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in San Bruno, CA
San Bruno homebuyers often compare FHA and USDA loans to find the most affordable path to ownership. Both government-backed programs offer low down payments and flexible credit requirements, but they serve different borrower needs.
FHA loans work for most San Bruno properties and borrowers with lower credit scores. USDA loans require zero down payment but come with geographic and income restrictions that may affect San Mateo County eligibility.
Understanding the differences helps you choose the program that matches your financial situation and property goals. Each option has distinct advantages depending on your income, savings, and where you want to live.
FHA loans require just 3.5% down for borrowers with credit scores of 580 or higher. The Federal Housing Administration insures these mortgages, making lenders more willing to approve buyers with modest credit histories or limited savings.
San Bruno homebuyers can use FHA loans on most single-family homes, condos, and townhouses without location restrictions. The program allows higher debt-to-income ratios than conventional loans, helping more people qualify.
FHA requires both upfront and annual mortgage insurance premiums. The upfront premium is 1.75% of the loan amount, and annual premiums range from 0.45% to 1.05% depending on your down payment and loan term.
USDA loans offer 100% financing with no down payment required for eligible rural and suburban properties. The program targets low-to-moderate income families, with household income limits based on area median income.
San Mateo County's high property values and urban density mean most San Bruno homes do not qualify as USDA-eligible locations. The program focuses on less densely populated areas, which typically excludes developed cities near San Francisco.
USDA loans require a 1% upfront guarantee fee and annual fees of 0.35% of the loan balance. Borrowers must meet income limits and demonstrate ability to repay, though credit requirements remain flexible.
The biggest difference is down payment: FHA requires 3.5% while USDA offers zero down financing. However, USDA's geographic restrictions mean it rarely applies to San Bruno properties in developed San Mateo County.
FHA works anywhere in San Bruno without income limits, making it accessible to buyers at any income level. USDA restricts both location and borrower income, targeting families earning below area median income in rural zones.
Both programs charge upfront and annual fees. FHA's mortgage insurance costs more over time, but USDA's 0.35% annual fee is lower. Rates vary by borrower profile and market conditions, though both programs offer competitive pricing.
Choose FHA if you're buying in San Bruno's developed neighborhoods with 3.5% down payment saved. This program works for most property types and income levels without geographic restrictions that could limit your home search.
USDA makes sense only if you find an eligible property in less developed parts of San Mateo County and meet income requirements. Given San Bruno's urban character, most buyers find FHA more practical for local purchases.
Check USDA's property eligibility map before pursuing that option. If your target home doesn't qualify or your income exceeds limits, FHA provides the next-best low down payment alternative with flexible approval standards.
Most San Bruno properties do not qualify as USDA-eligible due to the city's urban density. Check the USDA property eligibility map to verify specific addresses before pursuing this option.
USDA's 0.35% annual fee is lower than FHA's 0.45% to 1.05% annual mortgage insurance premium. However, FHA's broader eligibility often makes it the only viable government-backed option in San Bruno.
FHA accepts credit scores as low as 580 for 3.5% down payments. USDA has no official minimum but typically requires 640 or higher for automated approval, though exceptions exist.
USDA restricts borrowers to households earning below area median income. FHA has no income caps, making it accessible to buyers at any income level in San Bruno.
FHA is easier for San Bruno buyers because it has no location restrictions and works on most property types. USDA's geographic limits eliminate most local properties from eligibility.