USDA Home Loans
Queen Creek & San Tan Valley AZ Homes May Qualify For 100% Financing
Did you know there's still a mortgage loan option out there in today's housing market that allows a buyer to finance 100% of the home price? That's big, when almost every loan requires some kind of down payment.
A USDA Home loan offers the following benefits to a Queen Creek AZ Home buyer:
ü ZERO down payment
ü Lower monthly payments than most FHA loans
ü Allows the Seller or friend or relative to assist and pay for ALL Closing Costs
ü Quick closing (as little as 30 days)
ü You Could Potentially Move in With Less Out of Pocket Than Renting!
ü Get your Earnest Money Deposit back at closing
ü Minor repairs and eligible closing costs are also allowed to be rolled into the financing. This loan actually allows a little more than 100% in some cases, letting the borrower make some minor improvements. With your first home, there are often some projects you'll need to do after moving in.
ü No pre-payment penalty. With no down payment requirements, you may end up with cash on hand to help you get ahead. In a couple years, you may find yourself ready to pay more and pay it off early. You won't be punished for this!
Do you qualify?
There are only a few requirements that you must meet in order to be eligible for a USDA home loan
The first is that the home must be located in a designated USDA rural area, like Queen Creek AZ and San Tan Valley AZ. Check out this map of Queen Creek. The areas South of E Germann Road and East of S Power Road are areas that qualify for the USDA Loan.
The good news is that if the Arizona home is located within a qualifying area, there are only a few other eligibility requirements to meet. While one is a credit evaluation, you should note that these guidelines are flexible – meaning that you must demonstrate the ability and willingness to meet obligations as they become due. It is unusual that someone with a credit score below a 600 will qualify, however, it is not impossible. If there is a specific credit score requirement, that would be a Lender specific requirement, not a USDA requirement.
When you do select a home, the USDA requires that it be “modest in size, design, and cost.” Those are awfully vague requirements—their best clarification is that this judgment of modesty is relative to your area—but it shouldn’t come as a surprise: as a loan program that helps a broad spectrum of homeowners, the USDA wouldn’t want to subsidize excess. They’d rather use those funds to help more families. It follows that luxurious home features are ineligible for USDA help.
So.....for example: It is very common for someone to want to purchase a home with a private pool in AZ. Unfortunately, that is not so easy to do with a USDA loan....but it is NOT impossible. If someone is purchasing a home with a pool, the value that the appraiser gave for the pool in the appraisal is deducted from the appraised value to get the maximum loan amount. This ultimately means that the home must appraise to the full purchase price without adding any value for the pool.
The other issue is a maximum income limit. In Queen Creek and San Tan Valley, AZ, USDA Home buyers do have income restrictions. For Households of 1-4 persons, income cannot exceed $73,600. For Households of 5-8 persons, total income cannot exceed $97,150.
Also, you can’t have too much monthly debt. Your debt to income ratios should fall in line with the 29/41 debt to income ratio, but exceptions can be made. I have seen people qualify if their monthly debts plus future monthly house payment do not exceed 50% of their gross monthly income.
If you are interested in purchasing a home in AZ and curious if you might qualify for a USDA loan, contact me today and I will connect you with some of the best approved USDA lenders in the mortgage financing biz…..and then we can start home shopping!