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in Bakersfield, CA
Bakersfield homebuyers have two powerful government-backed loan options to consider. Both FHA and USDA loans offer affordable paths to homeownership with flexible requirements, but they serve different needs and property locations.
Understanding which program matches your financial situation and home search area can save you thousands in upfront costs. The right choice depends on where you want to live in Kern County and your down payment capacity.
FHA loans require just 3.5% down and accept credit scores as low as 580 for most borrowers. The Federal Housing Administration insures these mortgages, making lenders more willing to work with first-time buyers and those rebuilding credit.
You can use FHA financing anywhere in Bakersfield, from central city neighborhoods to outlying areas. The program charges both upfront and annual mortgage insurance premiums, which protect the lender if you default.
Debt-to-income ratios can reach 50% in many cases, giving you more buying power than conventional loans. FHA also allows gift funds for your down payment from family members or approved sources.
USDA loans offer zero down payment financing for eligible properties in designated rural and suburban areas. The program targets moderate-income buyers, with household income limits based on family size and location.
Many parts of Kern County outside central Bakersfield qualify for USDA financing. You must meet income requirements and buy a home in an approved zone, which the USDA updates regularly based on population density.
The program charges a lower upfront guarantee fee than FHA and an annual fee that typically costs less than FHA mortgage insurance. USDA loans require no down payment, making them ideal if you have limited savings but stable income.
The most significant difference is down payment: USDA requires nothing down while FHA needs 3.5%. However, USDA restricts where you can buy and caps your household income, while FHA has no such limitations.
USDA loans typically cost less monthly because of lower guarantee fees, but the eligibility requirements are stricter. FHA accepts lower credit scores and works in any Bakersfield neighborhood, giving you more property options.
Processing times differ too. USDA loans often take longer to close because the agency must review and approve each application. FHA loans typically move faster through underwriting since lenders handle most of the process directly.
Choose USDA if you want to buy in eligible suburban or rural parts of Kern County, meet the income requirements, and prefer zero down payment. Check the USDA eligibility map first to confirm your target area qualifies.
Pick FHA if you need flexibility in location, have a lower credit score, or want to buy in central Bakersfield where USDA may not apply. The 3.5% down payment is still manageable for many buyers, especially with gift funds.
Some borrowers qualify for both programs. Compare total costs including monthly insurance premiums and upfront fees. Your loan officer can run scenarios showing your payment and closing costs under each program.
Most of central Bakersfield does not qualify for USDA financing due to population density. However, many suburban and rural areas in Kern County are eligible. Check the USDA property eligibility map for specific addresses.
USDA loans typically have lower monthly payments due to reduced guarantee fees and no down payment requirement. However, rates vary by borrower profile and market conditions, so compare actual quotes for your situation.
FHA officially requires 580 for 3.5% down, though some lenders prefer 620. USDA typically requires 640 minimum. Both programs may accept lower scores with compensating factors and manual underwriting.
FHA loans typically close in 30-45 days. USDA loans often take 45-60 days because the agency must review each file. Plan extra time for USDA if you have a tight closing deadline.
FHA loans originated after 2013 require mortgage insurance for the loan life unless you refinance. USDA loans can drop the guarantee fee after the loan-to-value reaches 80% through payments, not appreciation.