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in Rolling Hills Estates, CA
Rolling Hills Estates sits in an upscale area of Palos Verdes Peninsula where most properties exceed USDA loan limits. FHA loans work anywhere, while USDA eligibility depends on location and income caps that often disqualify buyers here.
Both programs offer low down payments backed by the federal government. The right choice depends on where you're buying and what you earn, not just your credit score or savings.
FHA loans require 3.5% down with a 580 credit score or 10% down with scores between 500-579. You pay upfront mortgage insurance of 1.75% plus annual premiums of 0.55% to 0.85% for most loan amounts.
These loans work on single-family homes, condos, and multi-units up to four units anywhere in the country. Sellers can contribute up to 6% toward your closing costs, which helps offset the upfront insurance premium.
USDA loans require zero down payment for homes in designated rural areas where household income stays below 115% of median income. Properties must meet USDA standards and you pay a 1% upfront guarantee fee plus 0.35% annual fee.
The program targets moderate-income buyers in less densely populated areas. Most of Rolling Hills Estates does not qualify as rural under USDA maps, and local incomes often exceed program limits.
FHA wins on flexibility: any location, higher income limits, and easier property approval. USDA wins on cost if you qualify: no down payment and cheaper mortgage insurance that drops off after equity hits 20%.
The dealbreaker for most Rolling Hills Estates buyers is location eligibility. USDA restricts you to specific zones that exclude most developed Palos Verdes communities, while FHA accepts properties countywide.
Choose USDA if you're buying in an outlying area that qualifies and your household income falls below the cap. Check the USDA eligibility map first because most homes near Rolling Hills Estates won't qualify as rural.
Choose FHA when location or income disqualifies you from USDA, or when buying a condo or multi-unit property. The higher upfront cost buys you flexibility on where and what you purchase.
Most of Rolling Hills Estates is too developed to meet USDA rural designation. Check the USDA property eligibility map before applying.
USDA has no down payment and lower annual mortgage insurance at 0.35%. FHA costs more monthly but works on more properties.
Neither program allows investment properties. Both require you to occupy the home as your primary residence.
FHA accepts 580 scores with 3.5% down. USDA typically requires 640 minimum though some lenders approve lower scores manually.
FHA has no income caps. USDA limits household income to 115% of area median, which often disqualifies higher earners in LA County.