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in Calabasas, CA
Calabasas sits in the gray zone where government loan eligibility gets interesting. Most of the city doesn't qualify for USDA financing due to population density, but pockets near the city limits might.
Both FHA and USDA offer competitive terms compared to conventional loans. The real question is which program you can actually use and which saves you more money upfront.
FHA loans require just 3.5% down with credit scores as low as 580. You'll pay an upfront mortgage insurance premium of 1.75% plus annual premiums that range from 0.55% to 0.80% of your loan amount.
These loans work in any Calabasas neighborhood regardless of home price or location. Sellers can contribute up to 6% toward your closing costs, which matters in competitive markets.
The mortgage insurance never drops off on loans over 90% loan-to-value. That's the trade-off for the low entry barrier and flexible credit requirements.
USDA loans offer zero down payment financing with no maximum purchase price. The catch is strict geographic and income limits that disqualify most Calabasas properties.
The guarantee fee is 1% upfront plus 0.35% annually. That's significantly cheaper than FHA mortgage insurance, and the annual fee drops off once you hit 80% loan-to-value.
Income limits cap eligibility at roughly $103,500 for a household of 1-4 or $136,600 for 5-8 people. Most Calabasas buyers exceed these thresholds.
The location question eliminates USDA for nearly everyone in Calabasas. The USDA defines eligible areas as rural or low-density suburban, and most of this city doesn't qualify.
Down payment is where they split hardest. USDA requires nothing upfront while FHA wants 3.5%. On a $900,000 home, that's $31,500 you need for FHA versus zero for USDA.
Mortgage insurance costs less with USDA long-term. The 0.35% annual fee beats FHA's 0.55%-0.80%, and USDA's fee can be removed while FHA's typically cannot.
Income limits only affect USDA. FHA has no income caps, so high earners can use it freely. USDA cuts off most Calabasas household incomes.
Check USDA eligibility first at the USDA property map. If your target home qualifies and your income falls under the limits, USDA wins on cost. Zero down plus lower fees makes it the better financial choice.
Most Calabasas buyers will use FHA by default because USDA simply isn't available. The 3.5% down requirement still beats conventional 10-15% minimums for buyers with limited savings.
Run the numbers on mortgage insurance over your expected ownership period. If you plan to stay 10+ years, FHA's permanent insurance becomes expensive compared to refinancing out of it later.
No, most of Calabasas is ineligible for USDA financing. Only specific low-density areas near city borders might qualify based on USDA's rural designation rules.
USDA typically has lower payments due to zero down payment and cheaper mortgage insurance. FHA payments run higher because of the 3.5% down requirement and more expensive insurance.
FHA officially goes down to 580 credit scores. USDA doesn't set a minimum but most lenders want 640, making it slightly harder to qualify for.
USDA insurance drops off at 80% loan-to-value. FHA insurance is permanent on loans over 90% LTV, which covers most purchases with 3.5% down.
FHA has loan limits around $644,000 in Los Angeles County. USDA has no price cap, but the geography and income restrictions eliminate most expensive properties anyway.