Down Payment Assistance Programs: Arizona USDA Loan

When it comes to buying a home in Arizona, many are aware of FHA and VA loans, but don’t know that there’s a third government loan program available to Arizona home buyers: the Arizona USDA Loan. Originally created to assist potential low- to moderate-income purchasers in rural areas, the USDA loan is designed to help people living in rural communities obtain homeownership. Despite what the name may have you believe, however, they’re not just for the agricultural demographic. In fact, this loan type is popular with recent college graduates, low-to-moderate income earners and/or those with past credit difficulties, first time buyers, and newly-formed households.

A great benefit of an Arizona USDA loan is there’s closing cost assistance. Though his doesn’t necessarily mean you can leave your wallet at home to close your purchase, as there are additional costs tied to the mortgage such as interest, taxes, and insurance. However, the USDA down payment assistance Arizona programs can extend grant money to cover most of these costs so as to keep out of pocket payments minimized.

Other great features of the USDA loan are that there’s no down payment requirement, competitive interest rates are available, and as previously mentioned, it can be used in conjunction with down payment grants to cover closing costs. Additionally, there are no first time homebuyer restrictions and flexible underwriting guidelines to make qualifying easier than other loan programs. No minimum cash contribution requirement is present and both seller concessions and 100% gifting is permitted. A USDA loan has the potential to allow for a home to be purchased with no personal money involved, which is pretty outstanding.

While AZ USDA loans are an important loan program featuring 100% financing, grant money to cover closing costs comes from the Home Plus program. Consequently, no down payment is needed. Currently, the Home Plus USDA loan program is available anywhere in Arizona outside of Maricopa and Pima counties. To qualify and receive down payment assistance up to 2%, you’ll need a minimum FICO score of 640, a maximum debt-to-income of 45%, and a maximum income of $105,291. Eligibility is open to anyone who intends to occupy in permitted rural locations and is based on said home’s location. You can see if your home-to-be is eligible for USDA financing by clicking this link.

In the event of having some blemishes on your credit score, there are some standard waiting periods. For those who have experienced a chapter 7 or 13 bankruptcy, you’ll need to wait three years and one year, respectively, to obtain. Following a foreclosure, a waiting period of three years is required as of the date of foreclosure. After a short sale, the window to achieve a USDA loan is, on average, three years.

To obtain more information on a USDA loan and to learn if it’s the right fit for your purchase, reach out to a licensed Geneva loan officer and set up a consultation.

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