California USDA Loans Are A Great Alternative to FHA Loans.
Why?
Because USDA loans in California have no down payment requirement.
And no mortgage insurance.
Which means your monthly payment will be lower with a USDA loan than it will be with a FHA loan.
Here is a simple example of a comparison between an FHA loan and a USDA loan here in California:
A USDA loan in California would save you almost $5000 on what would be required for your down payment and approximately $30 a month in payments.
Purchase Price: $135,000.00
FHA
- Minimum Down Payment Required (3.5%) = $4725
- Estimated Monthly Payment = $941.30 **
- Interest Rate = 5.25%
- Annual Percentage Rate = 6.044%
- Term = 30 years
USDA
- Minimum Down Payment Required (0%) = $0.00
- Estimated Monthly Payment = $910.69 **
- Interest Rate = 5.25%
- Annual Percentage Rate = 5.730%
- Term = 30 years
** estimated monthly payment includes an estimated $150 for taxes and insurance
The USDA loan program here in California is designed to help homeowners who live in rural areas – or at least areas that are designated rural areas. You might be surprised to learn just how many areas are eligible for USDA financing that are not actually in the middle of nowhere. In fact, it is on the outskirts of many California towns that the most affordable homes are – and many of these homes are eligible for USDA financing.
USDA Property Eligibility and Income Information
California USDA Loan Program Highlights:
- No monthly mortgage insurance, 1-time guarantee fee of 2% that you finance into the loan.
- 102% Financing based on appraised value, if appraised value exceeds sales price, borrower can finance closing costs and repairs
- 30 Year fixed term
- No minimum cash contribution requirement
- No asset requirements.
- Borrowing of unsecured funds for closing allowed (with minimum credit score requirement).
- No First Time Homebuyer restrictions.
- No maximum on seller concessions and 100% gifting is allowed – You can purchase a home with no money of your own into the transaction.
- Previous housing payment is not required.
- Declining markets do not affect LTV.
If you are ready to save a lot of money, contact us (we are California USDA home loan experts) with questions and for more information today.
{ 1 comment… read it below or add one }
I want to know the criteria of the USDA Single Hme Mortgage-Is there an income range to qualify- as far as I could tell – it looked like the income was a little on the lower side-