Question 1

Does Monterey qualify for USDA loans?

Accepted Answer

Most of Monterey city does not. Some outlying areas of Monterey County may qualify. Check the USDA eligibility map before assuming.

Question 2

Which loan has lower mortgage insurance?

Accepted Answer

USDA's annual mortgage insurance rate is lower than FHA's. Over a 30-year loan, that difference adds up significantly.

Question 3

Can I use USDA or FHA for a condo?

Accepted Answer

FHA approves specific condo projects — the complex must be on HUD's approved list. USDA condos are rare and harder to approve.

Question 4

What credit score do I need for each loan?

Accepted Answer

FHA accepts 580 with 3.5% down, or 500 with 10% down. USDA lenders typically want 640 or higher for automated approval.

Question 5

Do USDA income limits apply in Monterey County?

Accepted Answer

Yes. USDA caps household income based on family size and county. Monterey County limits are set for a higher cost area.

Question 6

Which loan closes faster?

Accepted Answer

FHA generally closes faster. USDA loans require a second review by the USDA office, which adds days or weeks to closing.

FHA vs USDA Loans in Monterey, CA