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in San Rafael, CA
San Rafael sits in Marin County, where home prices push most buyers toward every financing advantage they can find. Both FHA and USDA loans offer government backing, but they serve completely different buyer profiles.
FHA works almost anywhere in San Rafael with just 3.5% down. USDA requires zero down but restricts eligible areas — and Marin's designation as a high-income county creates income limit hurdles most local buyers can't clear.
FHA loans accept credit scores as low as 580 for the minimum 3.5% down payment. You'll pay both upfront mortgage insurance (1.75% of the loan) and annual premiums for the life of most loans.
Loan limits in Marin County hit $1,149,825 for 2024, covering most single-family homes outside ultra-premium neighborhoods. FHA doesn't restrict income, so high earners qualify if debt ratios work.
USDA loans eliminate the down payment entirely and offer below-market rates. The catch: properties must fall in USDA-designated rural or suburban zones, and your household income can't exceed 115% of the area median.
Marin County's median income runs high enough that most San Rafael households exceed USDA limits. Even eligible areas require properties to pass USDA appraisal standards, which can flag older homes or those needing repairs.
Down payment separates these programs first. FHA requires 3.5% minimum while USDA needs nothing upfront — but USDA's income caps eliminate most Marin earners before you even check the property map.
Geographic restrictions matter more in expensive counties. FHA works anywhere in San Rafael. USDA designates specific zones, and much of Marin falls outside eligible boundaries due to population density and income levels.
Mortgage insurance costs differ significantly. FHA charges 1.75% upfront plus annual premiums that last for the loan term on most mortgages. USDA charges 1% upfront and lower annual fees, but only if you qualify under their tighter rules.
FHA makes sense for most San Rafael buyers who can scrape together 3.5% down. You avoid income caps, choose from the full housing inventory, and close faster without USDA's rural designation reviews.
USDA works only if your household income falls below area limits and your target property sits in an eligible zone. Check USDA's online map before house hunting — most of San Rafael won't qualify, and finding eligible listings wastes time you could spend on realistic options.
Run the numbers on both if you're borderline on income limits. USDA's zero down and lower rates save money, but FHA's broader eligibility means you'll actually find properties to buy. Most Marin brokers steer clients toward FHA by default because USDA rarely pencils in this county.
No. USDA restricts loans to designated rural and suburban zones. Most of San Rafael falls outside eligible areas due to population density.
USDA charges lower annual premiums than FHA. Both require upfront fees, but USDA's ongoing costs run about 0.35% versus FHA's 0.55% to 0.85%.
FHA requires 580 minimum for 3.5% down. USDA typically wants 640 or higher, though some lenders accept lower scores with compensating factors.
Limits vary by household size and shift annually. Most Marin households exceed the caps due to high area median income.
Yes, by refinancing to conventional once you hit 20% equity. FHA loans originated after 2013 carry insurance for life otherwise.