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in Malibu, CA
Malibu sits in a unique spot where most properties won't qualify for USDA financing. The program targets rural areas, and coastal LA County isn't on the USDA's eligible map.
FHA loans work anywhere in Malibu, but you'll need to confirm USDA eligibility first. Most borrowers here default to FHA because of location restrictions alone.
FHA loans require 3.5% down and accept 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%.
These loans cap at $1,149,825 in Los Angeles County for 2024. That covers many Malibu properties, though oceanfront homes typically exceed this limit.
USDA loans require zero down payment and target households earning below 115% of area median income. The catch: properties must be in USDA-designated rural zones.
Borrowers pay a 1% upfront guarantee fee and 0.35% annual fee. These fees are lower than FHA, but geographic restrictions disqualify most Malibu addresses.
Location eligibility splits these programs. USDA requires rural or suburban designation, while FHA works in any area where the property meets basic standards.
FHA requires a down payment but has no income cap. USDA offers zero down but restricts household income to 115% of median, which is roughly $140,000 for LA County.
Check USDA's eligibility map before comparing rates. If your Malibu property doesn't qualify geographically, FHA is your only government-backed low-down-payment option.
For the rare Malibu property in a USDA zone, run the math on zero down versus 3.5% down with FHA. USDA saves upfront cash but limits income, which matters if you're a high earner buying a modest home.
No. Most Malibu addresses fall outside USDA-eligible zones because the program targets rural areas, not coastal LA County.
Household income can't exceed 115% of area median, roughly $140,000 for LA County. FHA has no income cap.
USDA charges 0.35% annually versus FHA's 0.55%-0.80%. Both require upfront fees, but USDA costs less over time.
FHA caps at $1,149,825 in LA County. Many oceanfront and hillside properties exceed this limit and need conventional or jumbo financing.
USDA allows removal after reaching 20% equity and 11 years of payments. FHA requires insurance for the loan's full term if you put down less than 10%.