Can I refinance my USDA Loan to take advantage of the current low interest rates?

Secretary Vilsack announces USDA Rural Refinance Pilot Program

“I’m underwater with my USDA loan, and I want to refinance.  Can you help me?”  The homeowner sounded hopeful when she called me this morning, and she had good reason.

In 19 states hardest hit by falling property values, says Department of Agriculture Secretary Vilsack, the answer can be “YES.”

“This pilot program,” said the secretary, “will help homeowners’ to take advantage of historically low interest rates, and by working closely with lenders, we are helping rural homeowners protect one of the most important investments they will ever make.”

Highlights

The program, rolled out on February 1, 2012, is called the Single Family Housing Guaranteed Rural Refinance Pilot Program.  It will run for two years from 2012 until 2014.  Here are some highlights:

• Purpose: homeowners with USDA guaranteed or USDA direct loans can reduce their monthly mortgage payment.
• 19 States qualify (see below for list)
• You must have made an on-time payment each month for the past twelve months.
• No appraisal required.
• No credit report required.
• No property inspection required.
• No cash-out is permitted, but costs associated with these loans may be rolled into the new USDA loans.

Apply to refinance your higher interest USDA loan

Do I live in a state that qualifies for the Rural Refinance Program?

Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Rhode Island, South Carolina and Tennessee residents with loans made or guaranteed by USDA may apply for this program.

Apply Now to refinance your underwater USDA loan or call Mike Jones at (520) 349-9090

We’re pleased to welcome Mike Jones to the USDA Rural Home Loans website!

It’s exciting to find someone with Mike’s background in the USDA loan business.  For more than a decade, Mike was a home-builder in Ocean County, NJ, with 21 full time carpenters on his payroll.  That was back in the 1980s when interest rates reached an all-time high of more than 15% for first mortgages, and 21% for second mortgages.  The problem for buyers back then was affordability.

Mike succeeded by finding financing programs to fit the needs of that era.  As a mortgage lender specializing in USDA home loans, he’s doing the same thing today.

Your problem now is not interest rates ~ they’re at an all-time low.  The problem many buyers encounter right now is qualification.

The past four years have left many of you on the sidelines with respect to home ownership.  The tough job market may have left you with very little in the way of a down-payment, and rental prices are going up, up, up!

A USDA loan may be just the ticket to home ownership for you this year.  Home prices are at their lowest point in 10 years, according to CNN Money.
Here are the benefits:

1. Zero down-payment
2. Generous income limits for 2012
3. Much lower monthly MI than either FHA or Conventional loans
4. You can buy even if you’ve had a Chapter 7 bankruptcy if it has been discharged for 36 months (Arizona) and credit has been re-established.
5. And a Chapter 13 bankruptcy may still be open with good payment history and an exception from USDA

 Apply for a USDA Loan Online Now: Loan Application

As Arizona home prices continue to be more affordable,  USDA Loan Limits for 2012 have been raised in most Arizona counties from earlier USDA Loan Limits.  These 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.  The USDA Loan amount can equal the appraised value (if higher than the sale price) to include closing costs.

Apply for a USDA Loan Online Now: Loan Application

Arizona USDA  Loan Income Limits for 2012:

APACHE COUNTY USDA Loan – St Johns AZ | Eager AZ | Springerville AZ | and all surrounding areas
1 to 4 Person Household – $74,750
5 to 8 Person Household – $98,650

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 – $74,750
5 to 8 Person Household – $98,650

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 – $74,750
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 – $76,100
5 to 8 Person Household – $100,450

GRAHAM COUNTY USDA Loan – Safford AZ  | Pima AZ | Thatcher AZ | and all surrounding areas
1 to 4 Person Household – $74,750
5 to 8 Person Household – $98,650

GREENLEE COUNTY USDA Loan – Clifton AZ | Duncan AZ | and all surrounding areas
1 to 4 Person Household – $74,750
5 to 8 Person Household – $98,650

LA PAZ COUNTY USDA Loan – Parker AZ  | Quartzsite AZ | and all surrounding area
1 to 4 Person Household – $74,750
5 to 8 Person Household – $98,650

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 – $74,750
5 to 8 Person Household – $98,650

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 – $74,750
5 to 8 Person Household – $98,650

Apply for a USDA Loan Online Now: Loan Application

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 – $74,750
5 to 8 Person Household – $98,650

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 – $74,750
5 to 8 Person Household – $98,650

SANTA CRUZ COUNTY USDA Loan – Nogales AZ | Patagonia AZ | and all surrounding areas
1 to 4 Person Household – $74,750
5 to 8 Person Household – $98,650

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 – $74,650
5 to 8 Person Household – $98,650

YUMA COUNTY USDA Loan – San Luis AZ | Somerton AZ | Yuma AZ | Wellton AZ | and all surrounding areas
1 to 4 Person Household – $74,650
5 to 8 Person Household – $98,650

To apply for a Guaranteed USDA Rural Home Loan click on the Get Started on USDA tab above.

USDA Loan: Get It While You Can

Over the last couple of years the USDA Loan has become the hottest deal in town.  Why?  Because it helps low to moderate income families buy a new or existing home with no money down.  And in today’s current real estate market it is helping get buyers in the market who may not have been able to buy without the use of the USDA Loan; and it is helping move real estate in areas like Queen Creek, Sierra Vista, Anthem and Marana that may have sat vacant without the availability of the USDA Loan Program.

While loan programs have been changing over the last several years and tightening guidelines, the USDA Loan still remains the simplest loan to get and it’s biggest restriction has to do with the geographical areas that qualify for this loan.

Qualifying areas are based on the US Census Data by using an area’s population to determine eligibility.  Currently areas in Marana and north of Tangerine Road in Tucson, are still eligible for the USDA Loan Program; however once the USDA restructures it’s eligibility maps based on the 2010 census data, those areas may no longer be eligible.

When they restructure the qualifying areas is unknown, but it does look like the population growth in those areas will make them ineligible for the USDA Loan in the future.  Now when that does happen, the next low down payment would be the FHA loan which currently only requires a 3.5% down payment (and also has a monthly mortgage insurance payment).

So for anyone looking to buy a new or existing home with no down payment and in an area close to an urban area, you may want to take a look at getting pre qualified for a USDA Loan now.

Apply for a USDA Loan Online Now: Loan Application

Areas in and around Tucson most likely to be impacted:

• Marana
• Dove Mountain
• Oro Valley
• Gladden Farms
• Areas north of Tangerine Road

Areas in and around Phoenix most likely to be impacted:

• Queen Creek
• Buckeye
• Goodyear
• Anthem

Changes are also coming to:

• Prescott Valley
• Kingman
• Sierra Vista (with possible “pockets” of eligible areas)
• Casa Grande

I’ll be updating the maps as soon as we get the information verified from the local Rural Development office.  Keep in mind that the changes removing current eligible areas could come at any time, or it could take months.  The reason is because the changes must go through the National Rural Development office before any Arizona Rural Development office can take action.

To find out if you qualify for a USDA Loan call (520) 225-0380 or click on the Apply Now tab above and ask a question if you like.  If you are ready to go ahead and get your application in, you can fill out my online Arizona USDA Loan Application here.

USDA Loan – Areas in NW Tucson and Oro Valley

People are asking me all the time if there are any areas of NW Tucson that qualify for the USDA Loan.  The good news is that any real estate North of Tangerine Road is in a USDA qualifying area.  While there are some high priced homes in this area, you will be amazed at the number of homes that do qualify for the USDA Loan.

This allows people who are looking to buy in this area to be able to take advantage of the low rates offered by the USDA Loan program as well as buy a home with absolutely zero down payment and lower monthly payments than a similar FHA Loan.  One neat plus with the USDA Loan is that we structure them so that you get your Earnest Money Deposit back at closing.

So instead of going to closing and writing a big fat check, we strive to structure the loan so that you get a big fat check when you close.  Be sure to ask me about this when you put in your application.

Other advantages of the USDA Loan include:

• No down payment
• No monthly mortgage insurance like FHA or Conventional loans
• Lower payments than FHA or Conventional
• Low closing costs
• Seller can pay your closing costs
• Fast closing
• Get your Earnest Money Deposit back at closing

Apply for a USDA Loan Online Now: Loan Application

So if you are looking for a home in the following areas:

• Dove Mountain
• Honey Bee Canyon Estates
• Rancho Vistoso
• Chaparral Acres (in Catalina)
• Somerset Canyon
• Butterfly Mountain
• Saguaro Ranch
• Black Horse Ranch (in Catalina)
• Tangerine Crossing
• Heritage Highlands

or any of the other areas North of Tangerine Road in Oro Valley, then you should be able to take advantage of the USDA Loan to buy your next home.

I hope you found this Arizona Home Loan tip useful and please, leave a comment below.

To find out if you qualify for a USDA Loan call (520) 225-0380 or click on the Get Started on USDA tab above and ask a question if you like.  If you are ready to go ahead and get your application in, you can print out my Arizona USDA Loan Application here.

Fannie Mae Is Making Our USDA Loan Program Much Cheaper

I’ve been helping people for years to get the cheapest, easiest loan possible to buy a home in Arizona with the USDA Loan Program.  Now, in a recent article in USA Today it is reported that Fannie Mae and Freddie Mac are raising their loan costs to home buyers.  This will make the USDA Loan Program even cheaper than it is now.  Fannie and Freddie fund home loans that are known as Conventional loans and have been the largest supply of home loans forever.

While the USDA Loan Program has limits on the fees that can be charged, Fannie and Freddie are introducing new fees to be charged to consumers based on your credit score and how much you are putting down.

If you plan to put more than 25% down and have a credit score higher than 720, you won’t notice a difference in the new Fannie and Freddie price hikes.  Everyone else will see a substantial price increase, only if you apply for conventional financing.

The Fannie Mae & Freddie Mac price increases go into effect on April 1, 2011.

Apply for a USDA Loan Online Now: Loan Application

Just to give you an idea, for someone buying a $150,000 home with 5% down and a 620 middle credit score, Fannie Mae will charge that borrower an extra $4,631 at closing once April 1st hits.

With the USDA Loan Program, not only do you keep that 5% down payment in your bank account but you get to keep the extra fee the Fannie Mae would charge you.

Proof once again that the USDA Loan Program is the cheapest loan available to buy a home in Arizona.

We are seeing the use of the USDA Loan Program increase in popularity all over Arizona, especially in Sahuarita, Anthem, Buckeye, Maricopa and Queen Creek.

I hope you found this Arizona Home Loan tip useful and please, leave a comment below.

To find out if you qualify for a USDA Loan call (520) 225-0380 or click on the Get Started on USDA tab above and ask a question if you like.  If you are ready to go ahead and get your application in, you can print out my Arizona USDA Loan Application here.

Here Is How You Find Qualifying Areas For The USDA Loan Program

The USDA Loan Program is restricted to certain geographic areas, and one of the questions I hear a lot is how can I tell what areas are eligible for the USDA Loan, where should I be looking to buy a home?

Let’s take a quick look at what the USDA defines as an eligible area.

The USDA says that to be eligible a property must be in a rural community.  Generally, these are communities of less than 10,000 people, but the USDA does make exceptions.  Certain areas between 10,000 and 25,000 in population are considered rural based on their distance from urban areas.

So it comes down to population and how far away from an urban area you are.

So here is a list of Urban areas that are NOT eligible; Flagstaff, Bullhead City, Lake Havasu City, Prescott, Phoenix, Tucson, Yuma and Sierra Vista.  Now be sure to keep in mind that their suburbs may be A-Okay.

Did you know that Arizona has 15 counties?  And right now 7 of those counties don’t have any eligibility restrictions.  That means that every single geographic part of that county qualifies for the USDA Loan.

Apply for a USDA Loan Online Now: Loan Application

On the USDA Rural Maps tab you can find a constantly updated list of USDA qualifying areas.  Once there you will see specific areas that you can quickly look at and see the eligible areas.

I hope you found this Arizona Home Loan tip useful and would love to hear your comments.

To find out if you qualify for a USDA Loan call (520) 225-0380 or click on the Get Started on USDA tab above and ask a question if you like.  If you want to go ahead and get your application in, you can fill out my Arizona Home Loan Application Online here.

Is It Really Possible To Close A USDA Loan In Just A Matter Of Days?

Our USDA Loans close fast, really fast.  But not everybody closes the USDA Loan so quickly.

Around the real estate and mortgage communities, there is a widespread belief that the USDA Loan has to take longer than any other type of loan.  In fact I have heard rumors that the USDA Loan can take 3 to 4 weeks longer than an FHA Loan to close.

WHAT?  Three to four weeks longer.  Are you kidding?

The reality is that a USDA Loan can close just as fast, if not faster, than an FHA Loan.  We close our USDA Loans fast, really fast when compared to the other lenders I know in our area.  Let’s take a moment and look at what impacts how quickly a USDA Loan can close.

The quickness of the loan process is a combination of several factors:

• The preparedness of the borrower
• The cooperation of the seller
• The ability of the lender to process quickly
• The turn time at the local Rural Development office

Apply for a USDA Loan Online Now: Loan Application

Let’s look at them one item at a time:

The Prepared Borrower

This is the only area that YOU can help speed up the process of getting your USDA Loan funded.  Basically the Prepared Borrower will have gathered all the following and have them ready to provide to the USDA Loan Originator at the time of application.  Providing all the documentation at the beginning will save time during the process and remove processing questions that typically can cause delays.

The items the Prepared Borrower will have available are:

• Legible copy of a photo ID (driver license)
• Copy of the social security card
• 30 continuous days of pay-stubs from work (or any additional applicable proof of income)
• 2 months of ALL asset statements (be sure to include the blank pages also)
• 2 years of Federal Income Tax returns with ALL schedules
• 2 years of W2s
• Signed letter of explanation for any derogatory items showing on the credit report

Having this information gathered and available for your USDA Loan Originator will assure that you are doing your part in speeding up the process.

After you get your application in you will get a disclosure package from your loan originator.  You’ll also want to get the full disclosure set back to your loan originator as soon as possible.

The Cooperative Seller

In the current market, many of the sellers out there are banks.  You might find a great house that is actually owned by Fannie Mae.  Working with a bank as a seller is not generally a bad thing.  I have had many loans close that where the seller was the bank and they have moved by quickly.

But the biggest obstacle with working with a bank as a seller is that many times they just simply require time, and lots of it in order to get the closing documents to the right party to review and sign.  Many times they have 3 or 4 different departments that would need to review and approve the documents.

So, you really need to be working with a lender who can get closing documents to escrow at least a week early.

The Quick Moving Lender

Every lender processes and underwrites loans at a different capacity and there are three turn times that you need to be aware of.

The first turn time is the processing turn time.  That is how long does it take to process a file and get it ready for the underwriter once you have provided all of your documentation.  A good processing system should have a file ready in about 5 days, however there are outside forces which may impact this turn time.  Things such as how long it takes to get the appraisal and the title report can cause a lengthy delay.

The second turn time is the time it takes to underwrite a file for approval.  After processing, most mortgage companies ship their files out to a lender to be underwritten.  Some mortgage companies, like ours, have underwriters in the office and can underwrite a file for approval very quickly, sometimes even the same day.

Underwriting turn times can be anywhere from hours to 30 days.  Be sure to know how long your underwriter will take, mine is usually done within a day or two if there is a heavy workload.

Choosing the right USDA Lender will assure that you are doing everything you can to close your loan on time, or even early.

The Local Rural Development Office

Once your loan is approved, portions of it will be sent to the local Rural Development Office for review and issuance of the Conditional Commitment letter for the USDA Guarantee.  In Arizona, most of the RD Offices will get this portion done in just 2-3 days.  In some parts of the country it can be much longer.

Once RD has issued the Commitment, then you are ready to sign docs and close your USDA Loan.

In Summary

While a streamline USDA Loan processing system like ours can help to get a USDA Loan approved and closed in as little as 15 days, most other lenders are taking 45-60 days.

I hope you found this Arizona Home Loan tip useful and would love to hear your comments.

To find out if you qualify for a USDA Loan call (520) 225-0380 or click on the Get Started on USDA tab above and ask a question if you like.  If you want to go ahead and get your application in, you can fill out my Arizona Home Loan Application Online here.

Do You Make Too Much Money To Qualify For A USDA Loan In Arizona?

While the USDA Loan does not have a maximum loan size they do have a maximum qualifying income limit.

People ask me all the time, what are the income limits for the USDA Loan.  So let’s take a moment and define really quickly what an income limit is.  The USDA defines income limit as the Adjusted Household Annual income, that’s it.

Did you catch that?  There is an important point there that many people naturally overlook, it’s the Household Annual Income.

What that means is that the USDA Loan Program will look at the total income coming into the household over the entire year.  If you have a son or daughter or parent, friend or spouse living in the household that will not be on the loan; their annual income will count against the limit.

What are the income limits based on for USDA Loans?

They are based on geographic region and number of people in the household.  The different groupings are 1-4 people, 5-8 people and any number over 9.

Apply for a USDA Loan Online Now: Loan Application

The majority of Arizona has a USDA Loan Income limit of $74,050 for a 1-4 person household.  For the 5-8 person household the income limit is generally $97,750.  However certain areas allow up to $76,600 for the 1-4 person household and up to $101,100 for the 5-8 person household.

You can find the most current chart of income limits on my USDA Loan Income Limits post.  Just select the category, INCOME QUALIFYING and you’ll get the charts as well as information on allowable deductions.

I hope you found this Arizona Home Loan tip useful and would love to hear your comments.

To find out if you qualify for a USDA Loan call (520) 225-0380 or click on the Get Started on USDA tab above and ask a question if you like.  If you want to go ahead and get your application in, you can fill out my Arizona Home Loan Application Online here.

The USDA Loan and Credit Scores..

People ask me all the time what credit score is needed to get a USDA loan to buy a house in Arizona with absolutely Zero Down Payment.  There are actually a pretty good variety of answers to this question.

Before we open the curtain on the USDA Loan and show you the credit score options, let’s take a look at what a credit score is.

There are three credit bureaus and each has a detailed history of an individual’s credit.  They are Trans Union, Equifax and Experian.  They each have their own super secret, mathematical model that they use to create and formulate a person’s credit score.  It’s basically like your credit history goes into the big credit machine, and out comes a three digit number.

That number is a score that lenders will use to determine your level of risk.  So a lower score means a higher risk and a higher score means a lower risk.

So, you’ll have a score from Trans Union, from Experian and from Equifax.  The score used to qualify for a loan is the middle of the three scores.  So let’s say you have a 648 from Trans Union, a 602 from Experian and a 623 from Equifax then you middle score would be the 623.

Now, the USDA Loan does not have an actual minimum credit score, can you believe that?  But the lenders who fund the USDA loans will generally require a minimum middle credit score of 620 and the USDA does advise that lenders should not approve loans with less than a 580 middle credit score.  Some lenders will go with a lower score, say down to 580 or so, but be prepared to pay significantly more in closing costs with such a low score.

Apply for a USDA Loan Online Now: Loan Application

NOTE:  Our company requires a middle credit score of at least 620 to fund a USDA Loan.

If your credit score is standing in your way from qualifying for a USDA rural home loan, then be sure and get a free copy from annualcreditreport dot com and verify that the information is all correct.  I wrote a post last week on some tips you can use to improve your credit score also.

So in summary, as a general rule if you have a middle credit score of 620 then you will have a very good chance of getting approved for a USDA rural home loan.

I hope you found this Arizona Home Loan tip useful and would love to hear your comments.

To find out if you qualify for a USDA Loan call (520) 225-0380 or click on the Get Started on USDA tab above and ask for a quote.  If you want to go ahead and get your application in, you can fill out my Arizona Home Loan Application Online here.