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in Pasadena, CA
Both FHA and USDA loans offer low barriers to entry, but only one works in Pasadena. USDA loans require properties in USDA-designated rural or suburban zones — and Pasadena doesn't qualify.
That said, understanding both programs helps if you're comparing neighborhoods across LA County. Some buyers stretch into eligible areas for zero down, while others stay urban with FHA's 3.5% minimum.
FHA loans let you buy with 3.5% down if your credit score hits 580. You pay upfront mortgage insurance (1.75% of the loan) plus annual premiums that last the life of the loan in most cases.
Credit flexibility is the draw. We close FHA deals regularly with scores in the 600s and debt-to-income ratios up to 50%. The property just needs to meet basic safety and livability standards.
USDA loans require zero down payment and competitive rates, but they come with strict geography and income caps. The property must sit in a USDA-eligible zone, and your household income can't exceed 115% of the area median.
Pasadena falls outside USDA boundaries. If you're willing to look at fringe areas in LA County — parts of Palmdale, Lancaster, or deeper into the Antelope Valley — USDA becomes an option.
The biggest split is location. FHA works anywhere in Pasadena, from Old Pasadena condos to Hastings Ranch single-family homes. USDA doesn't work in the city at all — you'd need to move outside urban LA County.
Down payment is the second factor. USDA offers zero down, while FHA asks for 3.5%. Both charge mortgage insurance that doesn't drop off without refinancing. Rates vary by borrower profile and market conditions, but they're often comparable when both programs are available.
If you're buying in Pasadena, FHA is your government-backed option. USDA isn't on the table unless you're willing to relocate to eligible zones an hour north or east of the city.
FHA makes sense when you want low down payment flexibility without geographic restrictions. We see it used across all Pasadena neighborhoods — especially by first-time buyers who can handle the 3.5% requirement but don't have 20% saved.
No. Pasadena is classified as an urban area and falls outside USDA-eligible zones. You'd need to look at rural parts of LA County to qualify.
Most lenders require 580 for 3.5% down. Scores between 500-579 may qualify with 10% down, but few lenders approve those applications.
Only if you put down 10% or more — then it drops after 11 years. With 3.5% down, it stays for the loan's life unless you refinance.
No. FHA doesn't cap your income like USDA does. You just need to qualify based on debt-to-income ratio and employment history.
Rates vary by borrower profile and market conditions. When both are available, they're usually within a quarter point of each other.