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in Firebaugh, CA
Firebaugh sits in Fresno County's agricultural heartland, where both FHA and USDA loans help buyers finance homes. Most borrowers I work with here qualify for either program but don't know which saves them more money.
Both loans offer low-barrier entry for first-time buyers and modest incomes. The biggest difference is down payment versus income limits, and your choice depends on how much cash you have today.
FHA loans let you buy with 3.5% down and credit scores as low as 580. You pay an upfront mortgage insurance premium of 1.75% plus monthly MI that runs 0.55% to 0.85% annually for most borrowers.
There's no income limit with FHA, which helps if you earn too much for USDA but still need the low down payment. FHA works anywhere in Firebaugh, including newer developments that might fall outside USDA zones.
USDA loans require zero down payment if you're in an eligible rural area and earn below county income limits. For Fresno County, household income typically can't exceed $103,500 for families of four.
You pay a 1% upfront guarantee fee and 0.35% annual fee, which runs cheaper than FHA insurance. Properties must meet USDA's rural definition, though many Firebaugh homes qualify since the town has under 15,000 residents.
Down payment separates these programs first. USDA gives you 100% financing while FHA asks for 3.5% down, which on a $250,000 home means $8,750 in cash.
Monthly costs favor USDA if you qualify. That 0.35% annual fee beats FHA's 0.55% to 0.85% range, saving roughly $40 to $100 monthly on typical Firebaugh home prices. But USDA income limits knock out higher earners, and some newer subdivisions might not meet rural eligibility rules.
Pick USDA if you have minimal savings and your household income falls below Fresno County limits. The zero-down structure and lower monthly fee beat FHA when you qualify for both programs.
Choose FHA if you earn above USDA limits, need credit score flexibility below 640, or you're buying property that doesn't meet rural guidelines. You'll need that 3.5% down payment ready, but there's no income ceiling blocking your approval.
Most of Firebaugh qualifies as USDA-eligible rural area, but check specific addresses with a lender. Newer subdivisions near town limits sometimes fall outside approved zones.
Limits vary by household size and adjust annually. For a four-person household, expect caps around $103,500 gross income, though exact figures change with USDA updates.
Yes, FHA counts student loans in your debt ratio but has no specific restriction. USDA also accepts borrowers with student debt using standard underwriting rules.
Both programs have similar closing costs for appraisals, title, and escrow. USDA's 1% guarantee fee runs lower than FHA's 1.75% upfront premium, saving about $1,875 on a $250,000 loan.
FHA mortgage insurance stays for the loan life if you put down less than 10%. USDA annual fee remains until you refinance or pay off the loan completely.