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in Portola, CA
Portola sits in rural Plumas County, making both FHA and USDA loans viable options for buyers here. Most of this area qualifies for USDA financing, which means you might be choosing between a 3.5% down FHA loan and a zero-down USDA loan.
The right choice depends on your savings, credit profile, and whether you meet USDA income limits. Both programs accept credit scores around 620 through most lenders, but the down payment and mortgage insurance structures differ significantly.
FHA loans require 3.5% down with a 580 credit score, though most lenders want 620 or higher. You'll pay an upfront mortgage insurance premium of 1.75% plus annual premiums between 0.55% and 0.80% for the life of the loan on most purchases.
There are no income limits with FHA, making it the fallback option when buyers exceed USDA thresholds. The loan works anywhere in Portola regardless of property location, and you can use it for manufactured homes on permanent foundations.
FHA allows higher debt-to-income ratios than conventional loans, often approving borrowers up to 50% DTI. Sellers can contribute up to 6% toward your closing costs, which helps offset the down payment requirement.
USDA loans require zero down payment for qualified rural properties in designated areas. Portola falls within USDA-eligible zones, though you'll need to verify specific property addresses through the USDA eligibility map.
Income limits apply based on household size and county median income levels. For Plumas County, these limits tend to be higher than in metro areas but will disqualify higher earners. You'll pay a 1% upfront guarantee fee and 0.35% annual fee, both lower than FHA.
Credit requirements start around 640 for automated approvals, though manual underwriting allows lower scores. The program restricts purchases to primary residences only, and properties must meet USDA rural definitions.
The down payment split is the biggest separator. USDA offers zero down while FHA needs 3.5%, which on a $350,000 home means $12,250 out of pocket. That difference matters for buyers still building savings.
Mortgage insurance costs less with USDA at 0.35% annually versus FHA's 0.55% to 0.80%. On that same $350,000 purchase, you'd save roughly $100 per month with USDA. FHA charges this premium for the loan's life, while USDA drops it after you reach 80% equity.
Income limits restrict USDA eligibility but not FHA. If your household income exceeds Plumas County thresholds, FHA becomes your only government-backed option. Property location matters more for USDA since not every address qualifies as rural.
Choose USDA if you have minimal savings, meet income limits, and the property qualifies as rural. The zero-down structure and lower monthly insurance make it the strongest option for eligible buyers in Portola.
Go with FHA if your income exceeds USDA limits, you need faster closing timelines, or the property doesn't meet rural requirements. FHA also works better for buyers with credit scores below 640 or those purchasing manufactured homes.
Run both scenarios with actual numbers before deciding. A $350,000 purchase with USDA saves you $12,250 upfront and around $100 monthly compared to FHA, assuming you qualify on income and property location.
Most of Portola qualifies as rural under USDA maps. Verify specific addresses at the USDA eligibility website before committing to this loan path.
Limits vary by household size and adjust annually. Most households under $103,500 qualify, but check current USDA figures for Plumas County.
Yes, FHA approves manufactured homes on permanent foundations. USDA also allows these but with stricter property condition requirements.
FHA typically closes faster since USDA requires rural designation verification and income certification. Budget 45-60 days for USDA versus 30-45 for FHA.
USDA drops insurance at 80% equity. FHA requires refinancing into conventional to remove insurance on most loans originated after 2013.