First Time Home Buyer Options

As a first time home buyer, there are a several home loan options in Arizona that you can take advantage of. Below is a small description of the most popular:

FHA – 3.5% Down
The Federal Housing Administration offers home loans with an entry down payment of 3.5% of sales price of home. These loans are fixed rate loans for either 15yr or 30yr terms. These loans do carry
private mortgage insurance (PMI) which is included into the monthly mortgage payment. A 640 fico score is required with no previous foreclosure, bankruptcy, short sale and/or loan modification. 
Conventional - 3% Down
Conventional banks and PMI companies have collaborated a new program which will allow borrowers to purchase a home with just 3% down. After seeing some stability in the Arizona market, this product was brought back to assist the home owner and reward those individuals with excellent credit profiles. This loan product is also offered on 15 or 30yr terms. A 680 fico score is required with no previous foreclosure, bankruptcy, short sale and/or loan modification. Lender paid PMI is available so that the borrower does not have to pay monthly mortgage insurance. This is very enticing when compared to an FHA loan.
Conventional - 5% Down
Conventional banks have also opened the portal to borrowers who do not have an excellent credit profile. If you have a 620 fico score with no recent foreclosure, bankruptcy, short sale and/or loan modification you may qualify for the 95% LTV home loan program.  The loan carries more risk with a less than perfect credit rating so a 5% down payment is required. Lender paid MI is also available on this product so that monthly payments are still favorable and affordable for the home owner.
USDA Rural Home Loan– 100% Financing
USDA Rural Home Loan is designed to help families in areas that are designated as rural to get into a home with zero money down!  Typically this is for cities located outside the Phoenix-Metropolitan area. Cities for consideration are as follows: Buckeye, Waddell, Litchfield Park, Surprise, Wittman, Anthem, Carefree, Gold Canyon, Queen Creek and Maricopa. In order to be eligible for many USDA loans, household income must meet certain guidelines. Also, the home to be purchased or served must be located in an eligible rural area as defined by USDA. To check eligibility,
click here.
VA – 100% Financing
VA financing is offered to active or ex-military personnel. The VA Loan is one of the best mortgages available today. Compared to conventional or FHA loans, it is one of the best loan products available. Not only is the VA Loan one of the last $0 down options out there, it also doesn't charge the costly and unnecessary private mortgage insurance (PMI) that other loans make you pay if you don't put 20 percent down. Combine those factors with great low rates and flexible qualification standards, and you have one amazing benefit.


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