Question 1

Is Grand Terrace eligible for USDA loans?

Accepted Answer

Parts of Grand Terrace may qualify, but eligibility is address-specific. Run the property through the USDA map before assuming you're covered.

Question 2

Which loan has lower mortgage insurance?

Accepted Answer

USDA does. Its annual fee runs 0.35% versus FHA's higher monthly premium. That difference adds up over a 30-year loan.

Question 3

Can I use USDA if I have a higher income?

Accepted Answer

No. USDA sets income limits by household size and county. If you exceed the cap, FHA has no income ceiling.

Question 4

What credit score do I need for each loan?

Accepted Answer

FHA allows 580 with 3.5% down. USDA typically wants 640 or higher, though some lenders will go lower with manual underwriting.

Question 5

Can I use either loan for an investment property?

Accepted Answer

No. Both FHA and USDA require the home to be your primary residence. Neither works for rentals or vacation properties.

Question 6

Do both loans require an appraisal?

Accepted Answer

Yes. Both require a government appraisal confirming the home meets minimum property standards. USDA adds a rural development review.

FHA vs USDA Loans in Grand Terrace, CA