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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I have been trying to purchase an inventory home in the San Tan Valley area of Arizona. I meet all of the qualifications for obtaining an FHA or USDA loan but am being denied due to the fact that I work in Tucson at a job I have been established at for nearly 7 years. USDA and FHA are denying me the ability to obtain this loan because they say that my commute is too far, (less than 2 hours). They want me to obtain a job in the Phoenix area, which I am having trouble doing since the Phoenix area employeers don’t want to hire someone who does not have established housing in the local area. Catch 22 except that I can’t find one thing in the guidelines for the USDA or FHA loan programs that makes the distance one commutes a negative or deniable factor for obtaining one of these loans. The house I want is within my budget, within the area eligable for these loans, and my credit meets the guidelines. As a woman who is looking to get myself into a quieter and safer neighborhood, this feels remarkably as though I am being discriminated against. I am a registered nurse and even tried going the agency route. But USDA and FHA won’t accept that as employment. Now I don’t know what to do. This feels discriminatory, but since I have yet to find any documented proof that commuting distance is, or is not, a reason to deny someone a loan for a home, I am at a loss as to what to do next. If I lived in Benson or Bisbee and had to drive two hours to work, that would be all right and I could get the loan. But I can’t live in San Tan Valley and work in Tucson without being denied a loan to obtain safe housing.