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in Williams, CA
Williams sits in a USDA-eligible zone, which means you can choose between FHA's 3.5% down and USDA's zero down. Most borrowers here qualify for both programs, so the decision comes down to upfront cash and monthly costs.
FHA works anywhere in Williams and accepts higher debt ratios. USDA requires income verification against county limits and only finances properties in designated rural areas, but you keep more money in your pocket at closing.
FHA loans require 3.5% down with a 580 credit score, or 10% down if your score sits between 500-579. You'll pay an upfront mortgage insurance premium of 1.75% plus annual premiums between 0.55%-0.85% depending on your down payment and loan amount.
Debt ratios can stretch to 50% with compensating factors, which helps if you're carrying student loans or car payments. FHA doesn't care about your income level or property location within Williams—if the home appraises and you qualify, you're approved.
USDA loans require zero down payment but limit eligibility to households earning below 115% of Colusa County's median income. You'll pay a 1% upfront guarantee fee and 0.35% annual fee—significantly cheaper than FHA's ongoing insurance.
Credit scores as low as 580 get approved through manual underwriting, though most lenders prefer 640 for automated approval. The property must sit in a USDA-designated rural area, which covers most of Williams outside any dense commercial zones.
The down payment split is obvious: USDA requires nothing upfront while FHA needs at least 3.5%. But USDA's income caps disqualify higher earners—a family of four in Colusa County can't exceed roughly $103,500 in annual household income.
Monthly costs favor USDA significantly. That 0.35% annual fee costs about $146 per month on a $500,000 loan, compared to $347 monthly for FHA's 0.83% rate on the same balance. Over 30 years, you're saving $72,000 in mortgage insurance with USDA.
Choose USDA if your household income falls below the county limit and you're buying in an eligible area. You'll avoid the down payment entirely and cut your monthly payment by $200 or more compared to FHA.
Pick FHA if you earn too much for USDA, need to buy in a restricted zone, or carry higher debt ratios that USDA won't approve. FHA also processes faster since it doesn't require the rural property eligibility verification that adds a week to USDA loans.
Most of Williams qualifies as rural under USDA maps, but check the specific address. Dense commercial zones near downtown may fall outside eligible boundaries.
Limits vary by household size and change annually. A family of four typically can't exceed $103,500 in total household income to qualify for USDA financing.
Yes. USDA's 0.35% annual fee runs about $146 monthly on a $500,000 loan versus $347 monthly for FHA's 0.83% rate at the same balance.
FHA typically closes 3-5 days faster since it skips the USDA rural eligibility review. Both programs take 30-45 days from application to funding.
FHA requires 11 years of payments before dropping insurance if you put down less than 10%. USDA charges the fee for the loan's life—refinance to conventional to eliminate it.