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in Claremont, CA
Claremont sits in an interesting zone for government-backed loans. Parts of the city qualify for USDA financing, while FHA works anywhere in Los Angeles County.
Both programs help buyers with limited cash get into homeownership. The right choice depends on your location within Claremont and your income level.
FHA loans require just 3.5% down with credit scores as low as 580. You pay upfront mortgage insurance of 1.75% plus annual premiums of 0.55% to 0.85%.
These loans work anywhere in Claremont with no income caps. The trade-off is mortgage insurance that stays for the life of most loans unless you put down 10% or more.
FHA allows higher debt ratios than conventional loans. We regularly get borrowers approved at 50% debt-to-income if compensating factors are strong.
USDA loans require zero down payment in eligible zones. Most of northern Claremont near the foothills qualifies, but you need to verify your specific address.
Income limits apply based on household size. For Los Angeles County, most families must earn under $117,950 to qualify.
USDA charges a 1% upfront guarantee fee and 0.35% annual fee. That annual cost is significantly lower than FHA mortgage insurance, saving you money monthly.
The down payment gap is the obvious split. USDA wins with zero down versus FHA's 3.5%, but only if your property location and income qualify.
Monthly costs favor USDA. At 0.35% annual insurance versus FHA's 0.55% minimum, you save $83 per month on a $500,000 loan.
Processing time matters if you're in a competitive offer. USDA adds 2-3 weeks to closing compared to FHA because the guarantee comes from a smaller agency with fewer underwriters.
Check USDA eligibility first if you earn under $118K and are buying near the foothills. That zero down option preserves your cash for reserves and closing costs.
Go FHA if your property is in central or south Claremont where USDA doesn't qualify. Also choose FHA if your income exceeds USDA limits or you need to close in under 30 days.
Credit scores matter less here since both programs accept 580. The real deciding factors are your address, income, and whether you have 3.5% available for down payment.
Northern areas near the foothills typically qualify. We verify eligibility using your exact address through the USDA online map before starting your application.
FHA yes if the complex is FHA-approved. USDA only finances single-family homes and does not allow condos or townhomes.
Most households must earn under $117,950 annually. Larger families get slightly higher limits based on household size.
No, it stays for the loan life just like FHA. Your only exit is refinancing to conventional once you reach 20% equity.
FHA typically closes in 25-30 days. USDA adds 2-3 weeks due to smaller agency processing volume and stricter property reviews.