Both the FHA and the USDA mortgage programs are government-backed mortgage loans aimed at low-to-moderate income homebuyers. Reduced down payments, closing expenses, and interest rates are just a few advantages that both loans provide. Each loan program has distinct qualifying standards and loan amounts, though.
USDA Loan: The USDA Rural Housing Service loan program is geared for rural and suburban areas. The majority of properties must be located in a rural area as specified by the USDA, and the buyer must satisfy particular income, credit, and property standards to be eligible.
FHA Loan: The FHA loan program was created to provide first-time home purchasers and other people with modest incomes with low down payment options. An FHA loan normally requires a down payment of just 3.5% of the total cost from the borrower.
Purchase Price Limits for a Home Under the USDA Loan Program: In most rural regions, homes may cost up to $424,100 (or up to $636,150 in high-cost areas). You might not be able to use the FHA loan program if your home costs more than these caps.
The FHA lending program is available for residences up to $636,150 in most areas. FHA Loan: Purchase Price Limits The highest purchase price cap is $726,525 in high cost areas, though.
Loan Maximums for USDA Loans Both guaranteed and direct loan limits are available under the USDA loan program. While Direct Loan Limits are applicable to rural counties without USDA lenders, Guaranteed Loan Limits are applicable to the majority of rural areas.
The maximum amounts that can be borrowed under an FHA loan to buy a home vary by county and state. In most rural locations and up to $636,150 in high-cost counties, you can acquire a loan through the conventional FHA loan program.
The USDA program offers loans to homebuyers with credit scores as low as 580. USDA Loan: FHA Qualifying Credit Score For an FHA loan, you must have a credit score of at least 500, though you may be able to get accepted with a score as low as 500 if you put down at least 10% of the cost of your property.