Loading
in Reedley, CA
Reedley buyers often choose between FHA and USDA loans because both offer low barriers to entry. The main split: FHA requires 3.5% down but works anywhere, while USDA offers zero down but only in eligible rural areas.
Most of Reedley qualifies for USDA financing, which changes the calculation entirely. If you can hit USDA income limits, you skip the down payment and monthly mortgage insurance drops after a few years.
FHA loans let you buy anywhere in Reedley with just 3.5% down if your credit hits 580. You pay upfront mortgage insurance (1.75% of the loan) plus annual premiums that last the life of the loan.
Credit between 500-579 still qualifies but requires 10% down. Sellers can cover up to 6% of closing costs, which helps when cash is tight.
USDA loans require zero down payment in designated rural areas, which includes most of Reedley outside the core downtown. You pay 1% upfront guarantee fee and 0.35% annual fee, both lower than FHA's insurance costs.
Income can't exceed 115% of area median, which runs around $110,000 for a family of four in Fresno County. The property must be your primary residence and fall within USDA-eligible zones.
Down payment separates these loans immediately. USDA's zero down beats FHA's 3.5% requirement, saving you roughly $7,000 on a $200,000 Reedley home.
Monthly costs favor USDA too. Annual mortgage insurance runs 0.35% versus FHA's 0.55%-0.85%. On that same $200,000 loan, you save $40-$100 monthly with USDA.
Income limits create the main USDA barrier. A household earning $120,000 gets denied for USDA but qualifies easily for FHA anywhere in the city.
Choose USDA if you're buying in eligible Reedley areas and your income stays under limits. Zero down plus lower monthly fees makes this the stronger deal when you qualify.
Go FHA if you earn too much for USDA, need flexibility on property location, or want faster closing times. FHA processes run smoother because more lenders handle the volume daily.
Check USDA eligibility first using the property address. If the home qualifies and your income fits, USDA wins on pure economics.
Yes, areas outside central Reedley typically qualify as eligible rural zones. Check the specific property address on the USDA eligibility map before making offers.
Household income can't exceed roughly $110,000 for a family of four, based on 115% of area median income. Limits adjust based on household size.
USDA typically costs less monthly due to lower mortgage insurance rates. You save $40-$100 per month compared to FHA on similar loan amounts.
Yes, FHA has no income caps. High earners who exceed USDA limits still qualify for FHA with just 3.5% down.
FHA usually closes quicker because more lenders process high volumes daily. USDA requires additional property eligibility verification that adds processing time.
Yes. FHA allows up to 6% seller concessions, while USDA permits up to 6% as well for qualified buyers.