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in Clearlake, CA
Clearlake sits in Lake County, which qualifies for USDA loans across most neighborhoods. That puts you in the rare position of choosing between two powerful government-backed loan programs.
FHA requires 3.5% down but works anywhere in the city. USDA requires zero down but caps your income and limits where you can buy.
Most Clearlake buyers qualify for one or both programs. The right choice depends on your cash position, income level, and target property location.
FHA loans require 3.5% down with a 580 credit score or 10% down with scores between 500-579. You can buy anywhere in Clearlake with no income caps.
The upfront mortgage insurance costs 1.75% of your loan amount, added to your balance. Monthly mortgage insurance runs 0.55%-0.85% annually, depending on your down payment and loan amount.
Sellers can contribute up to 6% toward your closing costs. You can use gift funds for your entire down payment and closing costs if needed.
USDA loans require zero down payment if your household income falls within program limits. For Lake County, limits vary based on household size and typically range from $103,500 to $136,850 for most families.
You pay a 1% upfront guarantee fee plus 0.35% annual fee. That annual cost runs significantly lower than FHA mortgage insurance, saving you money each month.
Properties must meet USDA rural designation requirements. Most of Clearlake qualifies, but you need to verify the specific address through the USDA eligibility map before making an offer.
Down payment separates these programs first. FHA needs 3.5% minimum while USDA requires nothing upfront. On a $300,000 home, that's $10,500 versus $0 out of pocket.
USDA income limits eliminate high earners from the program entirely. FHA has no income ceiling, so you qualify based purely on credit and debt ratios.
Monthly costs favor USDA for most borrowers. The 0.35% annual fee beats FHA's 0.55%-0.85% range, often saving $100+ per month on identical loan amounts.
Property location matters only for USDA. FHA works on any property type in any Clearlake neighborhood. USDA restricts you to eligible rural and suburban zones.
Choose USDA if you meet the income limits and your target property qualifies. Zero down and lower monthly fees create the strongest financial advantage for most Clearlake buyers.
Pick FHA when your income exceeds USDA caps or you're buying in a non-eligible area. FHA also makes sense if you need the flexibility to refinance out of mortgage insurance later.
Run both scenarios with your broker using actual numbers. Income verification and property eligibility sometimes eliminate one option before you compare rates and fees.
Most Clearlake properties qualify, but not all. Check the specific address on the USDA eligibility map before making an offer to confirm the location meets rural designation requirements.
USDA typically creates lower payments due to 0.35% annual fees versus FHA's 0.55%-0.85%. On a $300,000 loan, USDA saves roughly $100-150 monthly compared to FHA.
FHA accepts 580 credit scores officially. USDA has no official minimum, but most lenders require 640 for automated approval in practice.
Limits vary by household size and update annually. Most families face caps between $103,500 and $136,850 for Lake County based on current program guidelines.
FHA requires mortgage insurance for the loan's life with 3.5% down. USDA allows removal after reaching 80% equity, giving you an exit strategy on the monthly fee.
FHA typically closes in 30-40 days. USDA adds 5-10 days for rural designation verification and income certification, averaging 35-50 days to fund.