Federal Housing Administration (FHA) loans are government-backed mortgages designed to help first-ti
Popular mortgage loan option
FHA vs USDA Loans: Low Down Payment Government Loans Compared
Both FHA and USDA offer affordable paths to homeownership. Compare eligibility, down payments, and costs to find your best option.
Feature-by-Feature Comparison
See how FHA Loans and USDA Loans stack up
| Feature | FHA Loans | USDA Loans |
|---|---|---|
| Down Payment | 3.5% | 0% |
| Location | Anywhere | USDA-eligible areas only |
| Income Limits | None | 115% area median income |
| Credit Score | 580+ | 640+ |
| Insurance Cost | MIP: 1.75% upfront + 0.85%/yr | Guarantee: 1% upfront + 0.35%/yr |
| Property Types | 1-4 unit primary residence | Single-family primary only |
Which Loan Is Right for You?
Each loan type has ideal scenarios
The Bottom Line
If you qualify for USDA, it typically saves more money with zero down payment and lower insurance costs. FHA is available everywhere and has more flexible credit requirements, making it the fallback for buyers who do not qualify for USDA.
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Frequently Asked Questions
Common questions about FHA Loans vs USDA Loans
Frequently Asked Questions
USDA typically has lower monthly costs due to its lower annual guarantee fee (0.35% vs FHA's 0.85% MIP). Plus, USDA requires zero down payment, keeping your loan amount lower.
This comparison is for informational purposes only and does not constitute financial advice. Rates, terms, and program availability are subject to change without notice and may vary based on creditworthiness, property type, loan amount, and other factors. Contact NMHL for current rates and personalized loan options. NMHL NMLS# 2557591. Equal Housing Lender.