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USDA Loans in Arizona

February 28, 2010 1 Comment

USDA Loans in Arizona are a Great Alternative to FHA Loans.

Why?

Because USDA loans in Arizona have no down payment requirement AND your monthly payment will probably be lower.

How is this possible?

Because USDA loans in Arizona do not require mortgage insurance.

Consider the following example comparison:

A USDA loan in Arizona would save you almost $5000.00 in required down payment money and around $30 a month in payments.

Purchase Price: $135,000.00

FHA

  • USDA Loans in Arizona %spacebasenameMinimum Down Payment Required (3.5%) = $4725
  • Estimated Monthly Payment = $941.30 **
  • Interest Rate = 5.25%
  • Annual Percentage Rate = 6.044%
  • Term = 30 years

USDA

  • Minimum Down Payment Required (0%) = $0.00
  • Estimated Monthly Payment = $910.69 **
  • Interest Rate = 5.25%
  • Annual Percentage Rate = 5.730%
  • Term = 30 years

** estimated monthly payment includes an estimated $150 for taxes and insurance

The USDA loan program in Arizona was created to help potential homeowners in rural areas; however, it can be used in the outskirts of some of Arizona’s major metropolitan areas where many of the most affordable homes are currently located.

The following are USDA Loan Program Highlights:

  • No down payment requirement.
  • No monthly mortgage insurance, 1-time guarantee fee of 2% that you finance into the loan.
  • 102% Financing based on appraised value, if appraised value exceeds sales price, borrower can finance closing costs and repairs
  • 30 Year fixed term
  • No minimum cash contribution requirement
  • No asset requirements.
  • Borrowing of unsecured funds for closing allowed (with minimum credit score requirement).
  • No First Time Homebuyer restrictions.
  • No maximum on seller concessions and 100% gifting is allowed – You can purchase a home with no money of your own into the transaction.
  • Previous housing payment is not required.
  • Declining markets do not affect LTV.

USDA Property Eligibility and Income:

If you are ready to save a lot of money, contact the AZ USDA Loan Experts with questions and for more information today.

Steve Lines, Academy Mortgage

480.580.1400

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USDA Loans: Still Looking For 100% Financing?

February 9, 2010 2 Comments

USDA Rural Housing Loans Are Still Available

With the changes in the mortgage industry over the last several years, basically all but one 100% financing loan program have been eliminated. The current rate on the USDA loan is around 5.25% with NO monthly mortgage insurance.

This gives a lower payment than the FHA loan with 3.5% down at the same loan amount and interest rate.

Listed below are some of the basic highlights and guidelines of the program:

  • 30 Year Fixed Rate (Comparable to Conventional 30 year)
  • No Monthly Mortgage Insurance
  • Not subject to Declining Market guidelines
  • No Minimum Cash Contribution from Borrower
  • Gift Funds Allowed (if needed)
  • One Time Guarantee Fee of 2% (May be Financed)
  • Maximum Loan to Value – 102% of Appraised Value
  • 2% Guarantee Fee financed
  • Closing Costs can be Financed up to 100% of appraised value!!!
  • Seller Concessions up to 6%
  • No Reserve Requirement
  • Minimum Credit Score typically 620
  • Debt to Income Ratio’s of 31/43(housing/total debt)
  • Exceptions encouraged with compensating factors
  • Eligible Geographic Locations
  • City of Buckeye
  • Pinal County (except for Apache Junction)
  • Maximum Income Restrictions (Per Household)
  • 1-4 Person – $75,750
  • 5-8 Person – $100,000
  • Primary Residence Only (Cannot own any other properties in the State of AZ)
  • Escrow Holdbacks – Not Allowed

USDA has published some anticipated guideline changes in the future, so now would be the time to take advantage of the program before the new guidelines take effect.

I will continue to follow up and make updates as new changes to the program are released!

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100% Financing USDA Home Loans

January 21, 2010 2 Comments

The USDA home loan is definitely an underutilized loan in Arizona.

We have many areas around Phoenix that are an easy commute to Phoenix. The biggest areas for USDA are Buckeye, Gilbert, Queen Creek and North Phoenix (including Anthem).

Many people think you have to live in the sticks in order to get a USDA loan, but this is not true. Did you know that even Seville Golf and Country Club in Gilbert is eligible for USDA? That’s right the only private golf club in Gilbert is USDA eligible.

Not only is USDA 100% financing but it also has NO monthly mortgage insurance. Depending on your loan amount this alone could save you over $100 per month when compared to an FHA loan.

The interest rates for USDA are also comparable to FHA.

Another huge benefit is the ability to roll the closing costs into the loan if your home appraises for more than the purchase price.

You can also escrow for repairs if the home is in need of a rehab. There is no other loan that offers all of these befits and capabilities into one loan.

Combine a 100% USDA loan with the $8000 tax credit….. now that’s a smokin’ deal!

Want more information on USDA loans?

Email or call for more information.

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USDA Loans: 5 Reasons You Will Love The USDA Loan Program

January 30, 2009 4 Comments

I am working with a client who is buying a house in Queen Creek and he asked me “why doesn’t everyone know about USDA loans?”

Good question.

Here are just a few of the reasons that USDA loans are quickly becoming a loan program that people love to use.

USDA Loans: A True 100% Home Loan

With the USDA loan program, no down payment is required and you are able to finance up to 102% of the property’s appraised value. With the elimination of the down payment assistance programs in late 2008, the USDA loan program is one of the only 100% loan programs available.

USDA Loans: No Up Front or Monthly Mortgage Insurance

With the USDA loan program, there is no up front or monthly mortgage insurance required. With the FHA loan program, you have both up front mortgage insurance premium and monthly mortgage insurance as well.

With no mortgage insurance required, the USDA loan program can save you hundreds (possibly even thousands) of dollars each year that mortgage insurance would cost with a different type of loan.

USDA Loans: No Credit Score Required

For the USDA loan program, officially, there is no credit score required… but unofficially, the minimum credit score that you will need to get approved by an investor is 620. This is relatively recent and may change back to the official answer — but for now, you need a 620 mid FICO score to qualify for the USDA loan program.

USDA Loans: No Loan Limit

The USDA loan program will allow you to finance “as much as you can afford”. There is no official loan limit with the USDA loan program, but the amount of money that you can borrow depends on your ability to repay the loan.

USDA Loans: Seller Concessions Are Allowed

With the USDA loan program, you can get the seller to pay as many of your closing costs as you can. There are no limits on “seller concessions” so negotiate the best deal that you can! Many loan programs limit the amount of seller concessions that you can have, but the USDA loan program doesn’t put a limit on them.

The USDA loan program is a great option for people who are looking to buy a house with little or no money down.  The only “bad” thing about the USDA loan program? The only thing that I can think of is that you will have to find a property that can qualify – and sometimes you may have to drive a ways to get there.

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USDA Loans: Highlights of the USDA Loan Program in Arizona

January 6, 2009 1 Comment

When FHA made the move to outlaw seller contributed gift funds, the USDA loan program became one of the two programs of choice for buyers looking for 100% financing (VA being the other).  Some of the highlights of the USDA loan program include:

  • No down payment – true 100% financing
  • No monthly mortgage insurance
  • No cash reserves required
  • No asset limits: you may keep liquid cash savings and other investments
  • Not just for first time homebuyers – anyone may qualify
  • Loan up to 102% of the appraised value – the 2% guaranteed fee may be added to the loan amount regardless of appraised value.
  • Competitive 30 year fixed interest rates

Eligible USDA Rural Designated Areas in Arizona

In order to qualify for a USDA loan, the property that you are buying needs to be located in a designated “rural” area. To see whether or not a property is eligible for USDA financing, you can see the USDA eligibility map and search by property.

If you are considering purchasing a house in an area that is designated “rural”, the USDA loan is a tough option to beat in todays market.

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