USDA Arizona
The purpose of the Arizona USDA loan program is to help moderate to low income families or individuals buy the home of their dreams with little to no money upfront. Arizona USDA home loans are also known as Section 502 loans. Under this section low to moderate income applicants can apply for direct home loans from the federal government, or can qualify for USDA backed mortgages from USDA approved traditional lenders. The Arizona USDA home loan program allows candidates to finance up to 102% of the actual selling price of the home, and require low monthly mortgage insurance, low closing costs, and absolutely no down payment. Money from a USDA home loan can be used to buy, repair, renovate, or relocate a home.
USDA Home Loans in Arizona was originally set up to encourage farming and economic assistance to struggling Arizona rural areas. However, the far reaching success of this program has allowed more flexibility under the USDA home loan code, which now allows for more borrowing flexibility including the purchasing of rural land, home refinancing, and covering the costs of important infrastructure and house repairs for rural residents.
Eligibility
One of the biggest qualifying factors to determine eligibility for a USDA home loan is the location of the property itself. To be eligible for a USDA home loan, your property must be within a USDA designated rural area. The definition of USDA designated rural areas often change from state to state, but are typically defined as any suburban or rural area or farmland, or any small community with less than 25,000 people. This means that not all USDA eligible areas are in the middle of desolate farming communities, but are often simply located on the outskirts of large metropolitan cities. For more information about a specific USDA eligibilty area, please contact your nearest USDA representative.
In order to qualify for an Arizona USDA home loan the borrower must be using the property in question as their primary residence. They are not allowed to rent out the property, or only occupy it on a temporary basis. The borrower must also be able to show that they have a stable credit history with no unresolved foreclosures, or bankruptcies, in the past year. They also must have a minimum FICO score of at least 640, with a score of 640 to ensure a streamlined qualification process. However, many Arizona lenders have been known to accept a credit score as low as 580, if they have steady and reliable income and can prove that they are paying off their debts.
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