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in Los Angeles, CA
Most Los Angeles buyers won't qualify for USDA financing because the city sits well outside eligible rural boundaries. FHA loans dominate here for good reason—they work in urban markets and offer 3.5% down with credit scores as low as 580.
USDA targets rural areas with zero-down financing, but in LA County you'd need to look at the far edges—think Antelope Valley or parts of Santa Clarita. For buyers in the city proper, FHA is your government-backed option.
FHA loans require just 3.5% down if your credit score hits 580. You'll pay an upfront mortgage insurance premium of 1.75% plus annual premiums between 0.55% and 0.80% for the life of most loans.
Debt-to-income ratios can stretch to 50% or higher with strong compensating factors. Sellers can contribute up to 6% toward closing costs, making these loans accessible for buyers with limited cash reserves.
USDA loans offer zero down payment but require properties in designated rural areas. In LA County, that eliminates nearly all city neighborhoods and most suburbs—you're looking at outlying areas only.
Income limits apply based on household size and county median. You'll pay a 1% upfront guarantee fee plus 0.35% annual fee, lower than FHA's ongoing costs if you qualify for the program.
Location kills USDA eligibility for 95% of LA County buyers. FHA works on condos in Downtown, houses in Silver Lake, everything across the metro area without geographic restrictions.
Down payment differs sharply—USDA needs nothing down, FHA requires 3.5% minimum. But FHA's mortgage insurance costs more over time, and USDA adds income caps that don't apply to FHA borrowers at any earning level.
If you're buying anywhere in Los Angeles proper, FHA is your only government option between these two. USDA simply doesn't apply to urban properties, and the city sits squarely outside eligible zones.
For buyers in far northern LA County—Palmdale, Lancaster, or unincorporated areas—check USDA eligibility first. If you qualify by location and income, zero down beats 3.5% down every time despite the geographic limitations.
No. The city of Los Angeles sits entirely outside USDA-eligible zones. Only rural parts of LA County qualify, typically 50+ miles from Downtown.
USDA charges 0.35% annually versus FHA's 0.55%-0.80%. Over a 30-year loan, USDA saves thousands if you qualify for the program.
Yes. FHA permits up to 6% seller contributions, USDA allows 6% as well. Both programs help buyers cover closing costs.
FHA requires 580 for 3.5% down, 500 for 10% down. USDA typically needs 640 minimum, though some lenders accept lower scores manually.
USDA lets you refinance to conventional once you hit 20% equity. FHA loans closed after 2013 carry insurance for the loan's full term.