Question 1

Do I really need zero down to qualify for a USDA loan?

Accepted Answer

Yes — zero down is the defining feature of USDA loans. You can put money down if you want, but it's not required. The program exists specifically to eliminate the down payment barrier for rural homebuyers.

Question 2

What's the monthly payment on a $200,000 USDA loan in Los Banos?

Accepted Answer

At 6.125% interest, principal and interest run $1,215 per month on a $200,000 loan. Add the annual USDA fee ($700/year, or about $58/month), property taxes, homeowners insurance, and HOA if applicable. Your total housing payment will be higher.

Question 3

Can I get a USDA loan if I earn $80,000 a year?

Accepted Answer

No — USDA income limits cap at 115% of Merced County's median income, which is roughly $75,000 for a family of four. At $80,000 household income, you'd exceed the limit. Conventional or FHA loans would be your options instead.

Question 4

Is there mortgage insurance on a USDA loan?

Accepted Answer

No PMI. Instead, USDA charges an annual fee of 0.35% of your loan balance. On a $200,000 loan, that's $700 per year. It's simpler than PMI because it never cancels — it runs for the life of the loan.

Question 5

How long does it take to close a USDA loan in Los Banos?

Accepted Answer

Underwriting typically takes 30-45 days. The main requirement is a USDA property appraisal and income verification. If the address qualifies and your finances check out, the process moves steadily.

USDA Loans in Los Banos: Zero-Down Financing for Rural California Homebuyers