Question 1

Does Merced qualify for USDA loans?

Accepted Answer

Parts of Merced County are USDA-eligible. The city of Merced itself may be excluded. Run the address through the USDA eligibility map before assuming it qualifies.

Question 2

What credit score do I need for each loan?

Accepted Answer

FHA requires a 580 minimum for 3.5% down. USDA typically requires 640 or higher, depending on the lender.

Question 3

Can I use USDA if I have a higher income?

Accepted Answer

USDA sets household income limits based on county and family size. Exceed the cap and you're out. FHA has no income ceiling.

Question 4

Which loan has lower monthly costs?

Accepted Answer

USDA's guarantee fee is generally lower than FHA mortgage insurance. But your rate and loan amount affect the full picture. Rates vary by borrower profile and market conditions.

Question 5

Can I buy a multi-unit property with these loans?

Accepted Answer

FHA allows up to 4 units if you live in one. USDA is for single-family homes only — no duplexes or multi-units.

Question 6

Which loan closes faster?

Accepted Answer

FHA and USDA timelines are similar, but USDA requires an extra approval step through the USDA office. That can add 1-2 weeks to closing.

FHA vs USDA Loans in Merced, CA