A USDA loan and an FHA loan are both government-backed mortgages that offer low interest rates and don't require a large down payment. But there (are) some differences between the two.
First, with a USDA loan, you must live in an eligible rural area in order to qualify for the loan. With an FHA loan, you can buy a home almost anywhere as long as you meet the credit score requirements! Additionally, while USDA loans do not require private mortgage insurance (PMI), FHA loans do. This is something to consider when deciding which type of loan is best for you.
Furthermore, the maximum amount you can borrow with a USDA loan is typically lower than with an FHA Loan (though this varies by state). Also, if your credit score isn't that great, it's more likely that a lender will approve your application for an FHA Loan than for a USDA Loan.
On the other hand though, closing costs on a USDA Loan are usually lower than those associated with an FHA Loan. Plus, most lenders offer flexible repayment terms on USDA Loans such as adjustable rate mortgages or interest-only payments whereas these aren’t always available through FHA Loans.
In conclusion, both loans have their advantages and disadvantages depending on where you live and what type of property you're looking to purchase. By weighing up all the pros and cons carefully before making your decision - You'll be able to make sure you choose the right option for your needs!