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in Larkspur, CA
Larkspur sits in one of California's priciest counties, which immediately creates problems for USDA loans. Most homes here exceed USDA purchase limits, and the area doesn't qualify as rural under federal guidelines.
FHA loans work anywhere in Marin County and allow higher purchase prices. You'll need at least 3.5% down, but you gain access to Larkspur's entire housing market without geographic restrictions.
FHA loans require 3.5% down with credit scores as low as 580. You pay upfront mortgage insurance of 1.75% plus annual premiums of 0.55% to 0.85% for the loan's life.
Debt ratios can stretch to 50% with strong compensating factors. FHA accepts two-year employment gaps, recent credit events, and non-occupant co-borrowers to boost buying power.
Loan limits in Marin County reach $1,089,300 for single-family homes. That covers most condos and starter homes in Larkspur, though larger properties often exceed this cap.
USDA loans offer zero down payment financing for eligible rural and suburban properties. Borrowers pay a 1% upfront guarantee fee and 0.35% annual fee, lower than FHA's insurance costs.
Income can't exceed 115% of the area median, which translates to roughly $126,000 for a household in Marin County. Properties must fall within USDA-designated eligible zones, which exclude most developed areas.
Credit score minimums typically land around 640 for automated approvals. USDA reviews the entire financial profile, not just score, and processing takes longer than conventional or FHA loans.
Location determines which loan works. USDA restricts properties to designated rural areas, while FHA approves any address in the county that meets property standards.
Down payment and insurance costs split differently. USDA requires nothing down but limits who qualifies by income. FHA requires 3.5% down but accepts higher earners without income caps.
Processing speed favors FHA. Most FHA files close in 30 days because lenders handle underwriting internally. USDA requires federal approval, adding 10 to 20 days to the timeline.
Check property eligibility first. Visit the USDA eligibility map with your target address. If the property shows ineligible, FHA becomes your only government loan option in this comparison.
Run the income test next. If your household exceeds $126,000 annually, USDA won't approve you regardless of property location. FHA has no income ceiling, just debt ratio requirements.
Consider closing speed and insurance costs. FHA costs more monthly but closes faster. USDA saves on insurance but adds weeks to escrow, which matters in competitive situations.
Most of Larkspur is ineligible because USDA designates it as urbanized. Check the USDA property eligibility map to confirm specific addresses.
USDA mortgage insurance costs 0.35% annually versus FHA's 0.55% to 0.85%. On a $500K loan, USDA saves roughly $80 to $200 monthly.
USDA typically requires 640+ for automated approval. FHA accepts 580 scores, making it more accessible for credit-challenged borrowers.
Yes. Both FHA and USDA accept gift funds from family members for down payment and closing costs with proper documentation.
FHA typically closes in 30 days. USDA adds federal review time, extending closings to 40-50 days on average.