Do you know what the difference between USDA and FHA? With FHA you will have mortgage insurance or PMI (private mortgage insurance). 98% of home loans with less than 20% down-payment will have some sort of PMI (there are many types – call me for an explanation). At the time of this writing FHA PMI is at 1.35% per Month vs. USDA at 0.40% per month ~ a huge difference! While FHA allows you to purchase in a larger city – USDA is only for Rural areas. Those areas have changed many times in the past, so do not hesitate to call me to check on those areas that are still eligible.
The Rock River Financial, Inc main company page also provides some great details on the FHA program. Feel free to take a look at that page.