Arizona USDA Loans Explained
Most people are not familiar with USDA loans. These are mortgage loans that benefit individuals who are looking to buy a home in an eligible rural area. The USDA loans are given through private lenders and are typically guaranteed by the United States Department of Agriculture, USDA. These loans are accessible to home buyers who have low-to-average income for their area and offer 100% financing with reduced mortgage insurance premiums.
The main point of these programs is to promote economic growth in rural and suburban communities throughout America. The Arizona USDA loans-Rural Housing Service, RHS are part of this bigger plan and benefit applicants who are unable to get credit from other sources. These qualified individuals can, therefore, get moderately priced homes to be their primary residence. Rural development loans are quite popular as they are accessible to around 97% of the population, which is over 100 million individuals.
Speak with an experienced USDA loan specialist immediately – (855) 501-5927
Benefits of USDA Loans
These loans are USDA guaranteed, and hence, lenders are ready to take on more risks and provide eligible applicants with better rates and terms compared to other loans. USDA loans are beneficial, especially to first-time homebuyers who could otherwise have not managed to afford the conventional 5-20% down payment. Some of the main benefits include
Flexible credit requirements
Low monthly mortgage insurance
Competitive interest rates
0% down payment
Types of USDA Loan Programs
USDA Direct- this loan program is designed for applicants who have a household income of not higher than 80% of the AMI, Area Median Income. The application must be made to the USDA Regional Office that is serving the area where the borrower is looking to buy the property. If you are looking to build, refinance the loan or renovate your home, then the direct program is ideal for you.
USDA Guaranteed- This is an option for applicants with an AMI that is higher than 80% but lower than 115%. USDA approved lenders can offer USDA Guaranteed Home loans under the Department of Agriculture guarantee. However, there are several requirements that the property must meet to qualify. This must be the primary residence and not allowed to be involved in any income-generating activity whatsoever.
One misconception that most people have is that Arizona USDA loans are linked to agriculture and are specifically designed for farmers. This is not the case, and the Arizona USDA loans aim at helping the smaller communities to thrive.
Therefore, if you’re looking to qualify for a USDA loan, then your desired home must not be in a big city’s limits but on the outer city’s limits. Also, the population in the area should not exceed 20,000 people. USDA home loan program is offered by The Arizona Mortgage pros, which is one of the few USDA approved lenders in the state. When applying make sure to have information regarding your credit history, assets, and income available as those are qualifying factors in the USDA loan process in Arizona.
To get additional information about the Arizona USDA loans, the restrictions and conditions, contact our home experts today. Make a wise financial decision with us.