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in Hermosa Beach, CA
Hermosa Beach sits right on the Pacific Coast. That coastal location kills your chances of using a USDA loan here.
USDA loans require properties in designated rural areas. Los Angeles County beachfront cities don't qualify.
FHA loans work anywhere in Hermosa Beach. No property location restrictions apply to this program.
Most borrowers shopping these two options need to understand one critical fact: only FHA makes sense in this market.
FHA loans require 3.5% down with credit scores as low as 580. You'll pay mortgage insurance for the life of most loans.
The program allows higher debt-to-income ratios than conventional loans. Sellers can contribute up to 6% toward closing costs.
FHA works well for first-time buyers without large down payments. The upfront mortgage insurance premium adds 1.75% to your loan amount.
Rates vary by borrower profile and market conditions. Expect to pay ongoing monthly mortgage insurance premiums.
USDA loans offer zero down payment financing for eligible rural properties. Income limits restrict who qualifies.
The program targets households earning below area median income. Properties must sit in USDA-designated rural zones.
You'll pay an upfront guarantee fee of 1% plus annual fees. Credit requirements are more flexible than conventional loans.
Processing times run longer than FHA or conventional programs. Appraisers must confirm the property meets rural location requirements.
The biggest difference is location eligibility. USDA restricts loans to rural areas while FHA works everywhere.
Hermosa Beach is a developed coastal city in Los Angeles County. No part of the city qualifies as rural under USDA maps.
FHA requires 3.5% down while USDA offers zero down. That advantage disappears if the property doesn't qualify.
USDA caps borrower income while FHA has no income limits. Both programs charge upfront and monthly guarantee fees.
For Hermosa Beach buyers, this comparison is simple. USDA loans don't work here because the city isn't rural.
FHA becomes your best government-backed option with low down payments. The 3.5% down requirement beats conventional 5-20% minimums.
Check USDA eligibility maps before starting any application. You'll see Los Angeles County beach cities show as ineligible.
If you want zero down financing in Hermosa Beach, look at VA loans instead. That's the only zero-down program that works in urban coastal areas.
No. Hermosa Beach is an urban coastal city that doesn't meet USDA rural designation requirements. FHA or conventional loans work here instead.
USDA offers zero down but only in rural areas. FHA requires 3.5% down and works everywhere including Hermosa Beach.
Yes. FHA charges 1.75% upfront plus ongoing monthly premiums. USDA charges 1% upfront with lower monthly fees where eligible.
Both accept lower scores than conventional loans. FHA approves borrowers down to 580 credit scores with 3.5% down.
No. FHA has no income caps regardless of property location. USDA restricts borrowers to below-median area income where the program applies.