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in Delano, CA
Delano homebuyers often qualify for government-backed mortgages that make homeownership more accessible. Both FHA and USDA loans offer lower down payments and flexible credit requirements compared to conventional financing.
The right choice depends on your location within Kern County, income level, and how much you can put down. Understanding these two programs helps you save money and choose the path that gets you into a home faster.
FHA loans require just 3.5% down for buyers with credit scores of 580 or higher. The Federal Housing Administration insures these mortgages, which lets lenders offer more lenient approval standards than conventional loans.
You'll pay mortgage insurance premiums both upfront and monthly throughout the loan term. FHA loans work anywhere in Delano and surrounding areas with no income limits, making them accessible to most buyers.
These loans accommodate higher debt-to-income ratios, often up to 50% in some cases. Sellers can contribute up to 6% toward your closing costs, reducing your out-of-pocket expenses at closing.
USDA loans offer zero down payment financing for eligible rural and suburban properties in designated areas of Kern County. Parts of Delano may qualify depending on the specific location and USDA zone maps.
The program sets income limits based on household size and county median income. You'll pay a smaller upfront guarantee fee compared to FHA, plus an annual fee that's typically lower than FHA mortgage insurance.
USDA loans require the property to be your primary residence in an eligible rural area. Credit requirements are flexible, and you can finance the upfront guarantee fee into your loan amount to minimize cash needed at closing.
The biggest difference is down payment: FHA requires 3.5% while USDA offers zero down. However, USDA restricts both your income and property location, while FHA has no such limits anywhere in Delano.
Mortgage insurance costs differ significantly. FHA charges 1.75% upfront plus 0.55% to 0.85% annually. USDA charges 1% upfront and 0.35% annually, making it cheaper over time if you qualify.
Processing times vary between programs. USDA loans often take longer due to property eligibility verification and income documentation requirements. FHA loans typically close faster with less paperwork.
Choose USDA if your property location qualifies and your household income falls within program limits. The zero down payment and lower insurance costs can save thousands over the life of your loan.
FHA makes more sense if you need certainty about location, your income exceeds USDA limits, or you want faster closing. The slightly higher costs buy you flexibility and wider property selection throughout Delano.
Many Delano buyers start by checking USDA eligibility first, then fall back to FHA if needed. Talk with a Kern County mortgage specialist who can verify your property address and income against both programs' requirements.
Not all Delano properties qualify for USDA financing. Eligibility depends on USDA zone maps that designate rural and suburban areas. Your lender can verify if a specific address qualifies before you make an offer.
USDA sets income limits based on household size and area median income. These limits change annually and vary by location within Kern County. Contact a local lender for current income thresholds that apply to your situation.
For most FHA loans with less than 10% down, mortgage insurance remains for the loan's life. You can refinance to conventional financing later to remove it once you build sufficient equity.
Both programs accept credit scores as low as 580, though individual lenders may set higher minimums. FHA and USDA both offer flexibility for buyers with past credit issues or limited credit history.
You cannot refinance an existing FHA loan into a USDA loan. USDA financing is only available for home purchases in eligible areas. However, you could refinance either loan to conventional financing once you build equity.