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in Palmdale, CA
Palmdale sits in a sweet spot where both FHA and USDA loans can work. Most of the city qualifies for USDA financing despite being part of LA County.
Both programs target first-time buyers and moderate-income households. The right choice depends on your down payment savings and where exactly you're buying in Palmdale.
FHA loans work anywhere in Palmdale with just 3.5% down and credit scores as low as 580. You'll pay an upfront mortgage insurance premium of 1.75% plus annual premiums that add $150-250 monthly on a typical loan.
FHA lets you buy condos, townhomes, or single-family homes without geographic restrictions. Sellers know FHA deals close reliably, which matters in competitive situations.
USDA loans require zero down payment but limit household income to $103,500 for most Palmdale families. Only certain areas qualify—generally east of the SR-14 corridor and north of Avenue P.
You'll pay a 1% upfront guarantee fee plus annual fees around $35-50 monthly. That's substantially less than FHA insurance, which offsets the geographic restrictions.
The down payment gap is the obvious split—3.5% on FHA versus nothing on USDA. On a $450,000 purchase, that's $15,750 versus zero upfront.
USDA restricts both location and income while FHA doesn't. But USDA's monthly costs run $200-250 less thanks to cheaper mortgage insurance. Over 30 years, that savings eclipses the down payment difference.
Check USDA eligibility first if you're buying east or north Palmdale and earn under the income limit. Zero down and lower monthly costs make it the obvious winner when available.
Choose FHA if you're buying west Palmdale, earn over USDA limits, or need the flexibility to close faster. FHA also handles credit issues below 620 better than USDA does in practice.
No. Generally areas east of SR-14 and north of Avenue P qualify, but you need to check the USDA eligibility map for specific addresses before making offers.
USDA runs $200-250 less monthly due to cheaper mortgage insurance. That advantage holds even though both programs offer similar interest rates.
Yes. FHA allows 100% of your down payment to come from family gifts, making the 3.5% requirement easier to meet than it appears.
Most households cap at $103,500 annual income. Families of five or more get higher limits around $136,600 depending on exact household size.
FHA typically closes 3-5 days quicker. USDA adds extra income verification steps that extend timelines, though both usually complete within 30 days.