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in Hollister, CA
Hollister sits in a unique position for government-backed mortgages. Most of San Benito County qualifies for USDA financing, making zero down payment loans available alongside traditional FHA options.
Both programs beat conventional loans for low-equity buyers. But they target different borrower profiles and have distinct trade-offs on upfront costs, monthly payments, and property restrictions.
FHA loans require 3.5% down with credit scores as low as 580. You pay an upfront mortgage insurance premium of 1.75% plus annual premiums of 0.55% for the life of most loans.
There's no income cap, and you can buy nearly any property type in Hollister. FHA works in city limits, downtown, and rural edges without geographic restrictions.
Maximum loan limits in San Benito County are $498,257 for single-family homes. Rates typically run 0.25% to 0.50% higher than conventional due to insurance costs.
USDA loans require zero down payment if you meet income limits. A household of four in San Benito County cannot exceed $103,500 annual income based on current USDA caps.
You pay a 1% upfront guarantee fee and 0.35% annual fee. That annual cost is significantly lower than FHA and can be canceled once you hit 20% equity through payments or appreciation.
Only USDA-eligible properties qualify, which excludes some Hollister subdivisions within city limits. Most areas outside the densest parts of town are approved, but you need to verify each address.
Down payment is the headline difference: FHA needs 3.5%, USDA needs nothing. On a $450,000 Hollister home, that's $15,750 in cash versus zero.
USDA monthly insurance costs about $131 versus $206 for FHA on that same loan. Over time that gap adds up, and USDA insurance drops off while FHA typically stays for the loan term.
Income limits are the dealbreaker for many buyers. USDA caps household income while FHA has no limit, making FHA the only option for higher earners regardless of down payment preferences.
Property location matters more with USDA. An address on the wrong side of an eligibility line kills the deal, while FHA approves anything that passes appraisal standards.
Choose USDA if you're under the income limit and buying in an eligible area. The zero down payment and lower monthly costs beat FHA on every financial metric.
Choose FHA if you exceed USDA income caps, need to buy in restricted Hollister zones, or want faster closing timelines. USDA adds extra verification steps that can delay approval.
Check property eligibility before falling in love with a home. USDA's address lookup tool shows approval status instantly and prevents wasted time on ineligible listings.
No, some Hollister subdivisions fall outside USDA boundaries. Check the USDA property eligibility map before shopping to avoid finding a home you can't finance.
USDA monthly payments run lower due to 0.35% annual insurance versus FHA's 0.55%. On a $450,000 loan, that's about $75 less per month with USDA.
Household income cannot exceed $103,500 for a family of four. Limits adjust based on household size and county median income levels.
Only if you put down 10% or more at purchase. With the standard 3.5% down, FHA insurance stays for the full loan term.
FHA 203(k) loans allow renovation financing. Standard USDA loans require move-in ready properties that meet safety and livability standards.
FHA typically closes quicker because USDA requires additional rural development verification. Expect 30-45 days for FHA versus 45-60 for USDA.