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in Lathrop, CA
Lathrop sits in San Joaquin County, where both FHA and USDA loans can work—but only one eliminates the down payment entirely. Most buyers assume FHA is their only option with modest savings, then discover they qualify for USDA's zero-down program.
Both loans offer easier credit standards than conventional mortgages. The real difference comes down to location eligibility and upfront cash requirements.
FHA loans work anywhere in Lathrop with just 3.5% down and credit scores as low as 580. You pay an upfront mortgage insurance premium of 1.75%, plus annual premiums that stay for the loan's life if you put down less than 10%.
These loans accept higher debt ratios than conventional programs. FHA allows up to 50% total debt-to-income, making them accessible for buyers with car payments or student loans.
USDA loans require zero down payment but limit who qualifies and where you can buy. Income caps vary by household size—a family of four in San Joaquin County typically cannot exceed roughly 115% of area median income.
Not every Lathrop property qualifies. USDA designates eligible areas based on population density, and many newer developments fall outside approved zones. Check eligibility before house hunting.
FHA charges higher mortgage insurance—1.75% upfront plus 0.55% to 0.85% annually. USDA charges 1% upfront and 0.35% annually, saving you hundreds monthly on identical loan amounts.
Location flexibility separates these programs. FHA works on any approved property in Lathrop. USDA restricts purchases to designated rural and suburban zones, excluding denser areas.
Choose USDA if you have minimal cash savings and the property falls in an eligible zone. Run the address through the USDA eligibility map before writing an offer—many sellers don't know their home qualifies.
Pick FHA if you earn above USDA income limits or want flexibility to buy anywhere in Lathrop. The higher insurance cost matters less if zero down isn't an option anyway.
FHA yes, if the complex is FHA-approved. USDA rarely approves condos, focusing instead on single-family homes in eligible areas.
FHA typically closes 3-5 days faster. USDA requires additional property eligibility verification that adds processing time.
Yes. FHA allows up to 6% seller concessions. USDA also permits 6%, which can cover your entire closing cost in strong negotiations.
Most lenders require 620 minimum for both. FHA technically allows 580, but few lenders approve scores that low in practice.
Only if your property stays in a USDA-eligible zone and you meet income limits at refinance time. Many Lathrop areas lose eligibility as development increases.