Loading
in Gilroy, CA
Gilroy sits at the southern edge of Santa Clara County. That location matters — parts of the city qualify for USDA financing, which most Bay Area cities don't.
Both loans are government-backed with low barriers to entry. But they work very differently. Knowing which fits your situation saves time and money.
FHA loans require 3.5% down with a 580 credit score. Drop below 580 and you need 10% down — but approval is still possible.
FHA works anywhere in Gilroy. No geographic restrictions. No income cap. That flexibility is why it's the most common low-down-payment loan in California.
USDA loans require zero down. That's the headline. For buyers short on savings, it's a real advantage over FHA.
The catch: the property must be in a USDA-eligible area, and your household income must fall under the program limit for Santa Clara County. Check eligibility before you fall in love with a listing.
The biggest difference is down payment. USDA costs nothing upfront. FHA costs at least 3.5%. On a $700,000 home, that's $24,500 out of pocket with FHA.
Mortgage insurance works differently too. FHA charges 1.75% upfront plus annual MIP that often stays for the life of the loan. USDA skips the upfront hit and typically runs lower annual fees.
If you qualify for USDA, run the numbers. Zero down and lower MIP often beat FHA — especially if cash reserves are tight. But income limits disqualify a lot of Santa Clara County households.
FHA is the fallback for higher earners, buyers in non-eligible zones, or anyone who needs a cleaner approval path. Rates vary by borrower profile and market conditions.
Parts of Gilroy fall within USDA-eligible boundaries. Check the USDA property eligibility map before assuming a specific address qualifies.
FHA requires 580 for 3.5% down. USDA typically requires 640, though some lenders set higher minimums.
USDA generally runs lower annual MIP than FHA. FHA also adds a 1.75% upfront charge that USDA doesn't have.
No. USDA eligibility is property-specific. Some Gilroy areas qualify; others don't. Verify the address on the USDA site first.
Yes. USDA income limits for Santa Clara County are set by household size. High earners in the Bay Area frequently exceed the threshold.
FHA typically closes faster. USDA loans require an extra approval step through the USDA office, which can add days to weeks.