FHA loans v. USDA loans

The following is a GUEST post by submitted by Brandon Laughlin of  www.mortgageloanplace.com. (We here at Icicle Creek Real Estate will add our thoughts separately in the comments section.)

The federal government offers Americans an array of programs to help achieve the dream of homeownership.

Federal Housing Administration loans remain among the most popular and widely accessible options. The FHA has helped insure more than 34 million properties since its inception in 1934. But the low-cost loan program that benefits thousands of low- and middle-income Americans isn’t the government’s only significant home loan program. It’s also not the only low- to no-cost option.

The U.S. Department of Agriculture also provides home loans for the millions of Americans who qualify.

Each loan program has unique benefits and opportunities for eligible home buyers. Here’s a snapshot of both FHA and USDA loans. Prospective home buyers may want to check with a loan expert to help determine if one of these programs best suits their unique needs.

USDA loans

USDA loans are primarily for people living in rural parts of the country. But those in smaller communities and villages may also qualify, depending on how an area is designated “rural.”

Borrowers are not required to provide a down payment or pay for closing costs on a home with USDA loans. They also don’t have to pay for mortgage insurance. Borrowers can buy existing homes or new structures of any size or shape, as long as it’s considered “modest” for the community and has a market value within the local loan limit.

The program has strict eligibility requirements, including credit history and residence. Borrowers have to buy a home in a qualified rural area, although there are some circumstances where people can obtain USDA loans for homes in cities of up to 25,000 people.

USDA loans can provide borrowers with competitive fixed-rate loans. There is no ceiling on purchase price, and borrowers can also use the money to cover repairs.

Local USDA offices can help prospective buyers find a home in their area. They also have lists of approved lenders. In Chelan County, the current loan limit is $255,100.

FHA loans

Like the USDA, the FHA does not actually issue loans. It insures them, which provides lenders with a greater degree of protection. In turn, that protection helps many borrowers secure better rates.

FHA mortgages are favored by many first-time buyers. They come with little or sometimes no initial costs and are typically easier to obtain than many conventional loans. FHA loans require only a 3.5 percent down payment, although in some cases that can be reduced to zero. That down payment can come from a host of sources, from charitable groups to employers.

Borrower don’t pay mortgage insurance on FHA loans. Instead, they pay mortgage insurance premiums, which are typically split between an upfront payment and one that can be rolled into the monthly mortgage payment.

Buyers can utilize FHA programs that provide funding for home purchase and rehabilitation costs for single-family homes. Fixed rate and adjustable rate mortgages are available to qualified borrowers. Prospective homeowners can also use FHA loans to buy up to four unit buildings (as long as one is owner-occupied) and condominiums.

Geography dictates most FHA loan limits, which range from $271,050 to a maximum of $729,750 in high-cost areas. In Chelan County, the FHA loan limit for a single-family home is $342,700. For a three-family unit, the loan limit rises to $659,050.


We are seeing a lot of FHA and VA loans out here with relatively trouble. It helps that our market never completely folded. Good information and a great looking site. Michael

We have been seeing a lot more of both FHA and USDA loans lately. FHA loans don't have the stringent inspection problems that we saw 10 years ago, so they have come back into favor for qualifying buyers. USDA loans can be used anywhere in Chelan county except for within the city limits of Wenatchee. I currently have 2 sales in Cashmere that are both being sold with USDA loans. Neither program seems to be set up for quick closings and USDA is really backed up right now, so buyers may want to take that into consideration. What kinds of experiences have other folks had with these programs?

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Allyson and Geordie Romer

Leavenworth real estate agents - Allyson and Geordie Romer

For over a decade, Allyson and Geordie have been serving clients in the Lake Wenatchee and Leavenworth real estate market. Together, they work tirelessly to stay on top of the regional market and present the most relevant opportunities to their clientele.

When not in the office, they can be found exploring the endless recreation opportunities of the area in all of its seasons.




Geordie provided excellent real estate representation! We appreciated his detailed knowledge of the market, his up front and honest approach, and his negotiation skills.
As reviewed on Zillow  – 

- Laura Anderson



As “west siders” looking for a getaway near Leavenworth, Geordie provided insight … his knowledge of design features important in a “snowy winter wonderland” was appreciated. Thanks Geordie!
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- Jean Stern



Geordie made this somewhat complicated transition easier for us…going above and beyond to help us work through issues that came up during the sale of our parents home. We appreciated his knowledge, attentiveness to details and his willing spirit.
Our family is grateful for Geordie!
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- Terry Foster



Geordie was great in every way. We have been looking in the Leavenworth area for some time, and Geordie was absolutely the best for local knowledge, history and depth on neighborhoods, developments and the local market trends. He was very quick to respond (even when he was on his vacation) and worked very diligently to get all of our questions answered in a very timely fashion. We would recommend him highly to anyone looking to buy or sell a home. Very friendly, and helped us navigate all of the local options before we made an offer on the property that we purchased. Thank you, Geordie!

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- Ryan Olsen



It was such a pleasure to work with Geordie and his wife, Allyson on our cabin purchase. They showed us a variety of locations, listened to what we wanted and helped us find the perfect match. Everything was smooth and not stressful, just relaxed and easy. We would definitely recommend Geordie and use him again if the need arises!

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Moving to Leavenworth?

Are you looking for a cabin or a condo in Leavenworth that your family can use as a home base when climbing, skiing or hiking around Leavenworth or Lake Wenatchee?

Maybe you rent a house here and have decided to stay, surprised how a summer of rafting somehow turned into seven years.

Maybe it’s time to escape the hustle of the big city (and its rain) and move to Leavenworth with its four seasons.

Maybe you bought a condo years ago, don’t seem to use as much, and it’s time to sell.

Whatever your motivation, we are here to help. If you are buying a home, the best place to start is with our Homebuyer’s Guide to Leavenworth.