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Yuma AZ USDA purchase home loan program, who does them

July 10th, 2019 2:55 PM by Nathan Rufty

With loans available to home buyers in rural areas and financing assistance to those who qualify, a USDA loan can help you make the dream of homeownership a reality in Yuma Arizona.

Yuma AZ USDA loans are mortgages backed the U.S. Department of Agriculture as part of its USDA Rural Development Guaranteed Housing Loan program. USDA loans are available to home buyers in rural areas and offer 100% financing with reduced mortgage insurance premiums, and feature below-market mortgage rates.

The USDA Rural Development loan program provides low- and moderate-income households the opportunity to own a primary residence in eligible rural areas. It provides options for no down payment and low monthly mortgage insurance which saves you thousands. 

With a USDA loan, eligible applicants may build, rehabilitate, improve or relocate a dwelling in a rural area. You do not need to be a first time homebuyer to be eligible for this program. Gift funds are also accepted for any out of pocket fees including closing costs.

USDA Guaranteed Home Mortgage Loans are the most common type of USDA Loan in Yuma AZ and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. Area income limits for this program can be viewed here. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate.

USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households, as defined by the USDA. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Click here to see area income limits for this program.

Yuma Arizona USDA Home Loan Benefits

  • No down payment
  • Low mortgage insurance premium
  • Competitive mortgage rates
  • High debt-to-income ratios accepted
  • Great for low income households

Eligibility Factors for a Yuma AZ Rural Development Loan?

There are several things used to determine a borrower’s eligibility.  The first thing to consider is credit score. While USDA doesn’t set a min score most lenders require a 640 or higher. The next consideration is debt to income ratio. A standard approval requires a housing ration of no more than 29%. This means the total home payment each month cannot exceed 29% of the borrower’s gross income. Additionally a borrower’s total debt including the housing payment cannot exceed 41% of the monthly gross income. These ratios can be exceeded with compensating factors. Applicants for loans may have an income of up to 115% of the median income for the area. Maximum USDA Guaranteed Loan income limits for your area can be found at here. Maximum USDA Direct Loan income limits for your area can be found at here. Eligible families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance.

Maximum USDA Loan Amount

USDA Loans actually do not have a maximum loan amount. The debt-to-income ratio will determine the maximum loan amount on each loan because the borrowers will be limited on loan amount by the ratios set forth. As stated earlier, the max ratios are 29% and 41%. Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area. Maximum USDA Guaranteed Loan income limits for your area can be found at here. 

Maximum financing: The maximum USDA Rural Development Loan amount is 102% of the appraised value of the home (100% plus the 2% USDA RD Loan guarantee fee).

How much money will I need for the down payment and closing costs?

USDA Rural home loans do not require a down payment. Borrowers can get 100% no money down loans.

What are the allowable property types for USDA Home Loans?

USDA requires all loans to be for Owner Occupied properties. The different types of allowable properties are SFR, Condos, Manufactured Homes, and PUDs. Lenders will determine whether or not a property is eligible.

Please call Nathan Rufty at (623) 850-1210 to receive a free consultation on USDA Home Loans in Yuma Arizona.



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