Question 1

Does the city of Santa Cruz qualify for USDA?

Accepted Answer

Most of the city itself is ineligible. Eligible properties tend to be in rural or unincorporated parts of Santa Cruz County.

Question 2

What's the income limit for USDA in Santa Cruz County?

Accepted Answer

Limits vary by household size and are set by USDA annually. Santa Cruz County is high-cost, so limits are higher than national averages.

Question 3

Is there really zero down payment with USDA?

Accepted Answer

Yes — no down payment required. You still pay closing costs, though those can sometimes be covered by seller credits.

Question 4

How does USDA mortgage insurance work?

Accepted Answer

There's a 1% upfront guarantee fee and a 0.35% annual fee. Both are lower than FHA's equivalent costs.

Question 5

Can I use USDA to buy a fixer-upper in Santa Cruz County?

Accepted Answer

USDA requires the home to meet minimum property standards. Major fixer-uppers often fail inspection — a 203k or renovation loan fits better.

Question 6

How long does USDA loan approval take?

Accepted Answer

USDA loans need a second review by the USDA office after lender approval. Budget extra time — typically 30 to 45 days minimum.

USDA Loans in Santa Cruz, CA — Zero Down in Eligible Areas