How do Los Angeles Conventional and USDA Loans differ? Conventional loans are available to home buyers in all areas of the US. However, USDA loans are only available in qualifying rural areas. So how else do they differ? Key Differences between the two Loans Compared to other loan options, USDA loans are very affordable. While there are no maximum limits on income with conventional loans, USDA loans have limits that vary by city and state. Lenders will take the incomes of every household member into consideration when evaluating USDA loan eligibility, not just the individuals named on the loan. Furthermore, you’re not required to purchase PMI (Private Mortgage Insurance) on a USDA loan. However, you will be required to pay a guarantee fee that is similar to PMI. If this fee is paid up front, the rate will usually be 1% of the loan principal. You are also given the option to include the guarantee fee in your monthly mortgage payment. The guarantee fee will be less expensive than Private Mortgage Insurance. Conventional mortgages are notorious for changing their interest rates on a daily basis. They are slightly lower than those of an FHA loan and slightly higher than interest rates on VA loans. Shannon Christenot 700 Flower St #1000 Los Angeles, CA 90017 (818) 601-2231 Hours: Monday-Saturday 9am-5pm https://www.google.com/maps?cid=5645542632766781645 https://local.google.com/place?id=5645542632766781645&use=posts&lpsid=1250757871156268492