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in Tehama, CA
Two loans dominate purchase deals in Tehama County: Conventional and FHA. Each fits a different borrower profile.
Your credit score, down payment, and income type usually determine which one makes sense. Get that wrong and you'll pay for it.
Conventional loans are not government-backed. Lenders set terms based on your credit, income, and assets.
Strong borrowers get competitive rates and no permanent mortgage insurance. Put 20% down and you skip insurance entirely.
FHA loans are insured by the federal government. That backstop lets lenders approve borrowers with lower scores and smaller down payments.
You can qualify with a 580 credit score and 3.5% down. Scores between 500-579 require 10% down.
Local decision guide
Use this comparison to weigh Conventional Loans and FHA Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Tehama.
Two loans dominate purchase deals in Tehama County: Conventional and FHA. Each fits a different borrower profile.
Your credit score, down payment, and income type usually determine which one makes sense. Get that wrong and you'll pay for it.
Conventional loans are not government-backed. Lenders set terms based on your credit, income, and assets.
Mortgage insurance is the biggest practical difference. FHA charges both upfront and annual premiums — often for the life of the loan.
HousingWire flagged the 30-year fixed hitting 6.57% recently. At those rates, FHA's mortgage insurance cost becomes a real drag on your monthly payment.
If your score is above 700 and you have 5-10% saved, go conventional. You'll get a better rate and cleaner loan terms.
If your score is in the 580-640 range or your down payment is tight, FHA is likely your path. Don't fight the math.
Both go as low as 3-3.5%. FHA needs 3.5% at 580 credit. Conventional allows 3% but requires stronger credit.
Not easily. Most FHA loans carry MIP for the full loan term. Refinancing into conventional is the usual exit.
FHA can work, but the home must meet HUD condition standards. Fixer-uppers may not pass the appraisal.
FHA is more forgiving on credit and debt ratios. Conventional demands cleaner financials but rewards them with lower costs.
FHA sets county-level limits annually. Confirm the current Tehama County limit before assuming it covers your purchase price.