Question 1

Can I use USDA if my household income is $125,000?

Accepted Answer

Possibly. USDA's income limit is set per household size and published annually for this county. At $125,000, you're near the threshold. A family of three may qualify; a family of five likely exceeds the cap.

Question 2

Does FHA mortgage insurance ever go away?

Accepted Answer

No. FHA mortgage insurance (MIP) stays on the loan for the full 30 years, regardless of equity. This is different from conventional PMI, which cancels at 80% LTV. Budget for MIP as a permanent monthly cost.

Question 3

What's the real difference in monthly payment between FHA and USDA?

Accepted Answer

USDA's zero down and no annual insurance typically mean a lower monthly payment than FHA on the same purchase price. The exact difference depends on your loan amount, rate, and property taxes. USDA wins on payment; FHA wins on flexibility.

Question 4

Can I buy a condo or investment property with USDA?

Accepted Answer

No. USDA requires a single-family, owner-occupied home. Condos, townhomes, and investment properties don't qualify. FHA accepts both primary residences and some condos, making it the broader choice.

Question 5

Do I need perfect credit for either program?

Accepted Answer

No. FHA typically accepts credit scores of 580 and up; some lenders go lower with compensating factors. USDA is similar—credit score alone won't disqualify you. Both programs care more about recent payment history than an old blemish.

FHA vs USDA Loans in Oakley: Which Fits Your Situation?