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The Ultimate Guide to the Best Money Saving Programs for New Buyers in Arizona

Traditionally, homeownership is the most cherished lifetime achievement. Unfortunately, the thought of buying a home in Arizona, and other top-rated cities can be downright scary. However, with the different Arizona home buying programs, the dream is never far from reaching.

Are you buying a house in Arizona for the first time? Different home buying programs will help you to achieve your dream. In this post, we look at some of the top home-buying programs for new buyers in Arizona. I will take you through the requirements to qualify for each of the home buying programs listed here.

  1. The FHA Home Loan

The Federal Housing Administration home loan was introduced for the first time in 1934, at a time when the housing industry was struggling. Insured by the Federal Housing Administration, the FHA loans are intended to benefit the first time home buyers who have a low credit score and cannot afford the 20% down payment required for conventional loans.

The FHA home loan is issued by the private banks and credit unions, with the Federal Housing Administration covering to repay the loan in case the borrower defaults. Thus, because of the guarantee by the FHA, private lenders are willing to extend the loan to the borrowers who have low credit scores. The FHA home loan is perfect for persons with a credit score of 580 and higher, so long as they can raise a 3.5% down payment.

Here is an overview of what the applicants must meet to qualify for the FHA home loan

  • A minimum of 3.5% down payment
  • Have a FICO score of not less than 580
  • A debt-to-income ratio of no more than 50% and proof of steady income or stable employment
  • Cover the upfront mortgage insurance premium
  • Raise money to cover the closing costs (2% to 6% of the purchase price)

The FHA home loan is a good option for the first-time homebuyers meeting the above criteria.

  1. The VA Home Loan

If you are a first-time homebuyer with a military connection, the VA home loan could be the right home buying program for you. Created way back in 1944, the VA home loan was part of the original service members’ readjustment ACT and was signed by then-President of USA Mr. Franklin D. 

The VA home loan is available to servicemen and women or their surviving spouses, who have a valid Certificate of Eligibility and meet the lender’s basic requirements. first-time homebuyers may be eligible for the VA home loan by meeting either of the following qualification requirements:

  • Have served during wartime for a period of three months consecutively
  • Served for a period of more than six months of service during peacetime
  • Served for six years in the national guard or reserves
  • A spouse of the service members who died in the line of duty, or because of a service-related disability

Note that it is not necessarily obtaining the Certificate of Eligibility to apply for the VA home loan.

  1. The USDA Home Loan

The USDA home buying program offers considerable benefits for qualifying applicants wishing to purchase a home in the eligible rural areas. The private lender’s issue the USDA home loan and the United States Department of Agriculture guarantees the home loan.

 The USDA home loan was started to champion the provision of affordable homeownership opportunities. The home mortgage aims at enabling the low to moderate-income households to purchase properties within the specified rural areas. Through this initiative, the home loan aims at stimulating economic growth in the rural and suburban communities in the United States. The USDA qualification requirements include:

  • Proof of US citizenship or permanent residency in the US
  • Have dependable income for two consecutive years
  • Be willing to repay the home mortgage and ensure no late repayments
  • An acceptable debt ratio which varies from one lender to another
  • Property is located in a qualified rural area

The USDA does not impose a credit score minimum. However, USDA lenders require that the borrowers have a credit score of at least 640.to access the USA guaranteed underwriting system.

  1. The Fannie and Freddie Home Buying Programs

If you are planning to buy a house in Arizona, Fannie Mae and Freddie Mac home loan is a good option so long as you can meet the credit score requirements. The Fannie and Freddie Conventional Home Loan are available to the borrowers who can raise a 3% down payment and have a credit score of at least 640. Fannie and Freddie are Government-sponsored enterprises and they establish the guidelines for loans that they are willing to purchase from the conventional lenders on the secondary mortgage market.

The typical qualifications criteria for the Fannie and Freddie conventional mortgage are:

  • A minimum credit score of 620 with 620 permissible under special considerations
  • A debt to income ratio of 36% to 43% for those with desirable credit score
  • Have a housing debt to income ratio of under 35%
  • No recent financial derogatory credit factors
  • Down payment comes from an allowed or documented source

The Fannie and Freddie home buying program is suitable for those looking to purchase a new home as the primary residence, or as an investment property.

Are you thinking of buying a house in Arizona but do not know how to finance the project? The home buying programs we have covered herein could help you purchase a property. Your mortgage professional can help you through analyzing of the mortgages we have covered here.

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