Loading
in Mount Shasta, CA
Mount Shasta sits in a USDA-eligible area, which means you have two strong government loan options. FHA loans require just 3.5% down and work almost anywhere, while USDA loans offer zero down payment for qualifying borrowers in this rural market.
Most buyers here choose based on down payment savings versus income limits. Both programs accept lower credit scores than conventional loans, but they have different tradeoffs on upfront costs and monthly fees.
FHA loans need 3.5% down with a 580 credit score, or 10% down if your score sits between 500-579. You pay an upfront mortgage insurance premium of 1.75% plus annual premiums of 0.55% to 0.85% for most loans.
FHA works for single-family homes, condos, and manufactured homes built after 1976. There are no income limits, and sellers can contribute up to 6% toward your closing costs. Debt-to-income ratios can stretch to 50% or higher with compensating factors.
USDA loans require zero down payment for properties in eligible rural areas like Mount Shasta. You pay a 1% upfront guarantee fee and 0.35% annual fee, which is cheaper than FHA's ongoing insurance costs.
Income cannot exceed 115% of the area median for Siskiyou County. Properties must be primary residences in USDA-eligible zones, which covers most of Mount Shasta but excludes some areas. Credit scores of 640 or higher qualify for automated underwriting.
Down payment is the biggest split. USDA needs nothing upfront while FHA requires 3.5% minimum. On a $350,000 home, that's $0 versus $12,250 out of pocket.
FHA charges higher ongoing mortgage insurance at 0.55% to 0.85% annually. USDA's 0.35% annual fee saves you $70 to $175 per month on that same loan amount. But USDA restricts your income and property location while FHA has no such limits.
Choose USDA if you meet the income limits and want zero down. Your property needs to qualify by location, but most single-family homes in Mount Shasta clear that hurdle. The lower monthly insurance saves real money over time.
Pick FHA if your income exceeds USDA caps, your credit sits below 640, or you need faster closing. FHA also works better for condos and manufactured homes that might not meet USDA property standards. Either loan beats conventional financing for buyers with limited down payment funds.
Most single-family homes qualify, but some areas near the city center may be ineligible. Check the USDA eligibility map before house hunting.
USDA typically costs $70-$175 less per month due to lower mortgage insurance. This assumes you qualify for zero down and meet income limits.
Yes. FHA permits up to 6% seller contribution while USDA allows 6% as well for closing costs and prepaid items.
Limits vary by household size and change annually. A family of four typically qualifies with income under $103,500, but verify current caps with your lender.
Yes, if you still meet USDA income and location requirements. Many borrowers refinance to eliminate FHA mortgage insurance once they hit 20% equity.