Get Pre-Qualified to Buy

While most people would say they want to buy a home, many feel a sense of dread if not fear when it comes to applying for a home loan.  Why, I’m not sure.  You do not need “great” credit so often their credit is good enough and there are down payment assistance programs if help is needed.

So how do you find out where you are and what’s available?

The only way to find out is to speak with a licensed mortgage loan professional who can give you the green light or tell you what you must do.

Add your details and a licensed mortgage loan officer will contact you.  It really IS that simple!

USDA HOME LOANS

USDA (United States Department of Agriculture) loans are another way for homebuyers to purchase homes with no down payment.  USDA loans are intended for the development of rural areas and are available for single and multi-family residences. Loans can be used to: purchase an existing home, build a new home, and rehab a home in need of repairs.

Since the major component of a USDA loan is location, not all properties will qualify.  Qualifications are quite lenient for buyers making it more likely you will qualify for a loan, but the home won’t.  Remember, the home must be in a rural location and that definition pushes properties farther away from cities than ever before.  Without general areas for funding, street addresses are used to determine acceptable homes*

Program Highlights:

No down payment (100% financing)

No first-time homebuyer restrictions

Competitive interest rates

Home must be owner occupied

Buyer must meet income eligibility requirements

Property must meet location requirement

Can be used for single and multi-family homes

*So how far must you go? 

From what I can tell, “some” homes in San Tan Valley, Casa Grande and Maricopa may be eligible when considering locations closest to the East Valley cities of Mesa and Chandler.

AZ USDA Rural Development for further investigation – but of course it’s easiest to Contact a Local Lender adding USDA to the subject line.

Arizona Home Financing

The best place to start is always at the beginning…

Your first item of business before you look at homes, is to get your purchase money in order.  If you aren’t paying cash, you’ll need home financing.

Unfortunately, it is with this first step that many homebuyers fail.  Not fail as to be be denied a mortgage.  They fail to make an attempt!  Don’t get bogged down fearing credit issues or a huge time investment.  The reality of the mortgage process is, it begins with a phone call!  You call a lender, provide your name, date of birth, social security number, employment info and income.  That’s it!  It takes a whopping 5 minutes with a pain level of zero.


The lender and/or loan officer you choose to work with is entirely up to you. Need a place to start?  Think of your bank or credit union since you already have a relationship with them.  Feeling uncomfortable?  Ask family, friends and colleagues for referrals. Don’t want to involve them?  Contact us.  We can provide referrals to experienced licensed mortgage professionals.

Don’t feel that you may be wasting anyone’s time.  Lenders get paid when they loan money and loan officers get paid when they originate and close loans.  The person with whom you will speak is compensated for their time and effort when your loan funds at close of escrow.  No one is doing you any favor to take or return your call.  You will become a paying customer.

What you need, what the Seller will need, what “we” need from your lender is a Pre-Qualification Form.  It will give us a price range and indication of monthly payment when searching for a home, and informs the Seller you are initially (financially) qualified to purchase their home should you decide to write an offer.

Okay – a quick list and brief explanation for types of home financing:

FHA – Available to most consumers as it is fairly lenient with debt to income ratios and credit criteria.  It currently requires a 3.5% down payment plus closing costs paid by either you or negotiated to be paid by the Seller. FHA charges both upfront and monthly MIP (Mortgage Insurance Premiums) to insure the lender against default. 

VA – Available exclusively to active or honorably discharged military personnel.  It’s true!  No down payment requirement!  No monthly Mortgage Insurance Premium!  Closing costs can be rolled into the loan amount or negotiated to be paid by the Seller!  VA has certain costs that cannot be paid by Veterans, and eligibility can be restored and used more than once.  For those who qualify, VA is currently the best mortgage product available. 

USDA – Primarily used to purchase homes in rural areas.  The term “rural” is quite subjective and this type of loan may be available exactly where you want to live!  No down payment with closing costs rolled into the loan or paid by Seller if negotiated.

Conventional – Requires high credit scores and down payment amounts of no less than 3%.  Monthly mortgage insurance premium if down payment is less than 20% of purchase.  Closing costs paid by you or negotiated to be paid by the Seller.
 

ARM – Adjustable Rate Mortgages usually begin with lower than market rates for a fixed period of 3, 5, or 7 years then adjust annually.  Adjustment annual caps and lifetime caps with highest and lowest rates disclosed.

Hard Money – DON”T DO IT unless you’re an Investor who will “hold” short term.  Hard money loans require high down payments and have stratospheric interest rates.  They are used most often for fix-up properties or those where an exact value is uncertain.  


Seller Financing – Generally requires a large down payment and interest rates that are at least “market.”  Must adhere to Dodd-Frank Act: fully amortizing, rules for balloon payments, fixed interest rate for a minimum 5 years, adjustable after 5 years with “lifetime” caps if the Seller has three or more transaction withing a 12 month period.  Other rules apply.  For more information, read: http://www.realtor.org/sites/default/files/seller-financing-impact-of-safe-act-dodd-frank-act-2011-07-05.pd

Portfolio Loans – These loans are held by the lender and not sold on the secondary market.  Underwriting requirements (e.g. credit, down payment, cash reserves, employment history, etc) will vary.

With regard to home financing, there are many options available to you.  We have only touched upon those most widely known.  Your lender will certainly know more and offer “the best”  after considering your income, credit, and debt. 

Take the first step.  If you don’t have cash, you cannot purchase.

Pathway to Purchase Down Payment Assistance

No down payment?  No problem!

“PATHWAY TO PURCHASE” DOWN PAYMENT ASSISTANCE IS AVAILABLE IN 12 ARIZONA CITIES!

Pathway to Purchase is a new program offering down payment assistance to home buyers who will purchase in specific areas.

The Arizona Department of Housing (ADOH), acting jointly with the Arizona Home Foreclosure Prevention Funding Corporation (AHFPFC) and the Arizona Housing Finance Authority (AzHFA), to provide down payment assistance to qualified homebuyers purchasing a primary residence in targeted zip codes within 12 Arizona cities.  The assistance is an incentive to purchase in targeted housing markets that have been hardest-hit by foreclosures.

The “Pathway to Purchase” (P2P) Down Payment Assistance Program offers a 30-year fixed-rate mortgage with Down Payment Assistance (DPA) as a second mortgage of up to 10% of the purchase price. The DPA second mortgage is a five–year forgivable lien against the subject property at a 0% interest rate and requires no monthly payments.  The down payment assistance (DPA) can be used toward the down payment and / or closing costs. DPA is only available in conjunction with a P2P first mortgage and is funded by AHFPFC / AzHFA at the mortgage loan closing. 

Pathway to Purchase Program Highlights:

  • Property must be an owner occupied as a primary residence in targeted areas
  • Borrower(s) income not to exceed $92,984.
  • Purchase price cannnot exceed $371,936.
  • Existing properties only, no new construction.
  • The DPA (down payment assistance) provided is 10% of the purchase price * up to a maximum of $20,000.
  • Fannie Mae HFA Preferred mortgages only.
  • The P2P Program is strictly limited to targeted zip codes in the cities of:
    • Bull Head City, Casa Grande, Glendale, Green Valley, Kingman, Phoenix, Rio Rico, Sahuarita, Sierra Vista, Tucson, Vail and Yuma.
    • Each borrower must complete a homebuyer education course before closing.  

Homebuyers MUST work through one of ADOH (AZ department of Housing) approved and participating mortgage lenders.  The lender is the Buyers contact throughout the process works and works with them qualify for a mortgage and their registration for the down payment assistance grant.

Home In 5 – Down Payment Assistance

No down payment?  No problem!

DOWN PAYMENT ASSISTANCE IS AVAILABLE IN MARICOPA COUNTY!

The Industrial Development Authority of the County of Maricopa and the Industrial Development Authority of the City of Phoenix, Arizona, have joined together to help homebuyers obtain FHA, VA, or USDA-RD loan financing to purchase a home anywhere in Maricopa County, including the City of Phoenix. Through the Home in Five Advantage program, individuals or families who qualify can obtain a 30-year fixed rate loan, with a non-repayable down payment/closing cost assistance grant. This program also includes qualified United States Military Personnel. Assistance is a grant and does not require repayment.

Program Eligibility

  • Homebuyers may purchase a home anywhere in Maricopa County, including in the City of Phoenix.
  • Buyers must occupy the home as their principal residence within 60 days of closing.
  • The program may only be used to purchase a home – you cannot refinance.

Homebuyer Eligibility

  • Buyers must have a minimum FICO credit score of 640 and maximum 45% debt-to-income (DTI) ratio.
  • Standard loan guidelines exist for qualification: adequate income and acceptable credit.
  • Maximum income limits (currently $99,169) apply.
  • Buyers must attend a home buyer education course and obtain a certificate of completion.

Homes that Qualify

  • New or existing single family residences
  • New or existing townhouses
  • New or existing condominiums
  • New or existing patio homes

HOME PLUS – Down Payment Assistance

No down payment? 

The HOME PLUS – Home Loan Program is here to help!

Knowing the hurdle from renting to buying is most often saving for a down-payment, HOME PLUS is a program designed to alleviate that burden. It offers credit worthy renters who can otherwise qualify for a mortgage the funds to move forward with a purchase.

Administered by the Arizona Industrial Development Authority, the HOME Plus Home Loan Program provides a 30-year fixed-rate mortgage with a down payment assistance (DPA) grant ranging from 0% – 5% depending upon the new underlying mortgage. The DPA is equal to a percentage of the initial principal balance of the mortgage loan.  DPA is only available in conjunction with a HOME Plus mortgage.

  • Property must be an owner occupied, primary residence in Arizona
  • Borrower(s) annual income not to exceed $99,170
  • Purchase price cannot exceed $396,680
  • At least one borrower (assuming two or more) must complete a home-buying education course
  • All borrowers must meet minimum credit scores as defined by the program

This program and all down payment assistance programs are offered through specific lenders.  If you think this program suits you and would like to speak with one, contact us. 

To read about this program, visit the Arizona Department of Housing 

Scroll to top