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San Luis Obispo County just secured 750 acres for the Morro Bay-to-Cayucos connector trail, signaling real infrastructure investment across the region. At 6.125%, a $200,000 USDA purchase runs $1,215 monthly in principal and interest.
Arroyo Grande sits in USDA-eligible territory, which means no down payment required if your income doesn't exceed 115% of the area median. The county's median household income is $93,398 — well below that ceiling.
6.125%
Interest Rate
$1,215
Monthly P&I
640
FICO Minimum
$0
Down Payment
0.35% of balance
Annual Fee
USDA Loans in Arroyo Grande
USDA loans require a 640 FICO minimum and zero down payment on eligible rural properties. Income limits cap at 115% of the area median — that's roughly $107,408 for a household in San Luis Obispo County.
The county's median household income of $93,398 sits comfortably below the USDA ceiling. A $200,000 purchase with zero down means your loan amount equals your purchase price.
Local decision guide
Use this guide to connect usda loans eligibility, lender expectations, and local market factors before comparing payment options in Arroyo Grande.
San Luis Obispo County just secured 750 acres for the Morro Bay-to-Cayucos connector trail, signaling real infrastructure investment across the region. At 6.125%, a $200,000 USDA purchase runs $1,215 monthly in principal and interest.
Arroyo Grande sits in USDA-eligible territory, which means no down payment required if your income doesn't exceed 115% of the area median. The county's median household income is $93,398 — well below that ceiling.
USDA loans require a 640 FICO minimum and zero down payment on eligible rural properties. Income limits cap at 115% of the area median — that's roughly $107,408 for a household in San Luis Obispo County.
USDA loans are backed by the U.S. Department of Agriculture and sold to secondary market investors like Fannie Mae and Freddie Mac. Most California lenders offer them, but approval timelines run 45-60 days because USDA properties require additional...
Brokers and retail lenders both originate USDA loans, though brokers often have faster access to multiple USDA-approved investors. Underwriting is stricter than conventional because USDA enforces property and income limits.
USDA financing makes sense in Arroyo Grande for buyers earning under $107,000 who can't save 20% down. The zero-down structure removes the biggest barrier to homeownership in this price range.
The trade-off is the annual 0.35% fee that never goes away — on a $200K loan, that's $700 yearly. Over 30 years, you're paying roughly $21,000 in fees. If you can save 10% down and qualify for conventional, the math shifts.
Conventional loans at 20% down have no PMI and no annual fees, but they require $40,000 saved upfront on a $200,000 purchase. USDA requires zero down and no PMI, but charges an annual fee.
FHA loans also go down to 3.5% down but carry lifetime mortgage insurance if you put less than 10% down. USDA has no insurance at all, just the annual fee.
The SLO County Board of Supervisors just approved a 2026 Legislative Platform prioritizing housing, transportation, and water infrastructure. That kind of county-level commitment to housing supply and roads matters for long-term home values in Arroyo Grande.
The city council also voted to support a half-cent transportation sales tax for November 2026, funding road and transit improvements. Better roads and transit access make rural properties more attractive and support resale value.
No — USDA loans require zero down payment on eligible rural properties. You finance the full purchase price. The only upfront cost is the 1% USDA guarantee fee, which is rolled into your loan amount and paid over 30 years.
At 6.125% APR on a $200,000 USDA loan, principal and interest run $1,215 monthly. That's based on a 30-year fixed rate as of April 8, 2026, with 0.429 discount points ($858 upfront).
USDA caps household income at 115% of the area median, which is roughly $107,400 in San Luis Obispo County. The county's actual median household income is $93,398, so most local buyers fall well below the limit.
No — USDA loans have no mortgage insurance (PMI). Instead, you pay a 1% upfront guarantee fee and an annual 0.35% fee on the loan balance. On a $200,000 loan, the annual fee is $700. That's cheaper than FHA's lifetime mortgage insurance.
USDA loans typically close in 45-60 days. The extra time comes from USDA property verification — the lender must confirm the property meets rural eligibility and your income stays within the cap.