USDA Vs. FHA Loans For Cohocton Buyers

January 15, 2026

Thinking about buying a home in Cohocton and not sure whether a USDA or FHA loan fits you best? You are not alone. Both options help many first-time and repeat buyers in Steuben County get into a home with flexible rules and low cash to close. In this guide, you will see how each loan works, who qualifies, what it can cost over time, and the exact tools you can use to verify your eligibility today. Let’s dive in.

USDA vs. FHA at a glance

USDA Single-Family Housing Guaranteed Loan

Zero down payment for eligible buyers and properties.
Property must be in a USDA-eligible rural area and be your primary residence.
Household income must fall within area limits.
Backed by USDA Rural Development, issued by approved lenders.
Learn more on the USDA Guaranteed Loan page, then verify your address and income with the official USDA eligibility tool.

FHA mortgage

Minimum 3.5% down with qualifying credit.
No rural location requirement; property can be anywhere that meets FHA standards and local loan limits.
No program-wide household income cap.
Insured by HUD/FHA, issued by approved lenders.

Local context in Cohocton

Cohocton is a small, rural community. Many addresses in and around town are often USDA-eligible, but you must check the exact property address on the USDA map. Lower area price points can pair well with USDA’s zero-down feature, though your income, credit, and property type will guide your best fit.

Eligibility: who and where

Occupancy and residency

Both USDA and FHA require you to live in the home as your primary residence. These are not designed for most investment properties or second homes.

Property location rules

USDA: The home must be in an eligible rural area. Use the USDA property eligibility tool to check an exact address in Cohocton or nearby communities.
FHA: No rural-area rule. The property simply needs to meet FHA standards and loan limit rules for the county.

Income and household size

USDA: Your total household income must be within the program limit for Steuben County. Limits vary by household size. Verify your household figure with the USDA eligibility tool.
FHA: No program-wide income cap. You must show stable income that fits lender debt-to-income guidelines.

Credit scores and underwriting

USDA: There is no single federal minimum score, but many lenders look for around 620. Some may approve lower scores with strong compensating factors.
FHA: HUD permits 3.5% down with a 580+ score. Scores between 500 and 579 may qualify with a 10% down payment. Lenders can set higher internal minimums.

Citizenship and documentation

Both programs allow U.S. citizens and eligible non-citizens. Expect standard documents like pay stubs, W-2s or tax returns, and bank statements. USDA also verifies household income for program limits.

Costs: down payment and mortgage insurance

Down payment

USDA: No down payment required for eligible buyers and homes. You can finance up to the appraised value, subject to program and lender rules.
FHA: Minimum 3.5% down with a 580+ credit score. Buyers in the 500–579 range typically need 10% down.

Upfront fees

USDA: There is an upfront guarantee fee that most buyers finance into the loan. Historically, this fee has been about 1 percent of the loan amount, but you should confirm the current rate with your lender or on the USDA program page.
FHA: There is an upfront mortgage insurance premium (UFMIP), typically 1.75 percent of the base loan amount, which most buyers finance. See HUD’s mortgage insurance premium guidance for current details.

Monthly mortgage insurance and duration

USDA: You will pay an annual fee, billed monthly, for the life of the guaranteed loan. Historically this fee has been about 0.35 percent of the outstanding principal. Confirm the current figure with your lender.
FHA: You will pay annual mortgage insurance premium (MIP) monthly. For most loans originated after June 3, 2013, if your original loan-to-value was 90 percent or less, MIP lasts 11 years; if it was greater than 90 percent, MIP lasts for the life of the loan. Check HUD’s MIP page for specifics.

Rates, closing costs, and seller help

Rates are set by lenders, not the agencies. Compare quotes for both programs and include the financed upfront fee in your math.
FHA allows seller concessions toward allowable closing costs up to 6 percent of the purchase price. USDA also permits third-party contributions, but limits and uses vary by lender and program interpretation. Ask your lender for a written breakdown.

Property and appraisal rules in Cohocton

Property types

USDA: Common for single-family detached homes and some manufactured homes that meet program rules. Condo approvals can be more involved and depend on the project and lender review.
FHA: Works for single-family homes, approved condominiums, and certain manufactured homes. FHA has clear condo approval pathways. Review HUD’s condominium guidance for details.

Condition and appraisal

USDA and FHA appraisals both check for basic health and safety. Required repairs usually need to be addressed before closing or, in some cases, through limited escrow.

Renovation and repair options

FHA: The 203(k) program can finance repairs and renovations into your mortgage, helpful if you find a home that needs work. See HUD’s 203(k) page for how it works.
USDA: Larger renovation financing is more limited within the guaranteed loan. Separate USDA Single-Family Housing Repair Loans and Grants can help very low-income homeowners after purchase. Learn more on USDA’s repair programs page.

Loan limits and maximum amounts

FHA sets county-level loan limits. Check Steuben County’s current cap using HUD’s loan limits tool before you shop.
USDA guaranteed loans do not use a county-by-county cap like FHA. Lenders will size your loan based on eligibility, income, and underwriting guidelines.

Which loan is better for you?

Choose USDA when

The property address in or around Cohocton is USDA-eligible.
Your household income fits USDA limits.
You want zero down and can accept an annual fee for the life of the loan.

Choose FHA when

The property is not in a USDA-eligible area.
You have a lower credit score that still meets FHA options, or you prefer FHA’s broader property type options.
You plan to buy a condo that can be FHA-approved, or you want to finance repairs with a 203(k).

In many cases, you will run both scenarios with a lender and compare monthly payment, cash to close, and long-term insurance costs. Ask for a written loan estimate for each program.

How to confirm eligibility today

Check the property address for USDA

Use the USDA property eligibility tool and enter the exact address in Cohocton. If you do not have a home picked out yet, zoom into your target neighborhoods to see eligible zones.

Check your USDA income fit

In the same USDA eligibility tool, review income limits for Steuben County based on your household size. Include all household members as the tool instructs.

Confirm FHA loan limits for Steuben County

Use HUD’s FHA loan limits tool to make sure your target price falls within the county maximum.

Verify current mortgage insurance rules

Review HUD’s mortgage insurance premium page for FHA, and confirm USDA’s current guarantee fee and annual fee on the USDA Guaranteed Loan page or with your lender.

Evaluate property type and condition

For condos, manufactured homes, or properties needing work, confirm eligibility early. FHA condo rules are published by HUD. USDA condo eligibility can vary by lender review.

Your local next step

You do not need to figure this out alone. If you are comparing homes around Cohocton, a quick conversation can save time and help you focus on the right loan path before you make an offer. Reach out to schedule a buyer consult, get introductions to local lenders who work with USDA and FHA, and start a focused home search. Connect with Justine Fox to get started.

FAQs

Is a home in Cohocton likely USDA-eligible?

Use the official USDA property eligibility tool to check the exact address; many rural Cohocton-area locations qualify, but you must verify.

What are USDA income limits in Steuben County?

Limits depend on household size and update over time; confirm your number using the USDA eligibility tool for Steuben County.

How much down payment do I need for each loan?

USDA can be 0 percent down for eligible buyers and properties; FHA typically requires 3.5 percent down with a 580+ score, or 10 percent with a 500–579 score.

How long will mortgage insurance last on my loan?

USDA’s annual fee usually lasts for the life of the guaranteed loan; FHA MIP duration depends on your original LTV, with many post-2013 loans requiring MIP for 11 years or for the life of the loan.

Can I buy a condo or manufactured home with these loans?

FHA supports approved condos and certain manufactured homes; USDA allows some manufactured homes and may allow condos with lender review, so confirm eligibility before you write an offer.

Can the seller help with my closing costs?

FHA allows seller concessions up to 6 percent toward allowable closing costs; USDA also allows third-party contributions, but limits and uses can vary by lender and program rules.