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in San Juan Bautista, CA
San Juan Bautista sits in a USDA-eligible zone, which means buyers here can choose between two strong government loan options. FHA loans require just 3.5% down, while USDA loans offer zero down payment for qualified buyers.
Both programs accept lower credit scores than conventional loans. The right choice depends on your savings, income level, and whether you meet USDA's rural housing requirements.
FHA loans let you buy with 3.5% down if your credit score hits 580. Drop below that and you'll need 10% down, but we still see approvals in the 500s.
You'll pay mortgage insurance for the loan's life in most cases. The upfront premium is 1.75% of the loan amount, plus annual premiums between 0.45% and 1.05% depending on your down payment and loan size.
FHA caps your debt-to-income ratio at 50% with strong credit, sometimes 57% with compensating factors. No income limits exist, which makes FHA work for higher earners who lack savings.
USDA loans require zero down payment for properties in eligible rural areas like San Juan Bautista. Your credit score needs to reach 640 for automated approval, though manual underwriting works down to 580.
You'll pay a 1% upfront guarantee fee and 0.35% annual fee—lower than FHA's insurance costs. The property must be your primary residence and meet USDA's modest home standards.
Income limits vary by household size and county. San Benito County caps income at around $103,500 for a family of four, adjusted annually. Your debt-to-income ratio can't exceed 41% without compensating factors.
The down payment gap is the obvious split—USDA requires nothing while FHA needs 3.5%. But USDA's income limits disqualify higher earners, where FHA has no cap.
USDA's annual mortgage insurance runs 0.35% versus FHA's 0.45% to 1.05%. Over 30 years on a $400K loan, that difference saves you $12K to $84K depending on your FHA rate tier.
FHA approves faster because fewer underwriters know USDA guidelines. Expect 30-35 days for FHA versus 40-50 days for USDA. Sellers in competitive markets prefer the faster close.
Choose USDA if your household income falls below the county limit and you can wait an extra two weeks for closing. The zero down payment and cheaper insurance make it the better deal financially.
Pick FHA if you earn too much for USDA, need to close fast, or want more lender options. You'll pay more in insurance but face fewer approval hurdles.
Plenty of San Juan Bautista buyers start with USDA then switch to FHA when they hit income limits or face appraisal issues. We run both scenarios upfront so you know your backup plan.
FHA allows repairs through the 203(k) program. USDA requires homes to be move-in ready, so major renovations disqualify the property until work is done.
USDA enforces modest home standards and bans luxury features like pools in some cases. FHA is more flexible but still requires homes to meet safety standards.
FHA accepts gifts for the entire 3.5% down payment. USDA has no down payment, but allows gifts for closing costs from family or approved sources.
No exceptions exist—income over the limit disqualifies you. FHA becomes your only government option unless you wait for next year's limit increase.
Yes, you can refinance between programs anytime. Most borrowers refinance out of both into conventional loans once they hit 20% equity.