Zero-down USDA Guaranteed Loans are the most popular rural development mortgage program in California. These loans are available for anyone with low to moderate income to purchase a home in approved rural areas with no down payment.  The USDA Guaranteed Loan Program is also the favorite no-down payment mortgage in California for non-veterans today, and can be used for a broader range of applicant incomes than USDA Direct Loans.

What are California USDA Loans?

The USDA loan program was created by the United States Department of Agriculture Rural Development, also known as “USDA RD”. USDA Guaranteed Loans (also known as USDA Section 502 Guaranteed Loans) are a mortgage program for low and moderate income mortgage applicants. California USDA loans provide low-cost, government insured mortgage options that suit a variety of home buying needs. The most common mortgages offered through USDA are known as “Guaranteed” loans. USDA Guaranteed Loans are 100% financing mortgages, which means you can use them to buy a home with no down payment.

California USDA Loan Requirements

USDA loan requirements mainly focus on the home loan applicant and the property. First off, the home must be located in an approved rural areas to be considered eligible for USDA financing. Second off, the home buyer must meet all income requirements set forth by USDA. These income limits are established through a combination of debt-to-income ratios and income ceilings that equal 115% of the area median income (AMI) for the particular area. Statewide, California carries a median household income of $75,235, but that can vary from county to county. Ultimately, the applicant must also meet all lender requirements for mortgage approval which include:

  • Credit Requirements
  • Income Requirements
  • Documentation Requirements

California USDA Loan Limits

USDA doesn’t set specific maximum loan amounts for guaranteed mortgages. Instead, local limits are determined by a combination of the area USDA maximum income limit and the borrower’s debt-to-income ratios. This approach means that guaranteed California USDA loan limits are fluid and based upon numerous factors. The limits listed below are based on approximate calculations. Actual guaranteed loan limits may vary.

1-4 Person Households
5-8 Person Households
Alpine County, CA$340,000$449,000
Amador County, CA$306,000$391,000
Bakersfield, CA MSA$306,000$391,000
Calaveras County, CA$306,000$391,000
Chico, CA MSA$306,000$391,000
Colusa County, CA$306,000$391,000
Del Norte County, CA$306,000$391,000
El Centro, CA MSA$306,000$391,000
Fresno, CA MSA$306,000$391,000
Glenn County, CA$306,000$391,000
Hanford-Corcoran, CA MSA$306,000$391,000
Humboldt County, CA$306,000$391,000
Inyo County, CA$306,000$391,000
Lake County, CA$306,000$391,000
Lassen County, CA$306,000$391,000
Los Angeles-Long Beach-Glendale, CA HUD Metro FMR Area$417,000$535,000
Madera, CA MSA$306,000$391,000
Mariposa County, CA$306,000$391,000
Mendocino County, CA$306,000$391,000
Merced, CA MSA$306,000$391,000
Modesto, CA MSA$306,000$391,000
Modoc County, CA$306,000$391,000
Mono County, CA$323,000$417,000
Napa, CA MSA$391,000$517,000
Nevada County, CA$323,000$417,000
Oakland-Fremont, CA HUD Metro FMR Area$535,000$707,000
Oxnard-Thousand Oaks-Ventura, CA MSA$417,000$535,000
Plumas County, CA$306,000$391,000
Redding, CA MSA$306,000$391,000
Riverside-San Bernardino-Ontario, CA MSA$306,000$391,000
Sacramento--Roseville--Arden-Arcade, CA HUD Metro FMR Area$340,000$431,000
Salinas, CA MSA$357,000$466,000
San Benito County, CA HUD Metro FMR Area$408,000$517,000
San Diego-Carlsbad, CA MSA$449,000$587,000
San Francisco, CA HUD Metro FMR Area$725,000$845,000
San Jose-Sunnyvale-Santa Clara, CA HUD Metro FMR Area$657,000$845,000
San Luis Obispo-Paso Robles-Arroyo Grande, CA MSA$357,000$466,000
Santa Ana-Anaheim-Irvine, CA HUD Metro FMR Area$466,000$622,000
Santa Cruz-Watsonville, CA MSA$552,000$742,000
Santa Maria-Santa Barbara, CA MSA$449,000$587,000
Santa Rosa, CA MSA$431,000$569,000
Sierra County, CA$306,000$391,000
Siskiyou County, CA$306,000$391,000
Stockton-Lodi, CA MSA$306,000$391,000
Tehama County, CA$306,000$391,000
Trinity County, CA$306,000$391,000
Tuolumne County, CA$306,000$391,000
Vallejo-Fairfield, CA MSA$340,000$449,000
Visalia-Porterville, CA MSA$306,000$391,000
Yolo, CA HUD Metro FMR Area$357,000$449,000
Yuba City, CA MSA$306,000$391,000

Additional USDA Limits

What is the maximum amount that I can borrow with a USDA Loan?

The maximum amount for a USDA home loan in California is determined by:

  • Maximum Loan Amount: There’s no set maximum loan amount for USDA rural home loans in CA. Instead, your debt-to-income ratios dictate how much home your can afford (29/41 ratios). Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area. Maximum USDA Guaranteed Loan income limits for all areas can be found at here.
  • Maximum Financing: The maximum USDA Rural Development Loan amount in CA is 100% of the home’s appraised value plus the 1% USDA RD Loan guarantee fee.

What types of loans does USDA offer in California?

Two USDA home loan options are presently available in California for single family households. These programs are backed by the U.S. Department of Agriculture by way of its Rural Development Housing Loans:

  • California USDA Guaranteed Home Loans – Guaranteed Loans the most common Rural Housing Loans in California, because they accommodate higher income limits and 100% financing for home purchases. USDA Guaranteed applicants may have an income of up to 115% of the median household income for the area, which average $75,235 across the state. Specific area income limits for the program can be viewed here. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate.
  • California USDA Direct Home Loans – USDA Direct Housing Loans in California are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain homeownership, as defined by the USDA. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Click here to see area income limits for this program.

What factors determine if I’m eligible for a USDA Loan in California?

To be eligible for a USDA loan in California, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (29% ratio). Your credit background will be fairly considered. A 620 FICO credit score is generally required to obtain a USDA Rural Housing Loan approval through most lenders. You must also have enough income to pay your housing costs plus all additional monthly debt (41% ratio). These ratios can be exceeded somewhat with compensating factors. Applicants for loans may have an income of up to 115% of the median income for the area. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance.

How much money will I need for the down payment and closing costs?

Rural Development Mortgages in California require no down payment and they allow for the closing costs to be included in the loan amount (appraisal permitting).

What property types are allowed for USDA Mortgages?

While USDA Guidelines do require that the property be Owner Occupied (OO), they also allow you to purchase condos, planned unit developments, manufactured homes, and single family residences.

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