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in Vallejo, CA
Both FHA and USDA loans help Vallejo buyers with tight budgets get into homes. The main split: FHA requires 3.5% down but works anywhere in the city, while USDA offers zero down but only in eligible Solano County areas.
Most Vallejo neighborhoods qualify for FHA financing without restrictions. USDA eligibility depends on property location and household income, which eliminates some buyers before they apply.
FHA loans let you buy with just 3.5% down if your credit score hits 580. You'll pay mortgage insurance for the life of the loan unless you refinance out later.
These loans work for any property type in Vallejo—single family, condo, townhouse. Lenders see hundreds of FHA deals monthly, so underwriting moves faster than specialty programs.
The big catch is mortgage insurance. You pay 1.75% upfront at closing plus annual premiums around 0.85%. That adds roughly $200 monthly on a $450,000 loan.
USDA loans require zero money down but restrict where you can buy. Parts of Vallejo don't qualify because they're too urban or population-dense for the rural housing program.
You must earn below the area income limit—currently $103,500 for households of four in Solano County. The property itself can't exceed USDA price caps, which change annually.
USDA charges a 1% upfront guarantee fee and 0.35% annual fee. That's cheaper than FHA insurance, but the geographic and income restrictions knock out most Vallejo applicants.
Down payment is the obvious split. FHA needs 3.5% saved, USDA needs nothing. On a $400,000 Vallejo home, that's $14,000 cash versus zero.
Location matters more with USDA. Check the eligibility map before falling for a property—many Vallejo addresses won't qualify. FHA works anywhere without geographic limits.
Income limits only affect USDA borrowers. FHA doesn't care how much you earn as long as your debt ratios work. USDA cuts off households earning above moderate income thresholds.
Choose USDA if you have minimal savings, earn under the income limit, and can find a home in an eligible area. Run the property address through the USDA map before making offers.
Pick FHA if you're buying in central Vallejo, earn above USDA caps, or want faster closing timelines. You'll need down payment money, but you gain location flexibility.
Most Vallejo buyers end up with FHA because USDA's eligibility boxes are hard to check simultaneously. We see maybe one USDA deal for every ten FHA loans in Solano County.
Outer areas near American Canyon may qualify, but central Vallejo typically doesn't. Check the USDA eligibility map with specific addresses before shopping.
FHA approves condos if the complex is on their approved list. USDA rarely finances condos—they focus on single-family homes in eligible zones.
FHA accepts 580 with 3.5% down or 500 with 10% down. USDA lenders typically want 640 minimum, though requirements vary by lender.
Both programs let sellers pay up to 6% toward your costs. FHA charges 1.75% upfront insurance; USDA charges 1% guarantee fee rolled into the loan.
Yes. USDA counts all household income from adults living in the home, including non-borrowing spouses and working adult children.
FHA requires refinancing into a conventional loan to drop insurance. USDA lets you request removal after reaching 80% equity if rates dropped enough to justify refinancing.