Question 1

Which Morro Bay neighborhoods qualify for USDA loans?

Accepted Answer

Eligibility varies by specific address rather than neighborhood. The USDA property eligibility map provides definitive answers. Generally, areas outside the densest development zones have better qualification odds.

Question 2

Can I use a USDA loan for a fixer-upper in Morro Bay?

Accepted Answer

The property must meet USDA minimum standards at purchase. Major repairs needed before move-in typically disqualify a home. Minor cosmetic updates after closing are acceptable.

Question 3

How do USDA income limits work in San Luis Obispo County?

Accepted Answer

Limits adjust based on household size and are set at 115% of area median income. A family of four typically qualifies with income under $110,000, though exact figures change annually.

Question 4

What happens if my income increases after getting a USDA loan?

Accepted Answer

Income limits apply only at purchase. Once you close on the home, future income increases don't affect your loan. You can earn more without penalty after closing.

Question 5

Do USDA loans cost more than conventional mortgages?

Accepted Answer

USDA charges an upfront guarantee fee and annual fee similar to mortgage insurance. Total costs often compare favorably to FHA and low-down conventional loans when you factor in the zero down payment benefit.

USDA Loans in Morro Bay: Zero Down Payment Home Financing for Coastal Living