USDA Loan Limit Update 2010

USDA Loan Limits have been raised from the 2009 USDA Loan Limits by a small bit.  The new USDA Loan Limits go into effect immediately.  Keep in mind that the USDA Loan has two types of qualifying income and there are items that can be subtracted from the income to help qualify for the USDA Loan.  There is also not a Maximum loan amount for the USDA Loan like there are for FHA Mortgage Loans.

Arizona USDA  Loan Income Limits for 2010:

APACHE COUNTY USDA Loan – St Johns AZ | Eager AZ | Springerville AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

COCHISE COUNTY USDA Loan – Benson AZ | Bisbee AZ | Douglas AZ | Sierra Vista AZ | Tombstone AZ | Willcox AZ | Huachuca City AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

COCOCINO COUNTY USDA Loan – Flagstaff AZ | Sedona AZ | Williams AZ | Fredonia AZ | Page AZ | Supai AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

GILA COUNTY USDA Loan – Globe AZ | Hayden AZ | Miami AZ | Payson AZ | Star Valley AZ | Windelman AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

GRAHAM COUNTY USDA Loan – Safford AZ  | Pima AZ | Thatcher AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

GREENLEE COUNTY USDA Loan – Clifton AZ | Duncan AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

LA PAZ COUNTY USDA Loan – Parker AZ  | Quartzsite AZ | and all surrounding area
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

MARICOPA COUNTY USDA Loan – Apache Junction AZ | Avondale AZ | Chandler AZ | El Mirage AZ | Glendale AZ | Goodyear AZ | Litchfield Park AZ | Mesa AZ | Peoria AZ | Phoenix AZ | Scottsdale AZ | Surprise AZ | Tempe AZ | Telleson AZ | Buckeye AZ | Carefree AZ | Cave Creek AZ | Fountain Hills AZ | Gila Bend AZ | Guadalupe AZ | Paradise Valley AZ | Queen Creek AZ | Wickenburg AZ | Youngtown AZ | and all surrounding areas
1 to 4 Person Household – $76,600
5 to 8 Person Household – $101,100

MOHAVE COUNTY USDA Loan – Bullhead City AZ | Kingman AZ | Lake Havasu City AZ | Colorado City AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

NAVAJO COUNTY USDA Loan – Holbrook AZ | Show Low AZ | Winslow AZ | Pinetop-Lakeside AZ | Snowflake AZ | Taylor AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

PIMA COUNTY USDA Loan – Tucson AZ | Green Valley AZ | Sahuarita AZ | Marana AZ | Oro Valley AZ | Vail Z | Catalina AZ | Mt Lemmon AZ | Redington AZ | Ajo AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

PINAL COUNTY USDA Loan – Apache Junction AZ | Casa Grande AZ | Coolidge AZ | Eloy AZ | Maricopa AZ | Florence AZ | Hayden AZ | Maricopa AZ | Mammoth AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

SANTA CRUZ COUNTY USDA Loan – Nogales AZ | Patagonia AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

YAVAPAI COUNTY USDA Loan – Cottonwood AZ | Peoria AZ | Prescott AZ | Sedona AZ | Camp Verde AZ | Chino Valley AZ | Clarkdale AZ | Dewey-Humboldt AZ | Jerome AZ | Prescott Valley AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

YUMA COUNTY USDA Loan – San Luis AZ | Somerton AZ | Yuma AZ | Wellton AZ | and all surrounding areas
1 to 4 Person Household – $74,050
5 to 8 Person Household – $97,750

To apply for a Guaranteed USDA Rural Home Loan click on the Get Started tab above or click here.  You can also ask a question about Guaranteed USDA Rural Home Loan on Get Started tab.

Ping list

USDA Loan Rural Development Update

The USDA Loan has been on hold with the Rural Development offices across the country as they “ran out” of funds for USDA Loans.  There are several bills on the table that would eliminate the funding problems for USDA Loans and one is being reviewed in the Senate right now.

The most immediate need for home buyers who need a USDA Loan is to get the funding going right now.  H.R. 4899 is the Disaster Relief and Summer Jobs Act of 2010 which the Senate is discussing today at 3:00.  If it passes it will provide $102.7 million to the USDA Loan program. That doesn’t sound like a lot, does it?

The way the USDA Loan guarantee works is that the buyer currently pays a 2% USDA Loan guarantee fee and the remaining 1.5% is subsidized by the USDA.  The replenishing of funds replenishes the subsidy, so $102.7 million could help provide USDA Loan guarantees throughout the end of 2010.

The other bill on the table is H.R. 5017 the Rural Housing Preservation and Stabilization Act of 2010 which would put the full 3.5% guarantee onto the home buyer and also introduce a monthly mortgage insurance payment for USDA Loans which would make it look more like an FHA loan product.

Once we hear more on the Senate discussion, we will post them here.  If it passes today, we could see lenders begin to fund USDA Loans right away.

To apply for a Guaranteed USDA Rural Home Loan click on the Get Started tab above or click here.  You can also ask a question about Guaranteed USDA Rural Home Loan on Get Started tab.

I’d love to hear your comments on this new way of funding USDA Rural Home Loans below.

USDA Loans May Go Uninterrupted

That’s right USDA Rural Home Loans get a reprieve.  Just this morning HR 5017 passed the House Financial Services Committee which is the first step to gaining perpetual uninterrupted funding for USDA Rural Home Loans.

Next, the USDA Rural Home Loan supporting bill HR 5017 moves to a vote in the House.

Once it passes, USDA Rural Home Loans will be self sustaining and not rely on tax payer dollars for continuation.

The USDA Rural Home Loan will have some changes, such as a possible increase of the USDA Guarantee Fee from the current 2% to a possible 4%.  The USDA Rural Home Loan may also begin to look more like an FHA product with the POSSIBLE introduction of a monthly mortgage insurance payment.

Even with an increased USDA Guarantee Fee and a possible monthly mortgage insurance payment, the USDA Rural Home Loan will continue to be the most cost effective way to buy a home with zero money down.

Stay posted for updates to this story.

To apply for a Guaranteed USDA Rural Home Loan click on the Get Started tab above or click here.  You can also ask a question about Guaranteed USDA Rural Home Loan on Get Started tab.

I’d love to hear your comments on this new way of funding USDA Rural Home Loans below.

Is the USDA out of Funds?

Last week the Rural Development’s national office in Washington DC issued a statement that the anticipate the funds to issue guarantees for USDA Rural Home Loans will be exhausted by the end of April.

Every year we see the same thing happen.  Last year the funds ran out in March and while many lenders pulled out of the market, we did continue to fund USDA Rural Home Loans.

This year looks similar in many ways and many lenders have already pulled the plug on USDA loan applications.  Wells Fargo is no longer accepting USDA applications from it’s mortgage brokers.

For us it is business as usual and we don’t expect to stop funding unless the Committee on Appropriations gives an absolute no on a special allocation of $12 billion to get us through to the end of the fiscal year in September.  We are confident Congress will provide the money considering what is at stake for housing and our national economy.

What can you do to help?

You need to contact your US Congressman, US Senator, professional lobby and employer to get them working on a solution because if this happens many homeowners will be left out on their loan closing because it simply won’t happen.

Please take 5 minutes and follow the links below to provide your support.

Write to your Congressman

Write to your Senator

Refinance USDA Rural Home Loan

Why It’s Time to Refinance Your USDA Rural Home Loan.. Now..

Many Arizona home owners who have existing USDA Rural Home Loan may be eligible for the program allowing for a Streamlined Refinance of their existing USDA Rural Home Loan into a lower fixed rate monthly payment.

But waiting a few more months to refinance your USDA Rural Home Loan might not be a good idea.

Here’s why…

The Central Bank has been buying mortgage backed securities in an effort to keep mortgage interest rates artificially low for a sustained period of time.  Their goal was to buy $1.25 Trillion in mortgage backed securities by March 2010.

Fed Chairman Ben Bernanke reiterated last Monday that the Fed’s buying program will end in March.  The Feds currently hold just over $910 Billion in mortgage backed securities.

So once the Fed’s effort to keep mortgage rates low ends in March 2010, rates should rise.

Highlights of the USDA Rural Home Loan Refinance:

• Refinance of an existing loan can be either a USDA Guaranteed Loan or a USDA Direct Loan
• Grandfathered eligibility even if the property is no longer in a USDA Rural Home Loan eligible area
• The refinance interest rate of the new USDA Rural Home Loan MUST be at least 1% lower than the existing USDA Loan
• May be able to refinance even if you owe more than your home is worth – No Appraisal Option
• May be able to refinance without an appraisal in most circumstances

Find out today if you can quickly and easily refinance into a lower payment USDA Rural Home Loan.

To Refinance your USDA Rural Home Loan click on the Get Started tab above or click here.  You can also ask a question about getting a refinance for a USDA Rural Home Loan on Get Started tab.

What’s the best USDA Rural Home Loan, the Guaranteed USDA Rural Home Loan or the USDA Direct Loan?

It’s important to note that the USDA Rural Home Loan is gaining enormous popularity in Arizona.  Primarily because it allows home buyers in qualifying areas to purchase a home with absolutely zero down payment and without the added expense of monthly mortgage insurance.  In most cases, the USDA Rural Home Loan is the least expensive loan to obtain and to maintain. There are two types of USDA Rural Home Loans;

1. Guaranteed USDA Rural Home Loan
2. USDA Direct Home Loan

Let’s look at the Guaranteed USDA Rural Home Loan first.  It allows you to buy in a rural designated area and has a higher income limitation than the USDA Direct loan.  It allows for applicants to have a Qualifying Income of up to 115% of the area median household income.  All of our Guaranteed USDA Rural Home Loans are based on 30 year fixed rate loans that carry similar interest rates to an FHA Home Loan.

The USDA Direct Loan is not as common as the Guaranteed USDA Rural Home Loan.  One reason is that they carry very strict income limitations for qualifying applicants.  You must have a low income (80% of the area median household income) in order to qualify.  Applicants also must be without adequate housing and be able to afford the housing payment including taxes and insurance, which can be up to 26% of the applicant’s monthly income.

If you are a low income family with an interest in the USDA Direct loan, you can get more information from the USDA here.

To apply for a Guaranteed USDA Rural Home Loan click on the Get Started tab above or click here.  You can also ask a question about Guaranteed USDA Rural Home Loan on Get Started tab.

USDA Rural Development – Queen Creek Map

We’ve just updated the USDA Rural Development maps section to now include the map for areas of Queen Creek Arizona that are eligible.  Buyers and real estate agents looking for USDA Rural Development qualifying homes in the Queen Creek Arizona area can print this map out and bring it along in the search for a home.  If at any time there are questions about a qualifying home, please call (520) 225-0380 for immediate assistance.

The majority of Queen Creek is eligible for USDA Rural Development financing.  This is great news as it allows more buyers in that area to qualify for the 102% financing provided through a USDA Rural Development home loan.  Not only does it allow for zero down financing but there is not any expensive monthly mortgage insurance like you will find with FHA or Conventional financing.

Here is a direct link to the Queen Creek AZ USDA Rural Development Map.

To apply for a USDA Rural Development Loan click on the Get Started tab above or click here.

What The USDA Rural Development Underwriter Looks For When You Apply… Part 2

This is part 2 of a 3 part series where we will look at the 3 most important factors that a USDA Rural Development underwriter will look at when reviewing your file for loan approval. If you have questions that are not addressed here specific to USDA Rural Development Property Qualifying, please ask them in the comment box below.  Also be sure to spread the word about USDA Loans by hitting the “RETWEET” button on the right.  Most people don’t know about the USDA Rural Development option and what benefits it can provide for a qualifying home buyer.

In the last post we looked at the first thing that a USDA Rural Development underwriter will look at when reviewing your loan application for loan approval, your credit.

Today we’ll look at the 2nd most important factor;

2.  The Collateral

While it may seem as simple as finding a house and buying a house, it isn’t.  The USDA Rural Development home loan has some specific collateral requirements that are unique when compared to FHA or Conventional loan financing.

Most importantly, the property must be located within a USDA eligible community.  The USDA relies on a combination of census data and/or the distance from urban areas when they determine if a community is eligible or not.  Under the USDA Rural Housing tab above, you can find a list of USDA Rural Development qualifying property maps for Arizona as well as a resource where you can check a specific property address (in any state, not just Arizona).

First let’s look at what collateral is generally acceptable for the USDA Rural Development home loan.

Eligible USDA properties include:

• Existing or New Construction homes
• Townhouses and Condominiums
• Existing or New Modular Homes
• Existing property in need of minor repairs (see notes below)
• Properties with swimming pools (see notes below)
• Properties with a shared well (An acceptable recorded HUD shared well water agreement will be required if the well is not on the subject property)

I know what you are thinking and I hear this question quite a bit;  “What about Manufactured Homes?”

While the USDA will issue a USDA Loan guarantee for a brand new manufactured home, there are very few lenders who will actually underwrite and fund a manufactured USDA Loan.  So if you have a manufactured home on your mind, check with your lender first to avoid a last minute disappointment.  Currently, we do NOT finance manufactured USDA Rural Development Loans.

An existing property that is in need of some minor repairs may still qualify for a USDA Rural Development home loan but there are some things you need to know, just in case you rush out and find a bank owned property in need of some fixing up.  They can be financed up to the “AS-IMPROVED” value of the home (as determined by a real estate appraisal) but the important factor is that the repairs and improvements must be completed before the final USDA Rural Development Guarantee can be issued.  This means that you would have to work with the seller to complete the repairs before funding.

Properties with swimming pools are allowed however the USDA Rural Development Loan amount will be based on the property value minus the value of the swimming pool.

Ineligible USDA Rural Development properties include:

• Farms and hobby farms
• Existing manufactured homes
• Income property such as a duplex (no 2-4 unit properties)
• Property located on a dirt road (all weather surface for the road is required)
• Property with Hauled Water (allowed on Indian Reservations)
• Property where the site value is more than 30% of the total appraised value

In summary, when considering a USDA Rural Development loan to finance your home purchase the first thing to do is to verify that the property is in a qualifying area (use the tab above).  The second thing to do is review the eligible property types and confirm it qualifies.

In the next post we will discuss the 3rd most important factor that the USDA Rural Development Underwriter will be looking at in your loan application file.

Please be sure to help get the word out about USDA Rural Development home loan financing options by hitting the “RETWEET” button above.  Thanks for reading and if you have any questions, please ask them in the comment box below.

To apply for a USDA Rural Development Loan click on the Get Started tab above or click here.

What The USDA Rural Development Underwriter Looks For When You Apply… Part 1

This is a three part series where we will look at the 3 factors that a USDA Rural Development underwriter will look at when reviewing your file for loan approval.  If you have questions that are not addressed here specific to USDA Rural Development Credit Qualifying, please ask them in the comment box below.

The USDA Rural Development Loan is not as familiar to people as other mortgage types.  Additionally it’s natural to be concerned about what an underwriter will be looking for when they delve into the depths of your personal Loan application.  After all, you’re supplying them with personal information in your quest to buy a home.  So I’d like to provide some quick insight as to the 3 things that a USDA Rural Development Underwriter is looking for when they review your loan application for that Loan approval.

1.  Your Credit

Yes, your credit is an obvious number 1 and it is the most important aspect of your loan decision.  It is one factor that you can actually have control over.  In an earlier post I wrote about USDA Credit Qualifying, but will go into more detail here.

Credit tends to come in three categories:

1. Good (Currently defined as a 620 middle credit score or better)
2. Bad (Less than a 620 middle credit score)
3. Thin (A lack of credit history often with no credit score)

While most USDA Rural Development lenders require a 620 middle score, some have been elevating that requirement to 640 or even 660 over recent months.  Credit Score Optimizing is beyond the scope of this post, but good advice may be all you need to boost your score enough to qualify.  If you have concerns about your score you should review your credit report with an experienced mortgage professional as some good quality advice may be all you need to get a few extra points.

Collections and bankruptcies are the predominate issues that the can cause concern.  The age and size of a collection will determine if it would need to be paid off or not.  AND different USDA Rural Development lenders will have their own specific requirements determining if a collection must be paid or not before closing.

The same can be said about prior bankruptcies.  Most USDA Rural Development lenders will require that a bankruptcy be discharged for 3 years before you can be considered for a USDA loan.  However with a high enough credit score, some lenders will allow you to qualify for a USDA Loan after only 2 years.  Consult your mortgage professional.

Length of Credit History

While the talk of the town on the credit front is mostly about credit scores and optimizing your credit to get that magical 620 middle credit score, there is one other credit factor that is often overlooked; Length of Credit History.

A credit score is supposed to be an indicator of the quality of your credit, but many times a “Thin” credit profile may artificially skew a score.  For this reason most USDA Rural Development lenders do have a minimum requirement for the Length of Credit History.

Most lenders will require a credit history to have:

• 3 credit trade lines (auto, credit cards, etc.); and
• 12 month active history for each of those three trade lines

Here it is important to note that the 3 trade lines do not currently need to be open or even active.  This requirement helps to assure that the credit scores reported are indeed accurate.

But I Don’t Have A Credit History…

If you are one of the many Americans with a Thin credit profile, meaning that you just don’t have a credit history, you can still get a USDA Rural Development Loan.  You can actually “build” a credit profile by providing a history of four sources of alternative credit that have been active for at least 12 months.

What qualifies as Alternative Credit?

• Increasing consistent deposits to a savings account
• Rent and Housing payments
• Utilities (electricity, water, gas, cable, phone, etc.)
• Insurance (medical, auto, life, renters, etc.)
• Local stores (department stores, furniture, etc.)

In the next post we will discuss the other 2 important factors that the USDA Rural Development Underwriter will be looking at in your loan application file.

To apply for a USDA Rural Development Loan click on the Get Started tab above or click here.

Apply online for a USDA Loan and get pre-qualified today.

USDA Loans CNBC Video

USDA Loans are gaining popularity as people find they can buy with Zero Down by using a USDA Rural Development Loan.

It’s a strange thought, but you can effectively use USDA Loans to get paid to buy a house.  Just put the USDA Loan to work for you AND if you are a First Time Home Buyer then you can qualify for the Tax Credit.

Check out the CNBC USDA Loans video.

Did you know that USDA Loans are less risky and have a lower default rate than FHA Loans?

In this video, CNBC shows why USDA Loans are gaining popularity with home buyers and also why builders are welcoming the USDA Loans as well.

To apply for a USDA Loan click on the Get Started tab above or click here.

Apply online for a USDA Loan and get pre-qualified today.