Profile picture for sheilamartin

which is better, a USDA loan or a FHA loan? Why?

What are the pros and cons of these two loans?
  • July 05 2010 - Anderson
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Answers (4)

Profile picture for Justin Kennedy

I prefer the USDA.
Depending on your lender USDA is available today! A few are funding USDA loans with the "subject to" verbiage on the USDA Guarantee. The New SFGHS fee is 3.5% rather than the former 2%


the subject property must be located within USDA allowed area  link
the household income must not exceed USDA limits link
this website will help you understand a bit more of the program link
  • July 06 2010
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Profile picture for Crestico Funding
USDA RD Programs are great as long as the property you are looking to purchase qualifies for such program. also few months back there was a backlog with funding these loans because the state is short on the budget. please make sure you consult with your mortgage originator to be able to close your loan on time.
  • July 06 2010
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The USDA RD program has been a wonderful program.  In it's current version, the funding fee of 2% is signifincly lower than FHA's 2.25% upfront plus 0.55% annually; the lack of a required dow-payment has been a welcome bonus.

Most likely there will be changes in the RD program before there is new allocation. 

Both loans use the same appraisal. 
  • July 05 2010
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there is no funding currently for USDA
USDA has to be approved on the section of county the home is located
USDA currently has no down payment requirement (may change any minute)
Fha has down payment requirement of 3.5%
FHA has upfront mortgage insurance at 2.25% of loan amount
FHA has monthly mortgage insurance of .55 will change soon to 1.50%
You can buy a home today with FHA NOT USDA

  • July 05 2010
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