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Sedona AZ USDA purchase home loan program, who does them

July 31st, 2019 5:01 PM by Nathan Rufty

The Sedona AZ USDA rural housing guaranteed loan program requires that you meet certain eligibility requirements related mostly to income and the property you want to buy.  A great aspect of USDA loans is that the way you qualify is actually very different than it is with other home loans, such as conventional and FHA mortgages. While other programs require you to show more income, better credit, and more assets, the USDA is actually looking for those who may have a harder time getting a loan (you can still qualify with excellent credit, and even some assets, but not too much income).

Sedona AZ USDA purchase home loan

Sedona AZ USDA Home Loan Requirements

  • Credit Requirements:  A minimum credit score of 620 is required to get a USDA loan. Occasional exceptions are made, but this is the standard credit requirements for the guaranteed loan program.  Some lenders are known to accept lower credit, but we have a minimum 620 requirement.
  • Income Requirements: Income is limited to 115% of the median income for Sedona AZ.  This means your household income can not be more than 15% above the median income.  The calculated income limits (median income x 115%) for the USDA guaranteed loan in Sedona AZ are:  For 1-4 people you can have a combined total annual household income of up to $82,700.  For a household with 5-8 people (or more) the total household income can be as high as: $109,150.  The number of persons includes you, your spouse, your children, and anyone else living in your home.  Want to see more information or verify your income eligibility?  The USDA has a very useful income eligibility tool which allows you to calculate your eligible income, make certain deductions, and then see if your income qualifies.
  • Owner Occupied: No rental properties are allowed.  You must occupy the home you want to buy with a USDA loan.  Another requirement is that the home be either a single family residence, or a condo.  Some other USDA lenders in Sedona AZ will allow mobile or manufactured, but we do not offer USDA loans for these property types.
  • Property Eligibility: USDA loans are intended for rural development and therefore exclusively available for homes in rural and select suburban areas.  Fortunately, most of Sedona AZ is in an eligible zone.

Sedona AZ USDA Home Loan Benefits

  • No Down Payment: What is possibly the single most well known benefit of a USDA loan is that they do not require any down payment.
  • Finance Your Closing Costs: You can include the closing costs (loan origination, appraisal, upfront mortgage insurance, etc.) into the loan.
  • Easy to Qualify: The requirements to be eligible are relatively easy compared to conventional loans.  However, they are not available to high income households or in larger cities.  The programs offered by the USDA often are the only mortgage loans available to applicants, which means it can make the difference of someone being able to own their own home or not.
  • Low Mortgage Insurance: The monthly mortgage insurance on USDA loans, called the “guarantee fee” is lower than it is for other government-backed mortgages such as FHA loans.  For USDA guaranteed loans, the monthly guarantee fee is 0.50% of the loan amount, and is adjusted each year as the loan balance decreases, therefore resulting in monthly mortgage payments being lowered annually.
  • Fixed Interest Rates: All USDA home loans are provided on a fixed mortgage rate.  This means that the interest rate stays the same and does not adjust or fluctuate like they do with an adjustable rate mortgage (ARM), which can cause sudden spikes in rates and payments.
  • Higher Loan Limits:  While other loans such as FHA, VA, and conventional loans have strict loan size limitations, there are no such loan limits placed on USDA loans.  This means that if you qualify, you might be able to get a nicer home with a USDA loan than a FHA other other type of loan.

Don’t delay further! Your one step towards USDA mortgages in Sedona AZ can help you to materialize your dream of owning your own home; at your own conditions. To start right away, please call us at (623) 850-1210.



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