If you are thinking about buying a home in Yuma county, you may want to look at a USDA loan. This is a zero down financing program designed to promote home ownership in rural areas. With low interest rates, low mortgage insurance, and the ability to finance closing costs in some cases, a USDA loan is an excellent option to consider.
Here are the 5 easy steps to owning a home:
- Complete a loan application with NOVA® Home Loans (you can do that here).
- NOVA® orders your appraisal and discusses any repairs required with you, your agent and the seller.
- NOVA® processes your application and submits to RD for review.
- USDA RD reviews application and issues a conditional commitment (usually within 24-48 hours).
- NOVA® approves and funds the loan!
Things to watch out for:
- Income Limits: Currently, a family of 1-4 people can make up to $75,650 of annual household income and still qualify for a USDA loan. For 5+ person households, the limit goes up to $99,850! Keep in mind that they look at income from all household members who are 18 years old and up, even if they are not listed as borrowers on the loan.
- Eligible Areas: Before you choose a home or a neighborhood, make sure the area is eligible for USDA financing! The eligibility map changes frequently, but you can always check for yourself here. All of Somerton, San Luis and Wellton are eligible. There are also some outlying areas of Yuma that qualify. Remember, this program is for “rural areas.” As of today, the eligibility map for Yuma county looks like this:
- Own other property? If you own any other real estate, you may not be eligible for USDA financing. There are exceptions to this rule, so be sure to talk to us about your specific situation!
- No pools. USDA loans are not designed for luxury home finance. If the house has an in-ground swimming pool, it may not be eligible for USDA financing. There are exceptions to this rule, so don’t give up on it automatically! Be sure to talk to us about it first – we may be able to help you make it work!
- Too much money in the bank: There is a stipulation that says a USDA borrower must “lack sufficient resources to secure conventional credit.” This generally means if you have a bank account (not counting 401k or retirement account) with enough money to put 20% down on the home purchase, you may not qualify for this type of loan.
- Residential primary residence only: This loan is for financing a home you are going to live in. It is not a program for financing farm land, vacation homes or rental properties. You can buy a home on acreage, but the rule is that the house has to be at least 70% of the value of the whole property.