Question 1

Does Santa Barbara city qualify for USDA loans?

Accepted Answer

Most of Santa Barbara city is not USDA-eligible. Buyers there should use FHA. Check the USDA eligibility map for specific addresses.

Question 2

Which loan has a lower down payment?

Accepted Answer

USDA requires zero down. FHA requires 3.5% with a 580+ credit score. USDA wins on upfront cost — if you qualify.

Question 3

Is there an income limit for FHA loans?

Accepted Answer

No. FHA has no income ceiling. USDA does set income limits based on household size and county.

Question 4

Which loan has cheaper mortgage insurance?

Accepted Answer

USDA's annual mortgage insurance fee is lower than FHA's. Over 30 years, that gap adds up to real money.

Question 5

Can I use either loan to buy a condo in Santa Barbara?

Accepted Answer

FHA works on approved condo projects. USDA generally does not cover condos — it's designed for single-family homes in rural areas.

Question 6

What credit score do I need for each loan?

Accepted Answer

FHA lenders typically require 580 for 3.5% down. Most USDA lenders want 640 or higher. Rates vary by borrower profile and market conditions.

FHA vs USDA Loans in Santa Barbara, CA