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in Dixon, CA
Dixon sits in an interesting spot for loan eligibility. Most of the city qualifies for USDA financing, which means zero down. But FHA loans work anywhere and let you buy with just 3.5% down if you don't meet USDA income caps.
Both programs help buyers who can't afford conventional 20% down payments. The catch: USDA has income limits and location requirements. FHA doesn't care where you buy or what you earn, but you'll need cash for the down payment.
FHA loans require 3.5% down with a 580 credit score, or 10% down if your score is 500-579. You'll pay an upfront mortgage insurance premium of 1.75% plus monthly MI that usually runs 0.55% to 0.85% annually. This insurance never drops off unless you refinance.
FHA works on any property type in any location, with no income caps. Dixon sellers know FHA buyers are common here, so offers get treated seriously. The loan limit for Solano County is $644,000 for single-family homes in 2024.
USDA loans require zero down payment but cap your household income at $103,500 for most Dixon families. The program targets rural and suburban areas, and most Dixon addresses qualify. You'll pay a 1% upfront guarantee fee plus 0.35% annual fee, which is cheaper than FHA insurance.
Processing takes longer than FHA because USDA must verify property eligibility and income for the entire household. Rates vary by borrower profile and market conditions, but USDA rates often beat FHA by 0.125% to 0.25%. Credit score minimums sit around 640 for most lenders.
The down payment split is obvious: USDA needs zero, FHA needs 3.5%. On a $450,000 Dixon home, that's $0 versus $15,750 upfront. But USDA takes 45-60 days to close versus 30 days for FHA because of the extra eligibility checks.
Income matters only for USDA. If your household brings in more than $103,500, you're out. FHA doesn't care if you make $60,000 or $600,000. USDA's annual mortgage insurance costs about 40% less than FHA, saving you $150-200 monthly on most Dixon purchases.
Check your Dixon address for USDA eligibility first. If it qualifies and your income is under the cap, USDA saves you thousands upfront and hundreds monthly. You need decent credit though, usually 640 minimum. Run your household income carefully because it includes everyone over 18 living there.
Choose FHA if you make too much for USDA, need to close fast, or your property sits in a non-eligible zone. FHA also works better if your credit is below 640 but above 580. The higher insurance cost stings, but you can refinance out of it once you hit 20% equity.
Most Dixon properties qualify, but some newer subdivisions don't. We check eligibility by address in under two minutes using USDA's map system.
USDA typically costs $150-200 less monthly due to lower mortgage insurance. The zero down payment also means no PMI removal timeline issues.
Sellers prefer FHA because it closes 2-3 weeks faster. USDA offers work fine but expect 45-60 days for property and income verification.
All household members 18 and older, even if they're not on the loan. This includes adult children, parents, and roommates living at the property.
Yes, once you hit 20% equity you can refinance to conventional and drop the insurance. USDA has a similar streamline refinance option.