Do you know the difference between USDA and FHA? With FHA or USDA 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. So even though both of these programs have Mortgage insurance USDA premiums are about 70% less than FHA.