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in Dos Palos, CA
Most Dos Palos buyers choose between conventional and FHA loans. Both work for single-family homes and ag-area properties, but they have different rules.
The right loan depends on your credit score and down payment savings. FHA accepts lower scores but costs more long-term. Conventional demands stronger credit but saves you money over time.
Conventional loans require 620+ credit and at least 3% down. You pay PMI only until you reach 20% equity, then it drops off automatically.
These loans cap at conforming limits set by Fannie Mae and Freddie Mac. In Merced County, that's $806,500 for 2025. You get competitive rates if your credit is solid.
FHA loans accept credit scores as low as 580 with 3.5% down. Some lenders go to 500 if you put 10% down, but that's rare in practice.
You pay two types of mortgage insurance with FHA. Upfront MIP is 1.75% of the loan amount. Annual MIP stays for the loan's life if you put less than 10% down.
Credit standards separate these loans most. FHA forgives past credit issues faster than conventional. Bankruptcy or foreclosure? FHA lets you qualify in 2-3 years. Conventional makes you wait 4-7 years.
Mortgage insurance costs favor conventional long-term. FHA charges upfront MIP plus annual premiums that never drop off. Conventional PMI disappears at 20% equity, cutting your monthly payment permanently.
Choose FHA if your credit sits between 580-680 or you have recent credit issues. The lower score requirement gets you approved now, even if insurance costs more.
Go conventional if you have 680+ credit and stable income. You'll pay less monthly once you hit 20% equity. For buyers planning to stay long-term in Dos Palos, that savings adds up to thousands.
Yes, FHA works for standard residential properties in rural Merced County areas. The home must meet FHA safety standards and appraisal requirements.
Most lenders want 580+ for FHA and 620+ for conventional. Scores above 680 unlock better conventional rates and terms.
Only if you put 10%+ down, then it drops after 11 years. With 3.5% down, MIP stays for the loan's entire life.
Both take 30-45 days typically. FHA requires more property inspections, which can add a week if issues come up.
Yes, once you build equity and improve your credit. Most borrowers refinance within 3-5 years to drop FHA mortgage insurance.