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in Santa Cruz, CA
Both FHA and USDA loans require low or no down payment. But in Santa Cruz County, the differences matter a lot.
USDA eligibility depends on property location. Most of Santa Cruz city falls outside USDA-approved zones.
FHA loans need a 580 credit score for the 3.5% down option. Drop below 580 and you need 10% down.
FHA has no property location restrictions. Any eligible home in Santa Cruz County can qualify.
USDA loans require zero down payment. That alone makes them powerful for buyers with limited savings.
The catch is strict eligibility. The home must be in a USDA-approved area, and your income can't exceed local limits.
The biggest difference is location. FHA works anywhere in Santa Cruz. USDA only works in approved rural areas outside the city core.
USDA income limits also cut out higher earners. FHA has no income cap at all.
Buying inside Santa Cruz city limits? FHA is likely your only option between these two. USDA coverage here is limited.
If you're buying in rural Santa Cruz County — think outskirts toward Watsonville or the mountains — check USDA first. Zero down is hard to beat.
Most of Santa Cruz city is not USDA-eligible. Check the USDA property map before assuming you qualify.
USDA wins here — it requires zero down. FHA requires at least 3.5% with a 580 credit score.
No. FHA has no income cap. USDA does limit household income based on county and family size.
Yes. FHA charges upfront and annual MIP. USDA charges an upfront guarantee fee plus an annual fee.
Both are flexible. FHA accepts 580+ for minimum down. USDA typically wants 640+ at most lenders.
FHA has a rehab option called the 203k. USDA does not allow significant fixer-upper financing.