USDA Loan vs FHA Loan: Which Is Better?

Q: USDA Loan vs FHA Loan: which is better?

If the home is in a USDA-eligible area and your income qualifies, USDA usually costs less: no down payment and lower mortgage insurance. FHA works anywhere, for any income.

Side by side

	USDA Loan	FHA Loan
Down payment	$0	3.5%
Mortgage insurance	1% upfront + 0.35% yearly	1.75% upfront + annual MIP
Location limits	USDA-eligible areas	None
Income limits	Yes	No

Figures are typical market ranges as of October 2026. Actual terms depend on the lender, your credit, the property and the program, and are confirmed on your Loan Estimate or term sheet.

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Home loan

USDA Loans

A USDA loan is a mortgage guaranteed by the U.S.

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Home loan

FHA Loans

An FHA loan is a government-insured mortgage that allows 3.5% down with a credit score of 580 or higher, or 10% down with a score from 500 to 579.

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USDA Loan vs FHA Loan: which is better?

Side by side

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USDA Loans

FHA Loans

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