Question 1

Can I use a USDA loan to buy in Sunnyvale?

Accepted Answer

No. Sunnyvale is classified as urban and exceeds USDA property eligibility requirements. FHA loans work throughout the city without location restrictions.

Question 2

Which program has lower monthly payments?

Accepted Answer

USDA runs cheaper due to zero down payment and lower annual fees. FHA costs more monthly because of higher mortgage insurance premiums that last the loan's life.

Question 3

Do both programs have income limits?

Accepted Answer

Only USDA caps household income at roughly 115% of area median. FHA has no income ceiling — any earner qualifies if they meet credit and debt ratio standards.

Question 4

What credit score do I need for each loan?

Accepted Answer

FHA accepts 580 credit scores with 3.5% down. USDA typically requires 640 for automated underwriting, though manual underwriting may accept lower scores.

Question 5

Can I refinance from FHA to USDA later?

Accepted Answer

Not if your property sits in Sunnyvale. USDA eligibility depends on location — urban properties never qualify regardless of when you try to refinance.

FHA vs USDA Loans in Sunnyvale: Which Government Program Fits Your Budget?