero down is hard to beat.
Parts of Butte County outside Chico city limits may qualify. Use the USDA eligibility map to check your exact address before assuming.
USDA's annual fee is typically lower than FHA's. FHA also charges upfront mortgage insurance at closing, adding to your costs.
No. USDA sets household income limits by county and family size. Exceed the cap and you're ineligible, regardless of the property location.
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.
FHA generally closes faster. USDA loans require an extra approval step from the USDA office, which can add days to weeks.
FHA has a rehab option called the 203k loan. USDA does not allow purchases of homes needing significant repairs to meet eligibility.