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Morgan Hill sits at the southern edge of Santa Clara County. Parts of the city fall within USDA-eligible zones — that matters more than most buyers realize.
Zero down payment in the Bay Area sounds impossible. USDA makes it real for buyers who land in the right location with the right income.
0%
Down Payment
640 preferred
Min Credit Score
Government-backed
Loan Type
Primary residence only
Occupancy
USDA Loans in Morgan Hill
USDA has two hard requirements: property location and borrower income. You need to be in an eligible rural or suburban area, and your household income must stay under the program limit.
Credit requirements are more flexible than conventional loans. Most lenders want a 640 score for automated approval, but manual underwriting is possible below that.
Local decision guide
Use this guide to connect usda loans eligibility, lender expectations, and local market factors before comparing payment options in Morgan Hill.
Morgan Hill sits at the southern edge of Santa Clara County. Parts of the city fall within USDA-eligible zones — that matters more than most buyers realize.
Zero down payment in the Bay Area sounds impossible. USDA makes it real for buyers who land in the right location with the right income.
USDA has two hard requirements: property location and borrower income. You need to be in an eligible rural or suburban area, and your household income must stay under the program limit.
Not every lender offers USDA. Plenty of big banks don't touch it. You need someone who actually works these files regularly — approvals move faster that way.
As a broker with 200+ wholesale lenders, we find the USDA-approved lenders who know this program cold. That means fewer delays and cleaner closings.
The biggest mistake I see: buyers assume Morgan Hill is too urban for USDA. Check the eligibility map first. You might be surprised what qualifies.
USDA also has an upfront guarantee fee and an annual fee — similar to FHA's mortgage insurance. Factor both into your payment comparison before deciding.
FHA requires 3.5% down. Conventional minimum is 3%. USDA is zero. For buyers short on savings but steady on income, that gap is significant.
The trade-off is location. FHA and conventional work anywhere. USDA only works in eligible zones — which is why verifying Morgan Hill property eligibility is the first step.
Morgan Hill's location on the southern edge of the valley gives it a different eligibility profile than San Jose or Sunnyvale. Some areas qualify; some don't.
Santa Clara County income limits for USDA apply here. The Bay Area limits are higher than most of the country, which helps more buyers qualify than you'd expect.
Parts of Morgan Hill fall within USDA-eligible zones. You need to check each property address on the official USDA eligibility map before assuming.
USDA income limits in the Bay Area are higher than the national baseline. Your total household income — all members — must fall under the program cap for this county.
Yes, zero down on the purchase price. There is an upfront guarantee fee, but it can be rolled into the loan amount so you're not paying it out of pocket.
USDA has an upfront guarantee fee plus an annual fee. FHA also has both. Rates vary by borrower profile and market conditions — run both scenarios before choosing.
No. USDA is strictly for single-family primary residences. Investment properties and multi-unit buildings are not eligible.
USDA loans can take longer than conventional because files sometimes need USDA Rural Development approval. Working with an experienced lender cuts that timeline.