Trying to buy a home in Delhi but not sure if USDA, FHA, or a conventional loan fits you best? You are not alone. Picking the right program can save you thousands and make your offer stronger. In this guide, you will compare down payments, mortgage insurance, credit needs, and eligibility, with quick examples based on Delhi prices. Let’s dive in.
Why this choice matters in Delhi
Home prices in Delhi sit around a median list price of about $373,440, based on a recent local report. That price point puts low or no down payment options within reach for many buyers. You also want to know that Merced County’s 2025 conforming loan limit is $806,500 and the FHA single‑family limit is $524,225, so most typical Delhi homes fall within common program limits.
- See the latest Delhi price snapshot: Delhi market report
- 2025 conforming limit: FHFA update
- 2025 FHA limit for Merced County: FHA county limits summary
Quick compare: USDA vs FHA vs Conventional
USDA: zero down in eligible areas
USDA loans are designed to expand homeownership in eligible “rural” areas. The property must be in a USDA‑eligible location, and your household income must be under a set limit for Merced County and household size. Many Central Valley addresses qualify, but you need to check the exact property on the USDA eligibility tool.
- Property and income rules: see how eligibility works in this USDA overview
- Fees: USDA uses a one‑time upfront guarantee fee of about 1% and an annual fee near 0.35% of the remaining balance, paid monthly. These costs are often lower than FHA’s mortgage insurance. Learn more about USDA fees
FHA: flexible credit with 3.5% down
FHA helps buyers who need a smaller down payment or have lower credit. You can put as little as 3.5% down with a 580 or higher credit score. If your score is between 500 and 579, lenders often require 10% down.
- Credit and down payment rules: FHA minimums
- Mortgage insurance: FHA charges an upfront mortgage insurance premium and an annual MIP paid monthly. Recent HUD updates lowered some annual amounts, but MIP can last many years depending on loan details. See HUD’s MIP guidance
Conventional: cancellable PMI and strong long‑term value
Conventional loans include low‑down options for qualified buyers, sometimes as little as 3% down. Private mortgage insurance (PMI) applies with less than 20% down, but it can be cancelled once you reach enough equity. This is a key difference from FHA insurance for many borrowers.
- Low‑down options overview: Conventional choices
- PMI basics and cancellation: How mortgage insurance works
What usually fits Delhi buyers
- If you need the lowest cash to close and your target home is USDA‑eligible, USDA can be a great fit. You get possible zero down and relatively low ongoing guarantee fees.
- If your credit is challenged and the home does not qualify for USDA, FHA is often the path with 3.5% down at 580 or higher credit. Expect mortgage insurance both upfront and monthly.
- If you have solid credit and plan to build equity, a low‑down conventional loan can cost less over time, because PMI can be removed later.
What it could cost upfront at Delhi prices
Using Delhi’s median list price of about $373,440:
- USDA: 0% down. You may finance the upfront guarantee fee, so your cash can stay focused on closing costs. USDA fee details
- FHA: 3.5% down is about $13,070, plus upfront and monthly MIP. FHA credit and down rules
- Conventional: 3% down is about $11,200, with PMI that can be cancelled once you reach enough equity. Conventional options
These are estimates. Your actual cash to close depends on your lender quote, credits, and whether you finance upfront insurance or fees.
How to choose in five steps
- Confirm property eligibility for USDA. Enter the exact address in the USDA eligibility tool. If it passes, keep USDA on your list. If not, consider FHA or conventional. USDA overview and tool reference
- Check your credit and down payment. If your score is 580 or higher, FHA allows 3.5% down. Conventional programs often start around 3% down for eligible buyers. FHA rules and conventional options
- Compare mortgage insurance over time. USDA’s annual fee is typically lower than FHA’s MIP. Conventional PMI can be removed later, which may lower long‑term cost. Learn how PMI works
- Verify loan limits for your price. With a median near $373,440, most Delhi homes are below the 2025 conforming limit of $806,500 and the FHA limit of $524,225, which keeps these programs in play. Conforming limit and FHA limit
- Get written loan estimates from at least two lenders. Ask each for a full monthly payment breakdown, including any guarantee fees, MIP, or PMI. Then compare total costs over the time you expect to keep the loan.
Property condition and appraisal notes
- USDA requires the home to meet program standards in an eligible area. Always check the address first.
- FHA requires an FHA appraisal and the home must meet HUD minimum property standards. Some repairs may be needed before closing. FHA insurance and policy hub
- Conventional loans also require an appraisal, but minor property issues may be treated differently than FHA depending on lender and investor rules.
Local help when you are ready
You do not have to sort this out alone. If you want a clear, local walkthrough of your options in Delhi, I am here to help you compare scenarios and line up the right conversations with lenders. Reach out to Martin Villanueva to start a plan that fits your budget and your timeline.
FAQs
Is Delhi, CA eligible for USDA loans?
- Many addresses near Delhi may be eligible, but USDA eligibility is property specific. Use the USDA property tool to check the exact address, then confirm with a USDA‑approved lender. You can start with this USDA overview and tool reference.
Which loan is usually cheapest over time in Delhi?
- It depends on your credit, down payment, and how long you keep the loan. USDA often has a lower ongoing fee than FHA’s MIP, while conventional can be cheapest long term if you remove PMI after building equity.
What if my credit is lower and I have little savings?
- If the home is USDA‑eligible and your household meets income limits, USDA may allow zero down. If not, FHA often works with 3.5% down at a 580 or higher score.
Can I remove FHA mortgage insurance later?
- FHA mortgage insurance has strict rules and can last many years. Many owners remove it by refinancing into a conventional loan once they have enough equity.
Are most Delhi homes within loan limits?
- Yes for typical purchases. The 2025 conforming limit is $806,500 and the FHA limit is $524,225 for Merced County, which covers most homes near Delhi’s current median price.
