Question 1

Are any properties in Santa Clara USDA-eligible?

Accepted Answer

Most of Santa Clara city is not USDA-eligible. Some rural pockets at the county's edges may qualify — use the USDA property eligibility tool to check a specific address.

Question 2

Which loan has a lower mortgage insurance cost?

Accepted Answer

USDA charges a lower annual fee than FHA mortgage insurance. FHA also adds an upfront premium at closing that USDA does not.

Question 3

Can I use an FHA loan to buy a condo in Santa Clara?

Accepted Answer

Yes, but the condo project must be FHA-approved. Not every complex qualifies — confirm approval status before making an offer.

Question 4

Does USDA require a minimum credit score?

Accepted Answer

Most USDA lenders want a 640 credit score for automated approval. Below that, manual underwriting is required and approval is harder to get.

Question 5

Which loan is better for first-time buyers in Santa Clara?

Accepted Answer

FHA is the more practical option here given Santa Clara's urban density. If you qualify for USDA on an eligible property, the zero-down benefit is hard to beat.

Question 6

Do both loans allow gift funds for closing costs?

Accepted Answer

Yes. Both FHA and USDA allow gift funds from eligible donors. FHA is more flexible on gift documentation than most conventional programs.

FHA vs USDA Loans in Santa Clara, CA