Question 1

Does USDA cover properties in central Novato?

Accepted Answer

Some Novato areas qualify — others don't. Check the USDA eligibility map by address. Outer and less-dense areas have the best shot.

Question 2

What credit score do I need for each loan?

Accepted Answer

FHA accepts 580 with 3.5% down. USDA typically wants 640 at most lenders, though guidelines allow lower.

Question 3

Can I use gift funds for the FHA down payment?

Accepted Answer

Yes. FHA allows the full 3.5% to come from a gift. USDA needs no down payment, so this isn't a factor there.

Question 4

Does USDA have income limits in Marin County?

Accepted Answer

Yes. Marin County limits are higher than most California counties due to area median income — but limits still exist. Verify your household size and income.

Question 5

Which loan has lower monthly mortgage insurance?

Accepted Answer

USDA's annual fee runs lower than FHA's mortgage insurance premium. Over a 30-year loan, that gap adds up.

Question 6

Can I refinance later from FHA or USDA into a conventional loan?

Accepted Answer

Yes on both. Once you build enough equity and improve your credit, refinancing out of mortgage insurance is a common exit strategy.

FHA vs USDA Loans in Novato, CA: Which One Works for You?