100% USDA Loans in Arizona

January 26, 2010

Currently there are only a few loan programs that offer 100% financing.  The best avenue is a VA Guaranteed Loan but if you are not a qualifying veteran there is another option which is the USDA Rural Development loan program.

The USDA Rural Development loan program has some advantages and disadvantages compared to going the route of an FHA mortgage or Conventional mortgage program. 

  • No Down Payment – Truly a 100% home loan
  • No Expensive Monthly Mortgage Insurance – Keeps your monthly payment low
  • No Cash Reserve Requirement
  • No Minimum Credit History Requirement
  • USDA 100% Financing is a top choice among First Time Home Buyers
  • No Limitation to the purchase price
  • May finance up to 102% of the appraised value
  • Down Payment Assistance from non profits is acceptable
  • Repairs may be financed up to 100% of the “as is” value
  • No limits to the concessions the seller can make – seller paid closing costs
  • Rates are typically lower than FHA Home Loans or Conventional Mortgages

Some of the disadvantages of going with a USDA loan are as followed:

  • No Existing manufactured homes
  • Home location is restricted to specific Rural areas
  • Homes with pools may not finance the value of the pool
  • Higher upfront mortgage insurance
  • Income restrictions specific to county and occupancy size

Overall the USDA loan is a great program  and an option that should not be ignored. 

Steps to USDA Financing:

  • Make sure you meet the guideline restrictions for the county you wish to live in.  specially income restrictions.
  • Find out if the area you want to live is in approved for USDA Financing
  • Speak with a mortgage professional to decide if your credit, income and work history are sufficient for qualifying.

For further questions on USDA housing contact me at any time.