Question 1

Is Carmel By The Sea USDA eligible?

Accepted Answer

Most coastal Carmel addresses fall outside USDA rural zones. Check the USDA eligibility map for the specific property address before applying.

Question 2

What credit score do I need for FHA?

Accepted Answer

You need a 580 credit score for 3.5% down. Scores between 500 and 579 require 10% down.

Question 3

Does USDA have income limits in Monterey County?

Accepted Answer

Yes. USDA caps household income based on county and family size. High earners in Monterey County may not qualify.

Question 4

Which loan has lower mortgage insurance?

Accepted Answer

USDA's annual fee runs lower than FHA's monthly MIP for most borrowers. FHA also adds a 1.75% upfront premium.

Question 5

Can I use gift funds with either loan?

Accepted Answer

FHA allows gift funds for the full down payment. USDA requires no down payment, so gifted funds are less of a factor.

Question 6

Can I use FHA or USDA for a vacation home?

Accepted Answer

No. Both programs require the property to be your primary residence. Investment and vacation properties don't qualify.

FHA vs USDA Loans in Carmel By The Sea